The Czech government’s recent decision to modify the nuclear tender, potentially constructing up to four blocks, has stirred unexpected reactions, according to Jiří Gavor, an analyst at the Energy and Nuclear Agency (ENA). This move suggests a shift towards at least partial nationalization of the nuclear segment of ČEZ, the largest utility in Central and Eastern Europe.

The exclusion of Westinghouse from the bidding process, leaving only two remaining competitors, came as a surprise. While Westinghouse already operates a block of the required power, Gavor remains optimistic, believing that EDF and KHNP, the remaining contenders, won’t inflate their price offers following this development.

The plan to initially build two blocks in Dukovany raises eyebrows, especially considering the lack of a definitive decision on decommissioning the existing four blocks. Gavor notes the global trend of extending the lifespan of nuclear power plants, suggesting that their operational duration could potentially surpass fifty years.

Despite government assertions of securing discounts, Gavor predicts that the total cost of constructing the four blocks could exceed one trillion crowns. The pricing model being conditional, any costs exceeding this threshold would burden the suppliers.

Gavor speculates that the government’s move may aim to fully nationalize the nuclear segment of ČEZ, a significant investment that would surpass the company’s market capitalization multiple times over. However, such a move could face hurdles due to the current ownership structure, where the state holds less than 30 percent of the shares.

The ongoing dispute between Westinghouse and KHNP over intellectual property rights poses a potential risk to the tender. While no withdrawal of objections from Westinghouse has been reported, the situation remains fluid. Gavor suggests that France, with its solid voice in the European Union and familiarity with European regulations, could be favored due to its expertise in constructing nuclear facilities.

As the Czech government navigates the complexities of the nuclear tender, uncertainties linger regarding the future direction of the project and its implications for ČEZ and the country’s energy landscape.

Article by Prague Forum