Rolls-Royce, ČEZ sign long-term service agreement for Dukovany

Rolls-Royce has entered into a long-term contract with ČEZ for life-cycle management services at the Dukovany nuclear power plant

ČEZ, which plans to expand existing NPPs, is a frequent eurobond issuer. Polish utilities also plan to tap the bond market to co-fund capex foto: © ČEZČeská pozice

ČEZ, which plans to expand existing NPPs, is a frequent eurobond issuer. Polish utilities also plan to tap the bond market to co-fund capex

UK-based power systems company Rolls-Royce was awarded a 20-year contract to provide safety-critical services to the Dukovany nuclear power plant, operated by Czech energy giant ČEZ.

The new life-cycle management contract follows the delivery of Rolls-Royce safety instrumentation and control systems to the Dukovany plant as part of nine-year refurbishment project. Rolls-Royce began its cooperation with ČEZ in 2000.

Control and diagnostic solution provider I&C Energo, a subsidiary of Hungary-based MOL Oil & Gas, is a third party to the contract. The value of the contract was not disclosed.

“ČEZ has been working successfully with Rolls-Royce technology for a number of years at Dukovany, and this long-term contract that we have now signed is a natural development in our business partnership. Life-cycle management is a key aspect of nuclear power plant operation, and it is vital to work with strong and reliable partners such as Rolls-Royce,” ČEZ deputy chairman Daniel Beneš said in a press release.

Life-cycle management services help customers manage costs and reduce operational risk by monitoring system operation, ensuring availability of parts and providing technical assistance and support services, according to Rolls-Royce.

“Rolls-Royce is able to draw on over 40 years of experience in the nuclear industry and this long-term agreement demonstrates the trust ČEZ has in our expertise. We understand the regulatory requirements and commercial pressures a utility faces, and our solutions help to ensure that the plant is operating safely, while maximizing long-term reliability and availability,” Benoit Chabre, managing director of instrumentation and control at Rolls-Royce, said in the press release.

Rolls-Royce has become increasingly active in Central Europe’s civil nuclear sector. Aside from the Czech Republic, the company has delivered projects in Bulgaria, Lithuania, Romania, Slovakia and Ukraine. The firm had global revenue of £10.8 billion in 2010, half of which came from providing services. Its instrumentation and control systems have been used in 104 nuclear reactors worldwide. Rolls-Royce is also the second-largest maker of aircraft engines and the 23rd largest defense contractor in the world. The company invested £923 million in reseach and development (R&D) in 2010. It is a separate entity from the carmaker of the same name.

The Dukovany nuclear power plant, 30 kilometers south of Třebíč in the Vysočina region, has four pressurized water reactors with a net output of 427 MW each. Construction began in 1974 and the units went online between 1985 and 1987. ČEZ has invested Kč 1 billion–1.5 billion annually in Dukovany since 2003 in an effort to upgrade the plant’s maximum capacity to more than 16,000 GWh of power a year in 2013, news agency Bloomberg reported in March 2010. ČEZ expects to complete the overhaul of Dukovany’s four units in 2015. The plant currently produces about 14,o00 GWh per year.

ČEZ is two-thirds owned by the Czech state. Its operating income (EBIT) for the first nine months of 2010 was Kč 54.5 billion. The company had an installed capacity of 14,370 MW and generated 47,836 GWh during that time.