Ministry seeks to ‘turn off the lights’ on Dukovany: key contracts may no longer be accessible in the Register of Contracts

The Ministry of Industry and Trade is proposing a broader amendment to the so-called Low-Carbon Act, primarily intended to technically harmonise the rules for supporting new nuclear sources. For the public, however, the most visible change is a restriction on transparency: selected key contracts relating to the construction of nuclear units, including the contract for difference supporting new sources, would no longer have to be published in the Register of Contracts, while some documents already published could be made inaccessible.

This week, the Ministry of Industry and Trade published a draft amendment to the so-called Low-Carbon Act, namely Act No. 367/2021 Coll. on measures for the transition to low-carbon energy, as well as the related Energy Act and Register of Contracts Act. Formally, it is primarily an adjustment of the support mechanism, the processes for concluding contracts and the settlement of balancing payments for new nuclear sources.

The amendment is intended to introduce a settlement regime agreement as the basic support model, i.e. an equivalent of a two-way contract for difference, while a purchase agreement is to remain an alternative if the government provides for it by resolution. The ministry justifies the proposal by saying that the European Commission’s current decision-making practice favours the use of the settlement regime.

The proposal also explicitly stipulates that there is no legal entitlement either to conclude a support agreement or to receive support at a specified level. Purchase agreements and settlement regime agreements are newly to be considered public-law agreements rather than private-law contracts, as provided for under the current legislation.

Before the amendment takes effect, it must pass the consultation procedure and legislative process, and be published in the Collection of Laws. Its final wording may therefore still change.

Key contracts for the nuclear tender to be excluded from the register

A change to the Register of Contracts Act could have a substantially greater practical impact. The new exemption from the obligation to publish contracts in the register is to apply to agreements concerning the use of nuclear energy, nuclear fuel, spent fuel, nuclear material and radioactive waste, as well as supplies, services, construction work and rights directly or indirectly related to these areas.

The public would therefore no longer learn the details of these contracts. The settlement regime agreement is explicitly mentioned, i.e. the agreement under which support will be paid to the operator of new nuclear sources, or under which the power plant operator will pay the state if the electricity price on the day-ahead market is higher than the price in the agreement (strike price). These documents will determine the financial relationship between the state and the investor, the basic support parameters and the terms for protecting the state’s security interests.

The proposal also makes it possible to render inaccessible contracts that have already been published in the Register of Contracts if they newly fall under one of the exemptions. A transitional provision also states that previous non-publication or incorrect publication of these contracts must not result in their ineffectiveness or invalidity.

The ministry fears contracts could become ineffective in the event of incorrect publication

The ministry cites the commercial sensitivity of nuclear contracts and the risk that incorrect publication of part of extensive contractual documentation could jeopardise its effectiveness. The explanatory memorandum explicitly mentions new nuclear source projects, modernisation of nuclear facilities and fuel purchases as areas where the legal certainty of the contracting parties should take precedence over transparency.

The purpose of the amendment is also to correct legislative shortcomings that arose during the previous amendment to the act. The explanatory memorandum states that the key 2023 amendment, which introduced the settlement regime agreement, was adopted on the basis of a parliamentary amendment and that the resulting legislation was not perfect in all respects.

The case thus highlights a broader weakness of Czech energy legislation. Major amendments are often created only during deliberations in the Chamber of Deputies, without a complete standard legislative process, and subsequently require rapid technical corrections.