Czech utility CEZ is considering the possibility of expanding its nuclear power capacity.The group is looking at two huge investments – to build nuclear reactors in the Czech Republic and to acquire its Slovak counterpart Slovenske Elektrarne.
A large proportion of the company’s power capacity comes from lignite plants, but with those facilities ageing and the EU preparing a tougher carbon credit regime, nuclear power is being seen as a means of maintaining profitability.
Expanding the nuclear power stations at Temelin and Dukovany would address this, but CEZ was forced in April to cancel the tender to bring in a partner for Temelin after Brussels began a probe into whether a similar investment contract between EDF of France and the UK government to build Hinkley Point C constituted illegal state aid.
The decision by the European Commission to allow the Hinkley Point project to progress potentially opens the door for a similar arrangement in the Czech Republic.
Martin Novak, chief finance officer (above), admits that without some kind of power price guarantee it will not fly. “Without this kind of support, nobody would be able to take the risk of building the plant,” he says, though he insists that it will happen one day.
Jan Mladek, the Social Democrat economy minister, also remains keen on the project, pointing out that “the Ukraine crisis supports the case for building nuclear power in the Czech Republic” so the country can become more energy-independent.
The FT reports that the Czech government is less united on CEZ’s other grand project, the potential acquisition of 66 per cent of Slovenske Elektrarne, which Enel of Italy has put up for sale. CEZ argues that the cultural and technical similarities of the two companies – once united in the former Czechoslovakia – offer substantial synergies. “There is nothing that would better suit us,” says Mr Novak.
Andrej Babis, the powerful finance minister and leader of the centrist Ano party, has questioned it on the basis of CEZ’s patchy acquisition record.
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