The plan was to choose the winning bid back in 2013 and to start construction in 2017. The reactors could have been up and running already in 2025. However, the dates of summing up the tender were shifted several times and now CEZ all in all has decided to freeze the project. All bidders were notified on the decision: the consortium MIR.1200 (Engineering Company of ROSATOM Atomstroyexport, Experimental Design Bureau Gidropress and SKODA JS), Westinghouse Electric Co., as well as Areva NP, which had been crossed off earlier.
CEZ noted that in 2009, when the bids had been invited, the project was economically justified. “However, today recovery of investments is fully dependent on the market prices. It doesn’t mean that we stop the new reactor building program. The risk of us being unable to meet our energy needs during 20 years pertains. At the same time, the plans have to be adjusted considering the alterations, which are being prepared in Brussels. It is necessary to work closely with the state to ensure the nuclear industry development,” CEZ CEO Daniel Benes noted.
CEZ also said Prague was to draft a nuclear power development plan before the end of the year and so far it couldn’t give guarantees for construction of the plant featuring low CO2 atmospheric emissions.
ROSATOM commented: We respect the actions of the customer, the company CEZ. We understand that today’s structure of the Temelin NPP construction project assumes that CEZ has the governmental guarantees of buy-out prices of future electricity, and that in the absence of such guarantees it is difficult for the Czech customer to enter the project implementation stage. On our part, we state that after CEZ and the Czech Government approve the integrated nuclear industry development plan of the Czech Republic, we will be glad to take part in its implementation.”
Leos Tomicek, Executive Vice-President of Rusatom Overseas (the company promotes ROSATOM’s services abroad), thinks this event wasn’t a surprise for anybody. He says long-term outlooks of the economic development and electricity price growth in the Central Europe have changed and the plant customer – the largest Czech utility CEZ – asked for guarantees from the government to maintain the electricity price at a level that is not below the plant’s profitability, as a Contract for Difference. The Czech Government turned it down for obvious reasons, and that was the grounds for cancellation of the tender. But this was just a formal reason, the expert believes.
“In fact, there is a paradox in the Czech energy sector, Leos Tomicek notes. “On the one hand, the country needs to commission new power capacities (the critical date of reactors commissioning is 2030), the government and the public support nuclear power development, but nobody wants to assume certain risks associated with this project. It is problematic for CEZ as well, since this state-controlled company is about 30% owned by private shareholders who, under the Czech legislation, can contest any business decision, which they believe contradicts their interests. To find a way out, the tender had to be cancelled first and the process was started to find such a project implementation format, which would be acceptable for investors and the customer.”
The Rusatom Overseas executive is certain that the cancellation of the tender in no way means that the Czech abandon the new nuclear build project. The evidence is the statements made by top public officials; moreover, there is no escape from the real needs of economy and EC requirements to shut down coal-fired plants. “In this regard it is important to stress that in the course of the tender ROSATOM’s companies together with the Czech SKODA JS prepared and worked out in fair detail the offer, which fully meets CEZ’s expectations. This offer will be supplemented by new attractive options, which will ensure its unconditional competitiveness,” Leos Tomicek said.
