SLOVAKIA GAS CRISIS UPDATE, JANUARY 15

UNCLAS BRATISLAVA 000031

SENSITIVE
SIPDIS

STATE FOR EUR/CE K. ERTAS AND L. LOCHMAN
STATE FOR EUR/RA E. MCCONAHA

E.O. 12958: N/A
TAGS: ENRG ECON EINV PREL LO
SUBJECT: SLOVAKIA GAS CRISIS UPDATE, JANUARY 15

REF: A. BRATISLAVA 0008

B. BRATISLAVA 0013

SUMMARY


1. (SBU) The Slovak government has quickly backed away from
last week's announcement that it plans to re-start the
recently closed nuclear reactor at Jaslovske Bohunice.
Experts have told us there is virtually no need to restart
the plant because of the gas crisis. Gas reserves are
reportedly adequate to last until the end of January.
Yesterday's agreement to get 20 mcm/d of Ukrainian gas may be
technically difficult because of the current configuration of
the Ukrainian system to move reserves eastward from storage
facilities near the western border. End summary.

BACK FROM THE NUCLEAR BRINK


2. (U) With the Russian gas cutoff now in its second week,
the Fico government has backed away from its previous
declarations that it would reconnect the V1 nuclear power
plant at Jaslovske Bohunice, which it closed at the end of
December in accordance with its EU accession agreement. Both
PM Robert Fico and his economy minister, Lubomir Jahnatek,
have now positioned the Bohunice restart as a vague
contingency in case the electrical grid is threatened by the
gas crisis.


3. (SBU) Apart from the sharp criticism last week's
announcement drew in Brussels and Vienna, independent experts
here have questioned the need for more electrical capacity
during the gas crisis. One of the GoS's leading energy
experts recently told us that the electrical system here uses
gas for perhaps 10-12 percent of the total power generation
at peak demand, mainly to stabilize the grid as loads vary.
This stabilization could be accomplished with coal-fired
power plants. With large industrial users offline, normal
peaks have flattened out and the overall load is low, so the
stability of the system is quite high and should remain so.
Adding to the argument against restarting Bohunice V1 is the
limited availability of nuclear fuel: Slovakia reportedly has
about 50 days of supply on hand. Several experts have
speculated that the main reasons to consider starting the
plant were that it shows the government taking decisive
action (albeit irrelevant),and that the GoS could use the
revenue for its already stretched budget.

RESERVES TO END OF JANUARY


4. (U) At the same time, the gas reserve situation has become
somewhat clearer, though there is still a disparity between
government statements and those of the gas utility.
According to distribution monopoly SPP (which also runs the
transit business through Slovakia),the country has reserves
to last until roughly the end of January. GoS statements
have put reserves at anything from 8 to 12 days at the
current emergency rate. Earlier reports that the country's 2
bcm reserves would last 70 days (ref A) turn out to be based
on the assumption that there are imports to pressurize the
system. Without that pressure, the system cannot move most
of the reserves through the system.

UKRAINE, RUSSIA AGREE TO SWAP


5. (SBU) Fico's January 14 trip to Kyiv and Moscow landed an
in-principle agreement for Ukraine to move 20 mcm/d to
Slovakia from its western reserves, which would then be
replenished from Russia. Slovakia's normal daily consumption
in cold weather is roughly 30 mcm/d, so this swap could
theoretically allow industrial users to reopen (since a
pressurized system would allow greater use of reserves).
Experts have told us, however, that the arrangement would be
technically difficult, since the Ukrainian system is now
configured to move reserves from west to east. Reconfiguring
the flow to accept a relatively small volume from Russia
could entail cutting off some domestic markets, which seems
politically unlikely.

OBSITNIK