New Nuclear Construction in Czech Republic: Approval for Fifth Block at Dukovany and Potential for Temelín Expansion

Approval from the European Commission only applies to the construction of the fifth block in Dukovany. If it is decided to build additional blocks in Dukovany and Temelín, a public support permit must be obtained for them separately.

“Nuclear now provides more than a third of consumption in our country, and in the future it should even be half. The development of the core strengthens our energy security, self-sufficiency and also the competitiveness of our companies,” said Prime Minister Petr Fiala (ODS).

He also said that thanks to the Czech leadership and two years of work within the EU, nuclear power is recognized as a reliable and emission-free source of energy. “And that allowed us to get a call for the main project of finishing Dukovan. This is the largest investment in the history of the modern Czech Republic,” said the Prime Minister.

Industry and Trade Minister Jozef Síkela (STAN) said that the Commission’s approval would contribute to the development of nuclear energy throughout the European Union.

“This is the first decision that takes into account the modernization of the design of the European electricity market, so it can be expected that other nuclear projects will be based on our model when we set public support,” he said.

According to the Minister of Finance Zbyňek Stanjura (ODS), the decision received by the government will be the basis for determining the model of public support for the construction of several nuclear units. “The financing arrangements for the construction of more blocks are now being prepared by an inter-ministerial working group established under the Ministry of Finance,” said Stanjura.

The public support model includes three basic instruments, with the aim of ensuring the economic viability of the project and protecting the investor from external risks. First, it will involve the provision of a state loan in the form of repayable financial support for the preparation and construction phase, which will be repaid within 30 years after obtain a license to operate under the Atomic Energy Act. The exact amount of the state loan will be determined according to the result of the selection process. The government will approve the loan, the Ministry of Industry will provide according to the Low Carbon Act.

The second support tool is the guaranteed purchase of manufactured electricity. As part of it, the state undertakes to buy electricity from the new nuclear source from the investor for a period of 40 years.

The contract for the purchase of electricity, similar to the provision of reimbursable financial support, will be terminated on the basis of the low carbon law. In the case of the fifth block project in Dukovany, the basis is the purchase price. If the market price of electricity falls below this agreed purchase price, the state or an authorized entity will pay the difference to the investor. This ensures that the investor achieves the minimum guaranteed profit of the project even in a situation where electricity market prices would be low. On the other hand, if the electricity market price is higher than the agreed purchase price, the investor must pay the difference back to the state, which transfers this profit to the state budget or use it to reduce the regulated part of the electricity price, and families and companies will be able to make a profit from it. The electricity purchase price will be determined on the basis of economically reasonable costs and profit.

The third tool is then the protection of the investor from external risks, i.e. unpredictable events, such as changes in legislation or public policies, which could have a negative impact on profitability or its actual implementation ‘ project.