Czech power company ČEZ and its Elektrárna Dukovany II (EDU II) subsidiary has received updated binding bids from Korea Hydro & Nuclear Power (KHNP) and France's EDF for the construction of four new nuclear units in the Czech Republic. EDF is proposing its EPR1200 reactor, KHNP is proposing its APR1000.

EDF, KHNP and Westinghouse, submitted binding bids in October for a fifth unit at the Dukovany NPP and non-binding offers for up to three more units – a sixth at Dukovany and two at the Temelín NPP. However, in February the Czech government changed the tender to be binding offers for four new units, excluding Westinghouse, which was proposing its AP1000 reactor, because it "did not meet the necessary conditions". Prime Minister Petr Fiala noted that contracting for four units could have a 25% benefit in terms of costs compared with individual bids.

Four VVER-440 units are currently in operation at the Dukovany site, which began operating between 1985 and 1987. Two VVER-1000 units are in operation at Temelín, which began operation in 2000 and 2002.

Tomáš Pleskač, member of the Board of Directors and Director of ČEZ’ New Energy Division said EDU II “will now evaluate the bids and, in accordance with the contract with the state, we will submit the evaluation report to the Ministry of Industry and Trade and subsequently to the Government of the Czech Republic for final approval.” The bids were submitted electronically by means of special encryption and a uniquely secure storage.

It is expected that the contracts will be finalised during this year and ready for signing by 31 March 2025. “The final signing of the contracts will be followed by a thorough preparation of design and planning documentation so as to meet the deadline for the start of the test operation of the new unit in 2036.”

In parallel with the tender procedure, EDU II has been working on other parts of the project. After the Ministry of the Environment issued a positive Environmental Impact Assessment (EIA) in 2019, EDU II received a Siting Permit from the State Office for Nuclear Safety and a Generating Plant Authorization from the Ministry of Industry and Trade in 2021. A non-final zoning decision was issued on 30 October 2023.

EDF said its Updated Initial Bid Supplement covers the supply of engineering, procurement, construction and commissioning activities for up to four EPR1200 reactors at the Dukovany site (units 5&6), and at the Temelín site (units 3&4). The offer also covers the design and implementation activities for nuclear fuel and delivery of fuel assemblies for this programme.

The bid “is based on the proven and complementary skills of EDF, its industrial partners and the Czech Nuclear Industry”. It integrates EDF’s and its industrial partners’ experience in maximising the full potential of twin and fleet-effect. “Through its proposal, EDF proposes to be the single source of supply and integration of the EPR1200 technology and its project execution”, while relying on:

  • The know-how and industrial prowess of its subsidiary Framatome to supply the engineering studies and equipment for the nuclear steam supply system and instrumentation and control;
  • Its historical and trusted partners: GE Steam Power for the supply of the engineering studies and equipment of the conventional island, which is to be equipped with the French ArabelleTM 1000 steam turbine; and
  • Bouygues Travaux Publics for its proven performance in nuclear new build civil works activities.

EDF said: “A long-term partnership approach between the French and Czech nuclear industries supported by a tailor-made Czech localisation process, enhancing economic value and skills development for the Czech Republic. To date nearly 300 Czech companies have been identified, approximately 100 have been contacted and approximately 40 have been through the main steps of EDF's proven localisation process.”

EDF Group Chairman & CEO Luc Rémont noted: "By opting for a fleet approach with our European technology (EPR 1200), ČEZ and EDU II will secure a European partner committed to delivering the best technology with the best long-term benefits for the Czech industry and economy. The technological and industrial alignment between Paris and Prague that we propose holds the potential to reshape Europe’s new nuclear industry for generations to come."

KHNP CEO Dr Jooho Whang delivered an updated binding offer for the construction of new nuclear units to CEZ headquarters. In addition to the fifth unit at Dukovany, the offer includes binding options for three additional units, which are the sixth unit for Dukovany and two more units at Temelin.

“With successful projects in Korea and the United Arab Emirates, KHNP has proven that it builds on time, with quality and at the agreed price,” said Whang. “We believe that KHNP is the best option for the Czech Republic in terms of timely completion of the first reactor by 2036 and energy security,” he added.

KHNP is offering the APR1000 reactor with an output of 1,050 MWe. “It has already received EUR certification last year, which confirms that the APR1000 meets the highest European standards in the areas of safety, economic criteria and constructability,” KHNP noted. The reactor has been designed by KHNP specifically for export to European countries and has been localised to meet European conditions and comply with requirements based on the latest International Atomic Energy Agency (IAEA) and Western European Nuclear Regulators Association (WENRA) standards.

KHNP said it has been active in the Czech Republic since 2016, when preparations for the tender began. Since then, the company has been actively developing relationships not only with the Czech government, but also with universities and potential suppliers. “Cooperation with Czech companies is a long-term priority for KHNP. Since 2016, KHNP has identified over 200 potential Czech suppliers and signed more than 50 Memoranda of Understanding as a basis for future cooperation. In addition, KHNP is the only bidder counting on a Czech company for the delivery of the turbine, which is one of the most important and largest components in the nuclear power plant. The South Korean company is thus trying to maximize the share of Czech suppliers in the project, as requested by the Czech side.”

KHNP has also built a good reputation in the Trebic region, where the first of the new nuclear units is to be constructed. “In addition to supporting the local hockey club, it regularly organizes trips of South Korean volunteers who help with charity activities and try to introduce Korean culture to the local population…. During the covid pandemic, KHNP also donated masks and other hygiene supplies to schools, nursing homes and town halls in the region.”

Meanwhile, the European Commission (EC) announced it had approved, under EU state-aid rules, the Czech government's support of the construction of the new nuclear. The EC, which began its investigation in June 2022, said that the proposals had been modified to take account of concerns during the process. The Commission "concluded that the aid is appropriate to achieve the objectives pursued, as well as proportionate as it is limited to the minimum necessary, while the competition distortions caused by the measure are minimised”. The beneficiary of the measure is EDU II.

Czechia plans to grant direct price support in the form of a power purchasing contract with a State-owned Special Purpose Vehicle. The contract will ensure stable revenues for the nuclear power plant for a period of 40 years. The beneficiary will also benefit of a subsidised state loan to cover a majority of the construction costs and a protection mechanism against unforeseen events or policy changes that may make the realisation of the project impossible.

EC Executive Vice-President in charge of competition policy, Margrethe Vestager, said the Commission’s role is to ensure that the state aid proposed is targeted, proportionate and does not unduly affect the EU energy market. “During our investigation Czechia has modified the initial measure and submitted substantial commitments. This has allowed us to approve the aid.”

The commitments entail certain restrictions. The EC said that to "ensure that the aid is proportionate and does not unduly distort the functioning of the electricity market" Czechia had "introduced a remuneration formula akin to a two-way contract-for-difference, which provides revenue stability and limits excess remuneration through a yearly ex-post settlement". This effectively means that if electricity prices are below the agreed level, the nuclear project will receive a subsidy to make it up to the agreed price, and if electricity prices are above the agreed price, the nuclear project would pay money back to the government.

The added that the period of direct price support had been cut from 60 years to 40 years and the strike price was being set "on the basis of a discounted cash flow model ensuring that the total aid amount, taking into account the subsidised loan, is limited to the funding gap of the project … EDU II's shareholders will get a rate of return equal to the market return that investors would require on a similar investment".

There will also be a clawback mechanism lasting for the operational lifetime of the plant to ensure "additional gains generated by the project will be shared with the Czech state" and "to avoid market concentration and remove the risk that the measure provides an advantage to certain electricity consumers, Czechia has committed to ensure that at least 70% of the power output will be sold on the open power exchange – namely, day-ahead, intraday and futures markets – over the entire lifetime of the power plant. The rest of output can be sold on objective, transparent and non-discriminatory terms by way of auctions".

Image: Dukovany nuclear power plant