Surprise in the Czech Republic: Prague wants to order four new nuclear reactors

NLast Monday, Bijan Sabet had every reason to rejoice when the American ambassador in Prague signed a contract for the purchase of 24 American F-35 fighter jets at a price equivalent to 6.3 billion euros. But just a few days later, enthusiasm gave way to disappointment: the Czech government removed the American company Westinghouse from the race to build new nuclear power plants in the Czech Republic.

This is all the more irritating to the Americans because Prime Minister Petr Fiala at the same time announced that he might now build four new reactor units instead of one – a deal that is likely to eclipse the fighter aircraft deal.

Power plant maker Westinghouse, which is very active in Poland, Ukraine, Bulgaria and Slovenia with support from the US government, is dropping out of the Czech race with its AP1000 model because it only submitted a non-binding proposal, Economy Minister Josef Sikela said.

Race between France and South Korea

However, the government insists on firm commitments rather than non-binding information. Westinghouse’s competitors from Russia, Rosatom and the Beijing state-owned China General Nuclear Corporation were not even allowed to participate in the tender for security reasons.

Only the French Electricité de France (EDF) and the Korean Hydro Nuclear Power Plant (KHNP) remain. Both now have until April 15 to submit binding proposals. The government then wants to assess this and make a decision on the order before the end of the year.

The first new nuclear power plant is planned to be commissioned at the Dukovany site in 2036. Today, about 40 percent of the electricity generated in the Czech Republic comes from four Soviet-built nuclear reactors in Dukovany and Temelin, and 36 percent of the electricity is generated in lignite-fired power plants. Since lignite-fired power generation is due to cease in the mid-1930s for climatic reasons, a replacement is needed. It must come from environmentally friendly nuclear power plants.

Broad support for nuclear power

Unlike its neighbors in Germany and Austria, in the Czech Republic this is undeniable. All major parties support the expansion of nuclear power and know that the majority of voters back them. The Czech Republic is one of the EU and international countries that is committed to expanding nuclear power. Prime Minister Fiala wants to make the country a nuclear technology hub. Without nuclear power, it is impossible to achieve CO2 emissions by 2050.2-build a neutral economy.

As expected, the HNP and EDF expressed satisfaction with the vote, including the extension of the tender. “This decision shows that the Czech authorities are aware of the industrial and economic benefits of the naval approach,” an EDF spokesman said. Previously, Fiala made it clear that for larger orders, you can expect a price reduction of up to a quarter. “We have therefore decided to invite bidders to submit binding bids for the supply of up to four nuclear reactors,” he said.

Overall not a smooth design

How much it will ultimately cost to build the reactors remains unclear. Representatives of the state company ČEZ, which will be responsible for construction and expansion, spoke of 160 billion crowns (6.5 billion euros) for the reactor. However, this was calculated based on 2020 prices.

The explosion in costs of EDF’s new construction project Hinkley Point C in the south of England recently showed how wrong price estimates and construction forecasts can be. Not only will it be completed several years later, but it will also be a third more expensive than previously estimated. Delays of several years are now the rule rather than the exception in nuclear power plant construction.

We are talking about a state company

Even if the expansion of nuclear power in the Czech Republic is certain, the parties are still arguing over how to achieve it. At the center is the listed energy company ČEZ, 70 percent of which is owned by the state. ČEZ must not only build gas power plants and wind farms, but also organize and supervise the construction of new nuclear power plants, and the government provides their financing. This may lead to the need for changes in legislation and ownership.

Since last year’s energy price crisis, which saw the company’s exorbitant profits, there has been debate over whether the government should take full control of the company and buy out independent shareholders. Interior Minister Vit Rakušan himself publicly addressed this demand, put forward by former Prime Minister Andrej Babiš’s opposition ANO party just a few days ago – and thus not only increased pressure on the ČEZ share price, but also received opposition from Fiala. .

The Prague government is aware of the best options for intervening in an infrastructure company that is wholly owned by the state and is important for supplies. On the other hand, they also value the influence of private investors in taming politics, not least given the high poll ratings of Babis’ populist, right-wing nationalist party ANO.

Source: Frantfurter Allgemeine

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