Sunday, September 27, 2020
Home Electricity Czech state offers to cover 70% of the new Dukovany unit cost

Czech state offers to cover 70% of the new Dukovany unit cost

Prime Minister Andrej Babiš confirmed that the Czech government will provide a loan to utility company ČEZ to cover 70 per cent of the cost of building a new unit at the Dukovany nuclear power plant, with the majority state-owned power company financing the remaining 30 per cent. Mr Babiš reiterated the government’s commitment to guarantee energy independence and cheap electricity for the country.

At the end of March ČEZ has filed its application to the State Office for Nuclear Safety to construct two new reactors at its Dukovany nuclear power plant each with a generating capacity of up to 1200 megawatts (MW).

Financing scheme has been a crucial element of the project and the government wanted to clarify the terms by the end of May before going into talks with the European Commission. At the end of last week, the government confirmed its readiness to provide substantial financial assistance for the project that is estimated to cost a total of six billion euros.

The government argues that the direct intervention of the state is necessary in order to keep the production price of electricity from the planned new Dukovany unit at a level at which consumers would not pay unnecessary additional costs.

“Our interest is to ensure the lowest prices of electricity for the citizens, for industry, for everyone. We have more or less agreed that the state will provide a loan for ČEZ on favourable terms, both for the state and for ČEZ and the electricity price is based on the financing costs,” stated Prime Minister Babiš.

Deputy Prime Minister and Minister of Industry and Transport Karel Havlíček said that two of three agreements between the government and ČEZ on the framework and implementation of building the new unit will be signed by the end of June.

“A new nuclear power source is necessary to ensure the energy self-sufficiency of the Czech Republic and to ensure a stable and affordable source of electricity,” he added.

The Czech government gave preliminary approval for Elektrárna Dukovany II, a subsidiary of ČEZ, to build at least one new nuclear power unit last summer. ČEZ Chief Executive Daniel Benes confirmed that on 1 June Elektrárna Dukovany II has become fully operational in accordance with the agreement with the government.

A tender for the selection of the reactor vendor for a turnkey contract will be announced by the end of this year, with the winner selected by the end of 2022. The companies interested in building new nuclear units are China General Nuclear, EDF of France, Korea Hydro & Nuclear Power, Russian nuclear giant Rosatom and the US Westinghouse.

The Czech Republic generates more than a third of its electricity from nuclear energy and the government has advocated nuclear power as a low-carbon alternative to coal, which now produces about one-third of the country’s electricity.

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