ČEZ Inks Deal With State For New Dukovany Unit

The state and the energy company ČEZ have signed a deal for a new unit at the Dukovany Nuclear Power Plant. Deputy Prime Minister and Minister of Industry and Trade Karel Havlíček and CEZ CEO Daniel Beneš signed a contract in addition to the umbrella agreement, which defines the zoning permit for the construction and sets the dates for selecting the construction contractor. The company would like to rank applicants for the development of a new unit at the end of 2022 and wants to announce a tender in December this year.

The contract states that the contract with the supplier will be negotiated and ready for signing after December 31, 2022, no later than June 30, 2024. ČEZ’s subsidiary, called Elektrárna Dukovany II (EDU II), which has a project in charge, however, should make efforts to negotiate and prepare the contract with the contractor for signature earlier. The budget for ensuring the preparation for the construction of the unit and EDU II operation for the first phase of the project until the middle of 2024 amounts to CZK 3.4 billion.

Havlíček confirmed today that the construction of a new power plant unit should begin in 2029. “It is crucial for the state that the investor undertakes to negotiate a contract with the supplier by 2024 and intensively continue the preparation of new nuclear power plants—operation in 2036. Which means ensuring stability and energy security and the supply of cheap and emission-free electricity, “he said.

Beneš told ČTK that it is not in ČEZ’s interest to exclude some applicants from the competition for the Dukovan construction before the tender. The possible participation of Chinese and Russian companies is criticized by part of the opposition. “It is in CEZ’s interest to have as many bidders as possible to compete against each other, and thus force each other to improve bids, because we need to get the best bid in the end. For this reason, CEZ is not interested in eliminating anyone,” said CEO.

“On the other hand, the agreement between the state and CEZ, which we signed, describes the basic security interests of the state and ways to enforce them, and it says that the state can say during or at the end of the competition that it wants one of the bidders for security reasons,” said Beneš. He added that Havlíček and Prime Minister Andrej Babiš (YES) have a similar view on the matter as he did and favor leaving as many candidates in the competition as possible for as long as possible.

Government Commissioner for Nuclear Energy Jaroslav Míl stated that the Czechia is not delivering Dukovany, but is replacing half of its current capacity. The existing units of the power plant should be shut down around 2035 to 2037.

Mil and his team will hold talks in Brussels with the European Commission on a so-called notification for a new resource, which some experts say may be critical. The European Commission will examine and approve the planned nuclear source, especially in terms of possible illegal state support.

The state will finance the new nuclear unit in Dukovany interest-free during construction, with a 2% interest rate expected during operation. The state should participate in the development from 70 percent. The rest should be paid by ČEZ, which will also cover all possible additional costs. According to him, Beneš confirmed today that the expected amount for the construction of the unit at current prices is approximately six billion euros, i.e., around 160 billion crowns.

The possible construction of a new nuclear power plant in the Czech Republic has been hampered in the previous few years by ambiguities about financing; the project has only begun to take concrete shape in recent months. Environmentalists have been protesting against the construction of a new nuclear power plant in the Czech Republic for a long time.