US embassy cable - 05YEREVAN1353

C O N F I D E N T I A L SECTION 01 OF 02 YEREVAN 001353 
 
SIPDIS 
 
DEPT FOR EUR/CACEN, EUR/ACE FOR TOM ADAMS 
PLEASE PASS USAID EGAT FOR WALTER HALL 
DOE FOR CHARLES WASHINGTON 
 
E.O. 12958: DECL: 07/20/2015 
TAGS: ENRG, EAID, AM 
SUBJECT: TIME FOR PRAGMATISM:  ARMENIA PLANS TO KEEP 
NUCLEAR PLANT OPERATING 
 
REF: A) YEREVAN 1039 B) YEREVAN 1096 
 
Classified By: CDA A.F. Godfrey for reason 1.4 (b/d). 
 
------- 
SUMMARY 
------- 
 
1. (C) Despite U.S. and European pressure on Armenia to close 
the Armenia Nuclear Power Plant (ANPP), the Government of 
Armenia does not believe it has an alternative to continuing 
the plant's operation until 2016 and beyond (reftels). 
Armenia also believes that, thanks to the assistance of 
foreign donors (first and foremost the U.S. Department of 
Energy), the ANPP is now "acceptably safe."  U.S. experts 
generally agree with both of the above conclusions, but 
caveat them with the warning that the design of ANPP will 
never fully meet Western standards for safety.  The GOAM has 
decided to continue to operate ANPP. 
2.  (C) Because of our policy to urge the GOAM to close ANPP, 
Department of Energy (DOE) assistance programs have not 
focused on safety and security upgrades for the medium- and 
long-term, but have instead favored short-term fixes.  DOE 
experts and the ANPP managers believe that the essential and 
feasible short-term upgrades are now complete and agree that 
the most pressing safety upgrade is construction of a 
full-scale simulator.  Given the GOAM's plan to keep the 
plant open at least until 2016, we believe that our 
resistance to use assistance funds for longer-term safety 
upgrades of the ANPP should be revisited and that DOE should 
be permitted to consider funding the full-scale simulator. 
End Summary. 
 
--------------------------------------------- - 
POLITICAL PRESSURE ALONE WON'T CLOSE THE PLANT 
--------------------------------------------- - 
 
3. (C) We and the European Commission (EC) have long said 
that the ANPP should close as soon as practically possible. 
Nevertheless, since missing the EC's decommissioning deadline 
in 2004, Armenia has been consistent in its position that it 
will not set a decommissioning date until it has guaranteed 
diversity in its electricity supply and reasonable end-user 
electricity tariffs.  In exchange for closing the ANPP early, 
the European Commission had offered the GOAM Euro 100 million 
in assistance, far too little for the GOAM to change its 
position (ref B).  The money that Armenia needs to establish 
diverse supply, to cover the higher of costs of non-nuclear 
generation, to replace its aging thermal power plants, and to 
pay for the decommissioning of the ANPP are daunting even if 
Armenia puts off decommissioning by another fifteen years. 
American energy experts say, and we agree, that there is no 
economically viable alternative to operating ANPP at least 
until its planned life expires in 2016. 
 
--------------------------------- 
PLANT LIKELY TO OPERATE LONG-TERM 
--------------------------------- 
 
4. (C) Nuclear experts from the U.S. Department of Energy who 
work with the plant have told us that there is no physical 
reason that the GOAM could not operate the plant until 2025, 
assuming the Ministry could pressure the Armenia Nuclear 
Regulatory Agency into granting an extended license.  Plant 
Manager Gagik Markosyan told us that he has looked into 
different extension packages and that the GOAM is seriously 
considering prolonging the plant's operational life beyond 
2016. 
 
------------------------------------- 
LEVEL OF SAFETY IS ACCEPTABLE TO GOAM 
------------------------------------- 
 
5. (C) GOAM and DOE experts agree that the plant cannot be 
brought to a level of safety required of modern plants in the 
U.S. and Europe.  Specifically, the plant lacks a containment 
dome around the reactor, and has few tools to mitigate the 
spread of radioactivity in case of a disaster.  Nevertheless, 
the GOAM and DOE experts also agree that besides the lack of 
mitigation, the plant is in good shape and the chance of a 
catastrophic disaster is acceptably low.  DOE project 
managers tell us that the plant is much safer now than it was 
ten years ago (thanks to nearly USD 80 million in foreign 
assistance, including USD 43 million from the USG), but that 
continued operation will require more investment in safety, 
especially in training for a new, second generation of 
personnel.  The biggest threat to the safety of the plant is 
now not the equipment, they say, but human error. 
 
--------------------------------------------- ---- 
DOE ASSISTANCE IS CURRENTLY FOCUSED ON SHORT-TERM 
--------------------------------------------- ---- 
6. (C) During a July 20 tour of the plant with a project 
manager from the U.S. Department of Energy, ANPP director 
told us that the USG assistance to the nuclear plant is not 
focused on those upgrades that would most enhance the safety 
of the plant.  In a May 2005 visit, Richard Reister, manager 
of the International Nuclear Safety Program at the DOE, 
agreed, saying that important long-term upgrades had not been 
made due to USG policy based on the assumption that the plant 
would close in 2004.  Rather than build a full control room 
simulator to train personnel in dealing with incidents and 
avoiding disasters, DOE supplied a software-based computer 
version.  Even though the full control room simulator fits 
within ongoing DOE budgets, it was hard to justify when we 
believed that that plant would close in 2004 or soon 
thereafter.  Given that the plant will operate at least in 
the mid-term, plant managers and the DOE project managers 
agree that a full control room simulator is the best possible 
investment in the future safety of the ANPP. 
 
--------------------------------------------- - 
COMMENT:  CHANGE ASSISTANCE, NOT STATED POLICY 
--------------------------------------------- - 
 
7. (C) We believe that our previous opposition to mid- and 
long-term upgrades for the ANPP should be revisited.  We 
cannot ignore the fact that the plant is going to operate at 
least in the mid-term, and that Armenia has few viable 
options to replace the plant.  We should not change our 
stated position on the plant's operation: the ANPP should 
close as soon as practically possible, but the USG should 
continue to assist the plant to operate as safely as possible 
while it remains open.  Within this stated position, we 
believe that the DOE should be authorized to provide the 
assistance that will most enhance the safety and security of 
the plant during its likely operational life, rather than its 
ideal operational life.  Specifically, we do not believe that 
our opposition to the plant's continued operation should stop 
the DOE providing what it believes to be the most important 
safety upgrade in favor of second-best assistance. 
GODFREY