Press: CEZ execs favour splitting firm in two

Dukovany nuclear power plant, photo: CEZ

Executives at the semi-state power giant CEZ want to divide the company in two, Hospodářské noviny reported on Thursday. The state would retain control over CEZ’s coal, nuclear and gas operations, while the new firm would handle renewable energy and distribution, the newspaper said.

Dukovany nuclear power plant,  photo: CEZ
A decision on the construction of new nuclear reactors is due in the near future but it remains unclear who will cover the cost, Hospodářské noviny wrote.

Czech politicians are insisting that the new blocks go up. However, they have consistently refused to foot the bill.

CEZ’s management are therefore proposing the division of the company, along the lines of a scenario previously seen in Germany.

A study produced for the power firm by a team including strategists, outside lawyers, consultants and investment bankers and cited by Hospodářské noviny suggests that the best alternative for CEZ is one that “divides nuclear and conventional sources from distribution and new forms of energy”.

CEZ is officially working with models under which the state would guarantee the project to the tune of up to CZK 200 billion or CEZ would build the new nuclear reactors itself.

However, said Hospodářské noviny, the wording of the report makes it plain that splitting the company is the preferred option of CEZ’s leadership.

If the state were the sole owner of part of CEZ, it could order the construction project without regard to minority shareholders, who at present possess over 30 percent of the company.

Hospodářské noviny said that according to its information CEZ CEO Daniel Beneš had been sharing the findings of the study with politicians since its completion at the beginning of the year.

The daily said it had also acquired a copy of a presentation that CEZ had prepared for a session of the Economic Committee of the Chamber of Deputies at the Dukovany nuclear power station on Wednesday.

Dukovany will need new reactors when its current ones go out of commission in the year 2035.

CEZ is pushing for the government to make a decision on the funding of construction this spring so that it can begin selecting suppliers.

According to Hospodářské noviny, if CEZ is split in two all nuclear activity, traditional power production (coal, gas and hydro), coal mining (the Severočeské doly mining company) and highly lucrative trading will remain in state hands.

The new entity would meanwhile take over distribution, renewable energy, the sale of power to small consumers and the recently established CEZ ESCO, which is active in the area of energy services for companies and new energy.

The old state CEZ would initially own 51 percent of the freshly established company. However, it could gradually reduce its share to as low as 25 percent, in which case it would retain a blocking minority, Hospodářské noviny said.