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Czech Republic: CEZ to Postpone Completion of Temelin

Published: July 25, 2013; 11:42 · (Vindobona)

Czech energy company CEZ announced that the decision for the finalization of nuclear power plant Temelin will take at least a year longer than planned.

Czech Republic: CEZ to Postpone Completion of Temelin / Picture: © Vindobona.org

In an interview with “Euro”, CEZ’s strategy director Pavel Cyrani declared that the planned deadline of the energy company for the decicion on the granting of the tender will take at least one more year. The reason for the postponement is because CEZ intends to make the final decision only after the government's energy strategy is approved and a possible fixation of electricity prices from the two new nuclear units is determined.

"Three processes are under way here at the moment. The tender for Temelin´s completion which we have completely under control. The other two are controlled by the Czech Republic. One of them is the still ongoing debate about the state energy strategy which will determine when and what energy sources we want to build in the Czech Republic. We think the final result could be known at the end of the year already," Cyrani said. "The third factor is the debate about the form of securing the investment environment by the state, for example the fixing of prices of electricity produced in the newly built units. The latest mentioned process is not too fast and we hope that it will bring some result in the horizon of twelve to eighteen months," he explained. "We want to decide on such an important investment like Temelin´s completion only at the moment when it becomes clear that it will be in harmony with the newly approved energy strategy and that return on the invested money is secured," Cyrani stated.

Earlier estimates published include costs for the completion of two new units of CZK 200bn to CZK 300bn. "We will know the result of the tender itself at the end of the year. However, it is obvious that we cannot sign the final contract where we will pledge to build the power plant before having confirmed the scheme of compensation as such," Cyrani noted.

The prices for electricity for the new units are supposed to be determined for at least thirty years, half of the units’ lifespan. According to Cyrani, with the current prices at the electricity market of € 40 per megawatt hour, the construction of new nuclear units would not pay off. "However, if we consider the current prices of baseload power, that is some EUR40 a megawatt hour, plus EUR32 in the contribution clients pay for support to renewable sources, we are getting close to over EUR70, that is a price with which Temelin will already be competitive," he remarked.

CEZ is leading negotiations with US-Japanese enterprise Westinghouse and Czech-Russian consortium MIR.1200 in the tender for the construction of Temelin. The new units are expected to start operating in 2025.