Government may postpone decision on building new nuclear reactors

Czech Prime Minister Andrej Babiš has confirmed that the government may put off a decision on how to fund new nuclear reactors for the power utility ČEZ by extending the lifespan of the Dukovany power plant by ten years. The news has brought a cautious response from ČEZ and criticism from the opposition benches.

Dukovany nuclear power plant, photo: Zruda, CC BY-NC-SA 2.0

The Czech government was to have come to a decision on how to finance and build new nuclear reactors at the Temelin power plant by the end of the year and companies from Russia, the US and China were eyeing the possibilities of winning the highly lucrative contract.

However the country’s biggest expansion project –aimed at phasing out coal-burning plants and reducing carbon-dioxide emissions-has got stuck on the question of financing.

ČEZ has balked at starting a tender without receiving state guarantees for the massive investment while Prime Minister Babiš believes the power utility, which is 70 percent state owned, can handle the project by itself. However minority shareholders who are afraid that expenditures of that size would significantly impact dividend pay-outs are threatening lawsuits.

According to Industry Minister Marta Nováková buying them out is the most expensive option – and the least preferred, while the government still wants ČEZ to at least participate in financing the new reactors.

Andrej Babiš, photo: Filip Jandourek / Czech Radio

One alternative, discussed at the last government session is to put off the thorny decision by extending the lifespan of the Dukovany plant by 10 years beyond 2035. Prime Minister Andrej Babiš:

“The cost of a ten year extension for Dukovany would be 20 billion, while a new reactor would cost 200 billion, so we must carefully consider all the alternatives.”

ČEZ issued a statement saying that expanding Dukovany’s lifespan was a possibility but that much would depend on future regulatory and economic conditions.

The head of the State Institute for Nuclear Safety Dana Drábová was less convinced about the wisdom of procrastinating.

“The government is merely shelving the problem. Of course, there is the possibility that the energy sector will undergo such a radical transformation that a new reactor will not be needed. I would only welcome that. But no one can guarantee such a development.”

Dana Drábová, photo: Filip Jandourek / Czech Radio

President Zeman who has long advocated the need for new reactors, has criticized the decision. His spokesman said the president was surprised by the turn of events since there had been a clear commitment to making a decision by the end of the year, and no mention of another alternative had been made at the last meeting of energy experts at Prague Castle.

In an interview for Bloomberg this week Industry Minister Nováková said there was no question that nuclear power stations would remain part of the country’s energy-mix, since the Czech Republic couldn’t meet the set environmental targets without them. The question is not “whether” but “when, where and how many” reactors the country will need, she said.