The lowest price wins the nuclear tender. The share of Czech companies cannot be quantified

“I do not hide that the decisive price for us will be the price per megawatt hour that comes out of the offer. It will be one of the basic parameters for determining the price for the purchase contract and the mutual equalization mechanism, the so-called contract for difference,” said Minister Síkela in an interview with e15 and Hospodářské noviny during his visit to the USA.

However, according to Síkela, the closely monitored participation of Czech suppliers in the construction of new nuclear units will not be part of the contract with the tender winner. “However, much will be evident from the contract. There will be implementation documentation and so on. We will insist on what we said: we want the widest possible application of Czech industry in the entire supply-customer chain,” emphasized the Minister of Industry and Trade.

ČEZ will begin evaluating the bids submitted by the Korean KHNP and the French EdF. In the electronically sent materials, both companies presented their proposals for the construction of up to four reactors, two in Dukovany and the other two in Temelín.

“Now we will evaluate the bids and, according to the contract with the state, we will submit an evaluation report to the Ministry of Industry and Trade, and thus to the government of the Czech Republic for final approval,” explained Tomáš Pleskač, a member of the board of directors and director of the New Energy Division of ČEZ. The government will receive the report in June, and a decision is expected in July. ČEZ expects that the contracts with the winner will be finalized during this year and ready for signing by the end of March next year.

The contract will be concluded by Elektrárna Dukovany II, a wholly owned subsidiary of ČEZ. On the one hand, the government will provide the operator with financing for the duration of the construction and also take over the risks that may arise on the part of the state. This is, for example, a delay due to missing permits or non-delivered infrastructure around the construction.

“It is also an electricity purchase agreement, where we undertake to buy electricity for a period of forty years at a set price, with the understanding that if the price on the market is lower than the set price, the state will match it,” states Síkel’s other government role and clarifies: “It has different mechanisms for this, for example price adjustment or a one-time subsidy. If the price is higher, based on the equalization agreement, the state will receive money from the operator of the nuclear source. He can then use these funds, for example, to reduce the regulated component of the electricity price.” For the construction, the government expects to provide a state loan in the form of repayable financial assistance.

Analysts evaluate the authorization of public support and the submission of bids from both bidders as a positive move in the tender. However, they appeal for quick clarification of the financing of the entire project. And some warn that construction will be significantly more expensive than current estimates. “Including financing, I expect the cost of one block to be more like 400 billion crowns,” said Capitalinked.com analyst Radim Dohnal. According to earlier statements by the government and ČEZ, one new reactor should cost about 160 billion crowns in 2020 prices.

“Brussels-approved support for investment in a nuclear power plant, as negotiated by politicians, is nothing more than the opening of a gigantic ‘blank check’ on the account of the taxpayer of the Czech Republic. There is nothing to discover. Effectively a government capitulation. The big winner in the long term is 30 percent of the minority shareholders of ČEZ,” commented minority shareholder of the energy giant and J&T analyst Michal Šnobr on the X network.

Watch the interview with Věra Komárová in the new FLOW video show:

Interview with Věra Komárová for Flow • e15

Prime Minister Petr Fiala and Minister of Industry and Trade Síkela publicly declare that this is probably the most significant investment in the history of the Czech Republic. “I’ve already sat on a few big transactions in my life, so it’s not completely new to me. Of course, I am aware of the dimension of the largest investment in the history of the Czech Republic, including its importance for the future of the Czech economy and energy industry. “It will be all the more important to negotiate a good contract with strong protection of Czech interests in terms of guarantees for the final price and putting the reactor into hot operation, as well as possible compensation if there is a delay on the part of the state or the investor,” said Síkela.

According to him, Fial’s government should also decide and sign the contract on the construction of the second reactor in Dukovany. The remaining two new sources, which should be located in Temelín, will probably be resolved only by the government that emerges from the elections next year.