ČEZ talks up guaranteed nuclear power prices to support Temelín

ČEZ chief, government’s Temelín point man back guaranteed prices for nuclear-generated electricity to support construction of new plants

Plans are to at least double the size of the Temelín complex with the current two reactors increased to four | na serveru Lidovky.cz | aktuální zprávy Plans are to at least double the size of the Temelín complex with the current two reactors increased to four | foto: © ILUSTRAČeská pozice
Plans are to at least double the size of the Temelín complex with the current two reactors increased to four

The head of Czech state-controlled electricity giant ČEZ and the government’s appointee overseeing plans to add two new nuclear reactors at the existing Temelín site have spoken up in favor of a British model of offering guaranteed prices for nuclear generated power aimed at financing new plants.

ČEZ chief Daniel Beneš praised British proposal for offer guaranteed prices for nuclear power in a bid to encourage a new generation of power plants to replace most of the existing ones which are due to shut down by 2025. “The British in this regard have perhaps gone the furthest,” he told the daily E15, adding that that the state stepped in with payments if the power prices slipped below the guaranteed level but returned money if they were higher.

Václav Bartuška, the government point man to supervise the estimated Kč 200 billion project, told E15 that guaranteed power prices are likely to become the norm in Europe — even in Germany, which is committed to phasing out its nuclear power plants — if new plants are to be built.  “In Europe, we have created a situation where investing in any kind of energy is not possible without some sort of support,” he said.

‘In Europe, we have created a situation where investing In any kind of energy is not possible without some sort of support.’

The Prague-based brokerage Wood & Company on Tuesday described the report that guaranteed feed-in tariffs might be sought to support Temelín’s expansion as positive for Prague- and Warsaw-listed ČEZ. “Today’s comments support our view that the government is taking its role of creating a supportive environment seriously,” the brokerage added.

Neither ČEZ nor the Czech government have publicly gone into detail about how it intends to finance the proposed Temelín plants or what sort of state support or guarantees might be offered. The latest reflections about both follows a skeptical analysis last week of the economic arguments ČEZ can muster to back up the case for going ahead with the Temelín project.

The British in July 2011 proposed a model aimed at encouraging private companies to build new nuclear plants with guaranteed power prices seen as a long-term measure. It would also be backed up by a guaranteed minimum price for carbon emissions credits that would start off at Ł16 per tonne in 2013, reach Ł30 per tonne by in 2020 and Ł70 per tonne by 2030.

The UK intends to start putting the legislation in place for this new model from May 2012 onwards with the package in place so that projects can be financed from 2014. ČEZ expects bids for the Temelín expansion to be submitted by July 2 this year with a decision on whether to go ahead and, if that’s the case, a winner of the tender by the end of 2013.

That would appear to make its fairly urgent for the government to start spelling out possible nuclear support scenarios fairly soon so that ČEZ can start crunching the numbers once bids from the three tender bidders, Areva, Westinghouse and the consortium of Russia's Atomstrojexport and Škoda JS, have been submitted.

— Previous articles about the proposed expansion of Temelín are archived here