Market News

 February 17, 2012
Czechs temper their nuclear ambitions

 Europe's biggest nuclear project is chopped from five reactors to two

An ambitious plan to build five nuclear reactors in the Czech Republic worth an estimated $28 billion has been scaled back to just two units. The Czech Republic won't build the other three anytime soon, even though Germany and Poland may have been counting on those units to supply electricity. Germany has closed eight of its oldest nuclear reactors and will close another nine by 2022.

Poland just delayed the start date of its first new nuclear power station by five years pushing to start date to 2025, three years after Germany closes its last reactor.

Power that Europe thought it could buy from Czech state-owned utility CEZ, or Poland, has evaporated before it even was lifted off the drawing board. The real winner in the short term will be Russia's natural gas supplier Gazprom.

Newly installed Czech Industry & Trade Minister Martin Kuba downshifted CEZ's ambitious goals calling the five-reactor plan "unrealistic," but he did not say what energy mix would be used in its place to meet growing demand for electricity in central Europe. The primary problem likely is how to finance the combination of two new units at Temelin, one at Dukovany, and two more at the Jaslovske Bohunice site in Solvakia.

The Czech government proposed that reactor vendors provide a complete turnkey solution, including up to nine fuel reloads for the new units. As part of the financing. the Czech government would guarantee rates and provide loan guarantees to CEZ as lures to investors. There's not complete agreement on that approach, but the government is thinking out loud about these ideas.

What may be "unrealistic" is the expectation that investors and reactor vendors would be willing to pump $28 billion into a nuclear power project spread across five new units at three sites. However, a plan for two reactors worth $10 billion at one site, Temelin, seems more likely to fly, especially since the United States just last week licensed two new reactors planned for the Vogtle site in Georgia said to cost $14 billion.