Imported electricity for 2 CZK per kWh, or 3 CZK from the domestic core? So far, the government’s “fair” offer has the support of the population and the mainstream media

At what price we will get electricity from the new nuclear sources that the government is planning, no one has yet officially told us. The list of reports predicts, according to information from various sources, that it will be expensive and that the fee of 0.6 CZK per kWh for the support of renewable sources, which we pay for the solar boom around 2010 and should end around 2030, will probably be replaced by a fee for new nuclear resources.

We also assume that the total costs of one reactor, including financial costs, will be high, approximately CZK 700 billion, and the cost price of electricity CZK 2.94 per kWh. The calculation is based on the lifetime of the power plant without further significant investments of 35 years and zero profit for the operator. If the life of the power plant without significant new investments is 40 years and the operator’s profit is not very significant, the price could be CZK 3 per kWh. You can try your own estimates on our nuclear electricity price calculator.

Prime Minister Fiala already said the following about electricity prices at the Nuclear Forum on 11/11/2022: “The International Energy Agency concluded that the total production costs of electricity in the case of nuclear sources are completely comparable to the costs of renewable sources, especially after taking into account all system costs .Even these arguments ultimately led to the political confirmation that nuclear energy can contribute to the current goals of the European Union, including the goal of decarbonizing our economies.” Translated into common language: Already in 2022, we had to put in a lot of effort to make electricity from nuclear sources competitive with electricity from renewable sources.

Colleagues from Deník N this week drew attention to a study by two Nuremberg universities, which primarily focused on the hope that the development of renewable sources will lead to lower electricity prices in the future. However, they came to the conclusion that the price of electricity will not decrease in 2040, that although the production price of electricity from the wind will drop to 1.2 CZK per kWh and the price from the sun to 0.65 CZK, there is a need to back up the production of electricity by combining natural gas, of battery storage and hydrogen storage will lead to the final price for stable supply (i.e. supply comparable to a nuclear power plant) to 76.30 Euros per MWh, i.e. 1.9 CZK per kWh. And all this at the presented extreme price of emission allowance paid for backup with natural gas in the amount of 225 Euros per ton of CO2.

And here we should be smarter for two reasons. The first is whether the ideological displacement of natural gas from the market by means of extreme allowance prices is even at least minimally rational. Yes, natural gas also produces CO2, it is itself a greenhouse gas when it escapes into the atmosphere during extraction, but its combustion is otherwise harmless to the environment. If we were to limit the price of emission allowances to, for example, 120 Euros per ton of CO2 (the historical maximum from March 2023 is 105 Euros), this would have a favorable impact on electricity prices and the development of renewable sources. ČEPS head Martin Durčák told Hospodářské noviny on April 23, 2024: “Gas will be with us here for a long time. We will need it to balance the daily balance of the production of renewable resources, possibly for night hours and winter.” If our representatives in the EU should focus on the rationalization of the Green Deal, we have a tip for them: Do not try to administratively end the use of natural gas and cap the price of emission allowances.

The second reason why we should speed up the stable supply of electricity in 2040 at a price of CZK 1.9 per kWh is precisely the comparison with the expected price from new nuclear sources. Do we really want to produce electricity at a price 50% higher than what we would import it for? Are we not undermining the competitiveness of our industry? Shouldn’t we focus more on the transmission and storage of electricity? Professor Václav Smil said on 5/21/2023 for Seznam práva: “Siemens published an internal report sometime in 2008, which later became public. In it, they calculated that if German solar capacity were built in Italy and connected to Germany by high-voltage lines , a lot would be saved.” Do you think that our politicians are negotiating with Croatia and Ukraine about the construction of solar panels on their territory and with Poland about the joint use of wind in the Baltic Sea? Maybe yes, they just didn’t tell us about it.

Another aspect is the long-term investment in nuclear energy. In order to even think about its basic return, we need 15 years of construction and 35 years of operation. However, in addition to administrative restrictions, technological shifts can completely degrade the economic return in at least two directions. The first of these is the storage of electrical energy, which is rapidly developing due to electric mobility and whose decreasing price may make nuclear energy completely uncompetitive. If in the future we obtain 1 kWh from the sun for 0.65 CZK and store it for, for example, 0.35 CZK, then we will face enormous costs for the liquidation of nuclear power plants, which will not be used to pay. Only then will we perhaps understand why those “stupid” Germans do it. And the second direction is the technological shift in obtaining the electrical energy itself. Currently, there is probably nothing relevant on the table, but the risk that something will appear in the course of 40 years is great.

Due to the described risks, the justification in the words of the political scientist “the total production costs of electricity in the case of nuclear sources are completely comparable to the costs of renewable sources” is not enough. It is necessary to calculate the risks and if the price is comparable and the risks are noticeably higher, then the investment should not be made.