Czech Republic plays for high stakes in Temelín nuclear power plant tender
The contract to build two new nuclear reactors at the current south Bohemian site of Temelín with the option for another three elsewhere has been described as the tender of the century. The deal will be worth hundreds of billions of crowns, but there is more than the money at stake. The decision offers a stark choice between US, French and Russian companies and technology with the Czech Republic looking to get key strategic know-how and spin off contracts from the winner.
Mr. Jackson was joined on the panel by representatives of its rivals for that juicy Czech tender, France’s Areva and the Czech-Russian joint venture of Škoda JS and Atomstrojexport.
They are in what to all extent and purposes is a nuclear beauty contest with the Czech Republic’s biggest company in terms of turnover, power giant ČEZ, the judge.
In purely commercial terms, the state-controlled electricity producer and one of Europe’s biggest electricity exporters is betting on nuclear fuel as Czech coal reserves run down.
ČEZ is holding a massive tender to build two new nuclear reactors at its current Temelín site with the option for another three. One of those options should be in south Moravia at Dukovany, another in Slovakia as a result of ČEZ’s joint venture with the Slovak state, and a third reactor appears to be being held in reserve.
ČEZ argues that nuclear can be the mainstay for the country’s electricity needs and is seeking to squeeze the best deal it can out of the three shortlisted companies.
Its main aim is to get as much base load electricity for its bucks. Some media reports have put the cost of the two Temelín reactors at around 500 billion crowns, though more realistic estimates seem to be around 300 billion or maybe less.
“It is I would say an information role for the government, so the government can have full and complete information about the tender, about the whole procedure of choosing the supplier for Temelín 3 and 4, the two new reactors. And it is also providing an interface with the companies and the governments behind them.”
The Czech government clearly sees the reactor tender as an important issue. US, Russian and French presidents have reportedly been lobbying behind the scenes for their companies. Mr. Bartuška again:
“I think that any nuclear tender in the world is a deeply strategic decision whether it is in Abu Dhabi, Finland, or the Czech Republic. You are choosing a friend, a collaborator, a supplier for the next, basically, 100 years. Fifteen to 20 years for construction, 60-80 years for operating the reactor and then 20 more years for decommissioning. So clearly, it is a long-term decision that will have an impact not just on this generation of Czechs but on the future ones as well.”
He has spoken out in the past against excessive reliance on Russia for energy. The Czech Republic gets most of its oil and natural gas from Russia. But Mr. Bartuška says what is at stake for the Czech Republic is safeguarding the nuclear know-how it already has and building upon it, with an eye on the boom in nuclear power plant construction and use expected over the next decades as countries try to reduce their carbon dioxide output.
“For us the most important issue in this is to get the nuclear know-how from any supplier and to keep the Czech Republic a nuclear country. We are, frankly, an unusual country from the former Eastern bloc. We have had nuclear reactor research centres and university education since 1955. Škoda Plzeň has built 24 reactors in the past. We have full nuclear know-how which is a very sought after commodity these days and we definitely want to remain in the nuclear club. That is why ČEZ and the government as well is pushing hard for the transfer of this know-how to this country. We do not want to be somebody who buys something they do not understand and has to ask the bosses to please operate it for us. We are quite glad we have six functioning reactors here in this country that produce 30 percent of our electricity. We have a very robust and respected nuclear watchdog and we have good schools. This is a very high tech industry.”
Mr. Bartuška stresses that nuclear power is a niche where the Czech Republic can earn a decent living in the world as some of the assembly plants that opened here over the last 20 years move on to cheaper locations. It is a high value sector with enormous growth prospects.
At the Prague conference, the main focus was on the immediate construction and supply work that the main nuclear contractors could push the way of Czech companies. Some of the tender candidates say that up to 70 percent of construction work could be won by local firms.
Radek Škoda is a lecturer in nuclear physics and engineering at Prague’s Technical University. He says that the three bidders for the Czech contract are equally matched in terms of technical know how and can plug gaps where this is required in the Czech Republic.
“There are several things that they can bring to the industry because they all of them have expertise in the nuclear field even though it might seem that only the Russians have the continuous effort of building nuclear reactors. Even Westinghouse and Areva have a lot of experience. Even thought they were not building nuclear reactors they were still building naval reactors for the submarines: Westinghouse for the Los Angeles and Seawolf class and Areva for the French reactors. So they have a lot of experience they can give to our country, not just in building the reactors but also in the fuel cycle.”
It is with regard to the fuel cycle where the current Czech nuclear performance is poorest. While the Czech Republic is one of the world’s few major producers of raw uranium, and helped the former Soviet Union launch itself as a nuclear superpower, it never really developed the downstream capabilities for turning that uranium into fuel rods for power plants. ČEZ at the moment is supplied with fuel rods from Russian company TVEL with the contract for the Temelín plant being switched from Westinghouse with effect from this year.
Radek Škoda identifies two main fuel cycle sectors where the Czech Republic could profitably step in and which should be weighed up when awarding the tender:
He underlines that the initial investment to get into these sectors are high but the potential rewards are even higher:
“Right now everybody is thinking about or building new nuclear reactors but once these nuclear reactors are built they will need nuclear fuel. And definitely the infrastructure for the nuclear fuel cycle is slightly lagging behind the reactors being built. So these countries that have the possibility to be in the fuel cycle especially in the bottleneck areas like conversion and enrichment, they will benefit a lot, especially in the coming decades. So it is not a short-term investment, it is a long-term investment. I would be really, really supportive if we can step into this field as well.”
Whether those hopes can be realised and whether the Czech Republic can use the Temelín tender to take a step up in the nuclear league should become pretty clear early in 2012 when ČEZ announces the tender winner.
