Nuclear development plan sees time out on key reactor decisions

Temelín, photo: archive of Radio Prague

The Czech nuclear development plan lays out the broad strategy to build new nuclear reactors but is also seen calling a time out on the decisions when to push ahead with the investment and awarding the construction contract until electricity price developments are clearer.

Temelín, photo: archive of Radio Prague
The Czech Cabinet should adopt on Wednesday its long term programme for the development of nuclear power in the country.

The document is a sort of answer to the ‘what next?’ question after Czech nuclear development hit the buffers with ČEZ’s decision to abandon its tender for two new reactors at Temelín in April 2014.

The plan will flesh out the idea of telling ČEZ to push ahead with preparations for construction of one new reactor at Dukovany and plans for a further one at Temelín. At least one further reactor at both sites is expected in the mid term.

With the ‘what’ question dealt with, the ‘who’ is also addressed, though in rather vague terms. ČEZ, or rather a daughter company, is seen piloting the project of bringing new reactors on stream and teaming up with a minority partner or partners, probably an established nuclear technology provider such as the ones that piled into the previous Temelín tender.

But the ‘how’ question is perhaps the most interesting and the one where the answers are the least forthcoming. It’s fairly clear that more than a year after the collapse of the Temelín tender there is no political agreement on whether the state should cover some of the costs or at least give guarantees removing some of the risk from building new nuclear plants. ČEZ has not altered its stance either that it is not willing to push ahead with construction projects unless they have a real chance of turning a profit.

So, Wednesday’s answer to the ‘how’ question is essentially an admission of the political log jam and a call for a time out. According to high placed ministry sources, ČEZ will be tasked with pushing ahead with nuclear reactor preparations at both Dukovany and Temelín sites but the decision on how one or more reactors might be financed will not be taken for a further four or more years and in fact, the last date for a construction contract to be signed could be left at the latest until around 2025. A new reactor is needed at Dukovany at the latest by around 2035. So the decision is no immediate decision.

The reasoning behind this is as follows: with aged coal and other power plants being phased out across Europe at the moment and little construction taking place to replace the lost capacity, its reckoned that the current excess of electricity and capacity should rapidly start to disappear. With demand and supply more in line, electricity prices should start to rebound.

Predictions of a rise to around euros 50/MWh by 2019 from around euros 33/MWh are believed to be within the realms of possibility and that could signal a further recovery further down the line. By 2019 or a bit later it is believed that electricity might have firmed so much and be seen firming further so that state subsidies or guarantees for new nuclear plants are simply no t necessary. That way, ČEZ, can push ahead with transforming its mature plans into reality without a shareholder revolt against potentially rash and risky decisions.