The European Commission (EC) has opened an in-depth investigation to assess whether planned Czech public support for the construction and operation of two new nuclear units at the Dukovany NPP is in line with EU state aid rules. “At this stage, based on its preliminary assessment, the Commission has found the project necessary and considers that the aid facilitates the development of an economic activity,” the EC said. “Nevertheless, the Commission has doubts on whether the measure is fully in line with EU State aid rules. For this reason, the Commission has decided to open an in-depth investigation.”
In April 2024 the EC approved aid for the construction and operation of a single new nuclear reactor at Dukovany. However, the Czech government subsequently decided to extend the investment in nuclear capacities. In July 2024, Korea Hydro & Nuclear Power (KHNP) was selected for the project despite hostile legal action by both EDF and Westinghouse, which had also tendered for the project. In October 2025, Czechia notified the EC of its plan to support the construction and operation of two new 976 MWe nuclear units in Dukovany.
The two new units, which are scheduled to start operating in 2036 and 2037, should increase the security of electricity supply for Czechia and for neighbouring countries, helping the decarbonisation of the energy sector and diversifying the Czech energy mix. The beneficiary of the measure is Elektrárna Dukovany II (EDU II), a company set up to develop and operate the new nuclear units. EDU II is owned by the Czech state (80%) and state power company ČEZ (20%).
Czechia plans to support the construction of the new units through three measures. These include:
- a low-interest repayable State loan of an initial amount currently estimated between €23 billion and €30 billion, which will cover the full construction costs;
- a two-way contract for difference (CfD) with a proposed duration of 40 years to ensure stable revenues for the nuclear power plant; and
- a mechanism to protect EDU II in case of policy changes and adverse impacts, to address the risk arising from the longevity of exposure to policy changes.
The EC said the investigation will be related to:
- The appropriateness and proportionality of the aid package. Since there are several aid measures that together can limit the risk for the beneficiary, it is important to ensure that no more aid than necessary is ultimately granted. “In particular, the Commission has doubts on whether the proposed package achieves an appropriate balance between reducing risks to enable the investment and maintaining incentives for efficient behaviour, while avoiding excessive risk transfer to the State.”
- The impact of the measure on competition in the market and whether this is kept to the minimum. “In particular, the Commission has concerns that several essential design elements of the CfD remain insufficiently specified, preventing the Commission from fully assessing whether the mechanism maintains efficient operational and maintenance incentives.” The EC said it “cannot conclude at the current stage that there are sufficient safeguards to ensure that ČEZ’s existing market power is not consolidated or indirectly reinforced, and to prevent that aid is transferred to consumers or specific market participants.”
- The compliance with other provisions of EU law, in particular with the design principles set out in the Electricity Regulation as regards the CfD.
The EC said it “will now investigate further to determine whether its initial concerns are confirmed”. The opening of an in-depth inquiry gives Czechia and interested third parties the opportunity to submit comments.
European Union member states are free to determine their energy mix. State aid rules allow member states “to facilitate the development of certain economic activities under specific conditions”. The support “must be necessary and proportionate and must not adversely affect trading conditions to an extent contrary to the common interest”.
The Czech Republic currently gets about a third of its electricity from the four VVER-440 units at Dukovany, which began operating between 1985 and 1987, and the two VVER-1000 units in operation at Temelín, which came into operation in 2000 and 2002.
