Tuesday, August 16, 2022

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EU opens investigation into Czech support for the new nuclear power plant in Dukovany

The European Commission has opened an in-depth investigation to assess whether the public support that Czechia plans to grant for the construction of a new nuclear power plant in Dukovany is in line with EU State aid rules.

The beneficiary of the measure would be the Elektrárna Dukovany II (EDU II), a company set up to carry out the project, which is fully owned by the ČEZ Group.

The new plant, with an electricity generation capacity of up to 1200 megawatts (MW), is scheduled to start operating in 2036 and it aims at increasing the security of electricity supply for Czechia and for neighbouring countries, helping the decarbonisation of the energy sector and diversifying the Czech energy mix.

The country plans to support the construction of the new nuclear power plant through three measures: first, a low-interest repayable State loan expected to cover 100 per cent of the construction costs (approximately 7.5 billion euros); second, a power purchase agreement between EDU II and a State-owned company for the lifetime of the project (60 years); and finally, a mechanism to protect the ČEZ Group and the State in case certain unforeseen events occur.

At this stage, the Commission has found the project necessary and considers that the aid facilitates the development of the economic activity. Nevertheless, there are doubts on whether the measure is fully in line with EU State aid rules.

Czech Deputy Minister at the Ministry of Industry and Trade Tomas Ehler welcomed the Commission’s decision as a necessary step which has already been taken for any other nuclear projects in the European Union.

In particular, the Commission has some doubts about the appropriateness and proportionality of the three components of the measure. It also must be ensured that the impact of the measures on competition in the market is kept to a minimum. And, the EU wants to verify if there is any other potential company that could take part in the project other than ČEZ.

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