The Czech government is mulling three options for financing the new nuclear power reactors it plans and will release its updated strategy on the sector by the end of the month, Industry Minister Jan Mladek said in comments published on January 12.
Mladek's ministry will present the new long-term strategy by the end of January, Mladek told E15, in which it will outline a plan to build one new reactor at each of the country’s two nuclear plants - Temelin and Dukovany.
CEZ, the state-controlled operator of the two plants, cancelled a €11bn tender for the construction of two reactors at Temelin in April, after the government refused to provide guarantees on the purchase price of power generated by the new units. However, it became clear almost immediately that a new push to expand the country's nuclear capacity was on the way.
The EU approved the state-backed financing model for the UK's first new nuclear power plant in a generation at Hinkley Point on October 8. That led governments across Central and Eastern Europe to accelerate plans for their own new-build projects.
The Czech Republic's two nuclear plants currently run a total of six reactors that generate a third of the country’s electricity. That share is to increase to at least 50% in the future, according to government targets.
The plan has raised the ire of neighbouring Germany and Austria, but Mladek claims the strategy is part of a bid to increase energy security - a hot topic in Europe right now because of the stand-off with Russia. It has also stirred tough debate inside the coalition government, the minister admits, which has delayed the strategy, which was meant to be released in December. A push to lift longstanding coal mining limits has also helped lengthen the process.
"If we do nothing and defer the problem, whether coal or nuclear, we may find that due to a sudden lack of resources we'll have to settle for generating electricity from gas," Mladek tells the newspaper. "This is not an option, because that would make us dependent on raw materials which we may or may not get, and whose price may vary significantly over time."
Mladek says the provision of some sort of government guarantee is one of the three options being considered for the new Czech capacity. A second is for CEZ to go ahead on its own, he claims, although given the fate of the previous Temelin tender under such conditions, and CEZ's announcement that it is looking to re-enter the M&A market, that looks unlikely.
The third avenue being mulled is a joint venture with the eventual supplier hired to build the units. Five companies have so far expressed interest in bidding: Korea Electric Power Corp, an unnamed Chinese state company, France’s Areva, Japanese-US Westinghouse and a consortium headed by Russian state nuclear agency Rosatom.
The latter three were finalists in the cancelled tender. Rosatom made an early offer in that competition to fund the full cost, become a partner, or even buy into CEZ. Hungary scrapped an international tender on the expansion of the Paks plant in January 2014, handing over the contract in return for a €10bn loan from Moscow.
Westinghouse made no offer of financing in the last tender, while before it was kicked out of the competition in 2012, Areva categorically stated to bne Intellinews that it would not put any money on the table. The Japanese/US corporation has now changed its tune, and said in mid-October that it is ready to use a similar financing model to that it is employing in Bulgaria and the UK to help fund the Czech project.
Although China is not known to have made any specific suggestions to Prague, it continues to push to put its massive reserves to work in the EU. Beijing said late last year that it will create a new investment fund of $3bn (€2.4bn) targeting central and eastern Europe. At the same time, several previous such committments have been made, with little actual follow through.
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