The Czech government’s ambitious initiative to construct new nuclear blocks has stirred significant debate, with experts projecting astronomical costs reaching several trillion koruna, even with potential discounts. Surprisingly, the government has invited participants to submit binding bids for four blocks instead of one at the Dukovany nuclear power plant, escalating competition in the bidding process.

Notably, the government has excluded North American company Westinghouse from consideration, as it failed to submit a binding offer for the Dukovany block. Consequently, the construction of the new reactors hinges on bids from either French firm EDF or South Korean company KHNP. While both companies offered a quarter discount in non-binding offers for multiple blocks, analysts caution that the final bill is expected to be staggering.

According to Capitalinked analyst Radim Dohnal, the construction of four new blocks could potentially add an additional two trillion koruna to the state debt, which currently stands at 3.2 trillion koruna. Dohnal estimates the cost of one block to be at least 400 billion koruna, with expectations of further escalation in prices.

Michal Šnobr, a minority shareholder in ČEZ, anticipates even higher costs, drawing parallels with the construction of EDF blocks in Hinkley Point, UK. The project has seen significant cost overruns, with the current price increase expected to exceed 1.34 trillion koruna per block. Consequently, Šnobr estimates that one block in the Czech Republic could surpass 670 billion koruna, doubling the original 2015 estimate.

Data economist Petr Barton from Datarun echoes these concerns, projecting domestic costs of around two trillion koruna for four nuclear blocks. Barton highlights the escalating costs of the French block in England, emphasizing that even with potential cost savings in labor and materials, the construction of four blocks in the Czech Republic would entail substantial financial commitments.

As the government proceeds with its nuclear expansion plan, the looming specter of significant financial outlays underscores the need for careful deliberation and transparent decision-making to ensure fiscal prudence and long-term sustainability in energy infrastructure investments.

Article by Prague Forum