The Czech government has embarked on a major nuclear investment, namely the construction of up to two new units at the Dukovany power plant. In July, they decided that the South Korean company KHNP would win the one hundred billion dollar contract, because it said that its offer was better in every way. The American Westinghouse, which is going to build the first nuclear power plant in Poland next door, was excluded from the tender immediately, and the French EDF lost. But these unsuccessful candidates now have a common interest, which is to prevent the South Koreans from building nuclear projects in Europe. The danger pointed out by critics from the beginning is returning to the government like a boomerang, which is the leverage of the Americans on the Korean KHNP, which they blame for not being allowed to use the reactor technology.
In mid-July, the government announced that the South Koreans were ultimately successful in the bid both because of the lowest price offered and because of better results from the construction of nuclear projects another. This was just the big risk that France’s EDF faced. It has been a state-owned company since last year and has many problems with construction delays. Whether the construction of the block in his native Flamanville, where construction began in 2007, was supposed to cost 3.3 billion euros and take 5.5 years. After sixteen years, it is not finished and the costs are estimated at 19.1 billion euros (over 482 billion crowns). As it is a state-owned company, it could have been influenced by the political situation and especially the economic situation in which France found itself after the elections.
But the fact that the French have several other nuclear orders around Europe is an advantageous situation for them. Similarly, America’s Westinghouse will build its first nuclear power plant for the Poles. The Polish government signed a contract with them last year without a prior offer. In addition, Westinghouse is a supplier of nuclear fuel to some European countries. In the last two years, he signed contracts for supplies to the Czech Republic as well.
On the other hand, the South Koreans have not built and are not building any nuclear project in Europe. For me, the Czech order should work directly as an entry to the European market. They have built only four units at the Barakah nuclear power plant in the United Arab Emirates. Construction began there in 2012. Drilling on the fourth, final unit began in 2015. The first unit began commercial operation in April 2021, the second unit in March 2022, the third unit in February 2023, and the last one in March. That is, without much delay. It seems that the better results were also one of the reasons that CEZ was taken as an investor and then the government as a positive thing. And then, of course, the fact that KHNP promises that it should compensate for non-compliance with the conditions, ie not fulfilling the plan.
However, neither EDF nor Westinghouse are likely to want KHNP to participate in nuclear projects in Europe. From the beginning, there was a legal dispute between KHNP and Westinghouse, which also applied for the tender for the Czech blocks and was dismissed. According to the Americans, the Koreans do not have the authority to use the reactor technology they gave to the Czech Republic in the offer. The Americans accuse the South Koreans of not complying with US export control regulations and want to fight back legally.
After announcing the offer, KHNP only responded by saying that it had a different opinion regarding the right to use the technology. And she said she would follow American rules. At the time, ČEZ only told the controversy that it had proof of ownership of the technology from the South Koreans. Regarding the fact that the investment in Dukovan should be the largest since the establishment of the independent republic and that this dispute, which will be dealt with by international arbitration, is very substantial, no the government announced that they had a promise from KHNP that it was. to solve the problem and it would not affect the order of the Czechs.
Weird response CEZ
But now Westinghouse and EDF attacked the entire course of the nuclear bid. They filed an appeal with the Office for the Protection of Economic Competition (ÚOHS) against the selection of KHNP in the competition, where they question the approval of the South Koreans the technology offered and the transparency of the to use the entire offer. The Antimonopoly Office is now analyzing both applications.
ČEZ’s response, which said that the offer has a security exception, is strange, so an appeal cannot be filed against the course of the proceedings. However, the ÚOHS quickly responded to this statement by saying that it will still be resolved in the administrative proceedings whether the course of the offer can be questioned. Again, the government reacted as always: it is not worried about the risk to the offer.
A delegation from South Korea arrived to negotiate on behalf of the Americans in the past few days, but it did not produce any concrete results. The South Koreans themselves say that the trade disputes must be resolved by next March. What will happen if that doesn’t happen, we don’t know. And the Czech government doesn’t seem to know it either.
Even without this problem, there are plenty of other question marks and half-truths surrounding Dukovan’s extension, how we write in detail here. The government should tell the citizens directly that the final price of 200 billion crowns for one block is unrealistic. And also without guaranteeing that new blocks will mean free electricity in the future. Likewise, we know, ie permission to the public support model, for only one block. She’s not quite up to it yet. We still don’t know what will happen with the second block. We have not yet requested a second notice.
The price of 200 billion crowns per block is the current price that would apply now without taking into account financial costs, ie loan costs. Therefore, it is definitely not possible to say that it is the total cost of one block. The fact that the state will take an interest-free loan for the duration of the construction (operation of the first unit should begin in 2036) does not mean that no one will bear the costs and they will go away. Taxpayers, who in this case are also electricity consumers, will pay for them through the state budget.
This means that they will lend to them through government bonds and the repayment costs will be borne by the taxpayer. If the state debt continues to rise, interest on bonds may also increase, as investors want a higher level of risk. And debt can be expected to grow just because of the size of Dukovany’s investment. From the experience of other nuclear projects, we can read that the financial costs in the end are many times higher than the costs, including the construction itself and the technology used. If, according to the government, the price of the two blocks is going to be 400 billion crowns, with the increase in interest rates on government bonds, it can be expected that the final price will be at least double.
2024-08-28 04:42:00
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