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Released April 15, 2014 | GALWAY, IRELAND
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Written by Martin Lynch, European News Editor for Industrial Info (Galway, Ireland)--Czech energy major CEZ AS (PRG:BAACEZ) (Prague) has cancelled a 7.2 billion ($10 billion) tender for two new nuclear reactors.
The 70% state-owned company pulled the plug on the extension of the Temelin nuclear power plant (NPP) after the Czech government announced that it was not going to provide price guarantees or any form of "stability mechanism" for low-emission energy projects. CEZ said that in the current electricity climate, the construction of new units at Temelin did not make economic sense. The news will come as a blow to leading bidders Rosatom (Moscow) and Westinghouse (Monroeville, Pennsylvania). Westinghouse is owned by Toshiba Corporation (TYO:6502) (Tokyo, Japan).
"Since 2009, when the public tender was launched, until today, the European electricity sector in Europe has undergone a turbulent development," explained chief executive director of CEZ Daniel Bene. "At the start, the project was fully economically feasible given the market price of electricity and other factors, but today all investments into power plants where revenues depend on sales of electricity in the free market, are threatened. It does not mean that we have stopped nuclear power plant construction in the Czech Republic. There is still an acute risk that within 20 years we will not be able to cover the electricity consumption of our country. However, our plans will have to be adjusted to changes currently being prepared in Brussels. Apparently, in the future it will be necessary to cooperate closely with the state in order to secure further development of nuclear energy."
In a statement, project bidder Rosatom said: "We respect the actions of the customer, CEZ. We understand that today's structure of the Temelin NPP construction project assumes that CEZ has the governmental guarantees of buy-out prices of future electricity, and that in the absence of such guarantees it is difficult for the Czech customer to enter the project implementation stage. On our part, we state that after CEZ and the Czech Government approve the integrated nuclear industry development plan of the Czech Republic, we will be glad to take part in its implementation".
The news marks a sharp u-turn on the bullish attitude the government had toward nuclear power expansion less than 18 months ago. In November 2012, the government had proposed an energy plan that granted the green light to the long delayed nuclear unit additions at Temelin and the extension and expansion of the existing Dukovany nuclear power plant. For additional information, see November 13, 2012, article - Czech Republic to Double Nuclear Power.
Temelin, located in South Bohemia, has a generating capacity of 2,000 megawatts (MW) and is the country's largest electricity producer. However, its location just 50 kilometers (km) from the Austrian border, has meant the expansion has been the cause of heightened political tension between both countries. In June 2012, CEZ announced plans for a tender seeking a strategic partner to expand the Temelin nuclear plant. For additional information see June 5, 2012, article - CEZ Seeks Nuclear Partner for Czech Republic.
The stop-start Temelin project has been plagued by troubles for more than 20 years. Temelin was originally due to house four reactors but was limited to two by the government back in 1993. CEZ has been fighting ever since to have the other two constructed and finally won its battle in 2009. For additional information, see April 13, 2009, article - CEZ Wins Approval to Finish Controversial Temelin Nuclear Power Plant.
View Project Report - 200004316
View Plant Profile - 1078043 1082760
Industrial Info Resources (IIR), with global headquarters in Sugar Land, Texas, three offices in North America and 10 international offices, is the leading provider of global market intelligence specializing in the industrial process, heavy manufacturing and energy markets. Industrial Info's quality-assurance philosophy, the Living Forward Reporting Principle, provides up-to-the-minute intelligence on what's happening now, while constantly keeping track of future opportunities.
The 70% state-owned company pulled the plug on the extension of the Temelin nuclear power plant (NPP) after the Czech government announced that it was not going to provide price guarantees or any form of "stability mechanism" for low-emission energy projects. CEZ said that in the current electricity climate, the construction of new units at Temelin did not make economic sense. The news will come as a blow to leading bidders Rosatom (Moscow) and Westinghouse (Monroeville, Pennsylvania). Westinghouse is owned by Toshiba Corporation (TYO:6502) (Tokyo, Japan).
"Since 2009, when the public tender was launched, until today, the European electricity sector in Europe has undergone a turbulent development," explained chief executive director of CEZ Daniel Bene. "At the start, the project was fully economically feasible given the market price of electricity and other factors, but today all investments into power plants where revenues depend on sales of electricity in the free market, are threatened. It does not mean that we have stopped nuclear power plant construction in the Czech Republic. There is still an acute risk that within 20 years we will not be able to cover the electricity consumption of our country. However, our plans will have to be adjusted to changes currently being prepared in Brussels. Apparently, in the future it will be necessary to cooperate closely with the state in order to secure further development of nuclear energy."
In a statement, project bidder Rosatom said: "We respect the actions of the customer, CEZ. We understand that today's structure of the Temelin NPP construction project assumes that CEZ has the governmental guarantees of buy-out prices of future electricity, and that in the absence of such guarantees it is difficult for the Czech customer to enter the project implementation stage. On our part, we state that after CEZ and the Czech Government approve the integrated nuclear industry development plan of the Czech Republic, we will be glad to take part in its implementation".
The news marks a sharp u-turn on the bullish attitude the government had toward nuclear power expansion less than 18 months ago. In November 2012, the government had proposed an energy plan that granted the green light to the long delayed nuclear unit additions at Temelin and the extension and expansion of the existing Dukovany nuclear power plant. For additional information, see November 13, 2012, article - Czech Republic to Double Nuclear Power.
Temelin, located in South Bohemia, has a generating capacity of 2,000 megawatts (MW) and is the country's largest electricity producer. However, its location just 50 kilometers (km) from the Austrian border, has meant the expansion has been the cause of heightened political tension between both countries. In June 2012, CEZ announced plans for a tender seeking a strategic partner to expand the Temelin nuclear plant. For additional information see June 5, 2012, article - CEZ Seeks Nuclear Partner for Czech Republic.
The stop-start Temelin project has been plagued by troubles for more than 20 years. Temelin was originally due to house four reactors but was limited to two by the government back in 1993. CEZ has been fighting ever since to have the other two constructed and finally won its battle in 2009. For additional information, see April 13, 2009, article - CEZ Wins Approval to Finish Controversial Temelin Nuclear Power Plant.
View Project Report - 200004316
View Plant Profile - 1078043 1082760
Industrial Info Resources (IIR), with global headquarters in Sugar Land, Texas, three offices in North America and 10 international offices, is the leading provider of global market intelligence specializing in the industrial process, heavy manufacturing and energy markets. Industrial Info's quality-assurance philosophy, the Living Forward Reporting Principle, provides up-to-the-minute intelligence on what's happening now, while constantly keeping track of future opportunities.
