Ján Štuller: We do not want to avoid a tender for Dukovany and Temelín. We are not taking the Hungarian route

The Czech Republic is not currently considering taking inspiration from Hungary, which agreed directly with Russia's Rosatom to build new nuclear reactors – without a tender. “The Czech Republic wants a competition,” confirmed Ján Štuller, the government's commissioner for nuclear energy, in the second part of an interview with oEnergetice, adding that there is complete consensus on this issue.

According to Štuller, all six foreign bidders for the construction of reactors in the Czech Republic have expressed a willingness, if necessary, to take equity stakes in ČEZ subsidiaries that would be responsible for building new reactors at Dukovany and Temelín. These foreign bidders are Atmea (a French-Japanese venture), CGN (China), EDF (France), KHNP (Korea), Rosatom (Russia) and Westinghouse (USA).

The government commissioner also said that a large team of experts would work on formulating requirements for suppliers of the new Czech reactors. The Czech list of characteristics that a latest-generation 3+ reactor should have may be quite original – it could also include a basic idea of the optimal price for such a reactor.

(The first part of the interview with Ján Štuller can be found here.)

What specific requirements will the Czech Republic have for new nuclear reactors at Dukovany or Temelín? In the previously cancelled Temelín tender, there was a requirement that these should be generation 3+, or three-and-a-half generation, nuclear reactors. Not merely third-generation reactors. Will this also apply in the next tender, which could involve six foreign interested parties?

Last year, we asked all ten originally approached foreign companies to state the basic technical characteristics of their reactors that correspond to generation 3+. In other words, to say whether the type of reactor they offer is generation 3+ or not. On the other hand, although we have our own ideas, we do not have any precise definition of what generation 3+ is. There is no encyclopaedia in which this is precisely described, nor is there an exact international definition enshrined in any agreements. There is no internationally defined and recognised clear boundary between what belongs to generation 3 and what belongs to generation 3+.

So do you want to create such a definition for the purposes of the planned tender?

To a certain extent, yes. Above all, we want to confirm a list of features, characteristics and parameters that are typical of the different generations – especially the third generation, generation 3+, and possibly the future fourth generation. During the tender, we will then look at how each reactor type meets the respective characteristics. Individual reactor types come closer to these various characteristics to differing degrees. No reactor is clearly the best in every respect. These are different reactor concepts. All potential bidders state that they offer generation 3 or 3+ reactors. We will conduct a detailed analysis of this during the competition.

Could you already mention examples of technical characteristics that distinguish generation 3+ from pure third generation?

These are primarily technical characteristics and parameters relating to reactor safety. In this regard, generation 3+ is particularly shaped by post-Fukushima measures. Some colleagues in the sector say that the entire generation 3+ concept is merely a marketing gimmick. My view is that generation 3+ is characterised by the ability to operate for a longer period and, in particular, to ensure reactor nuclear safety in island mode, i.e. if everything possible in the vicinity of the plant fails. An important requirement, for example, is for the so-called ultimate heat sink to be able to remove residual heat produced by the reactor after shutdown for at least thirty days. I am convinced that we must place emphasis on a greater extent of passive safety systems and greater plant resilience to external impacts, whether natural or caused by human activity. We are also considering defining economic and reliability parameters.

So, an economic characteristic of generation 3+?

That would be a Czech peculiarity; perhaps we could contribute to defining generation 3+ from this perspective as well. In principle, we would stipulate that reactors should be relatively inexpensive and feature an optimal ratio between price, including operating costs, and quality. However, we are only discussing the configuration of individual characteristics so far; this is purely brainstorming. We will see what we arrive at.

What about, for example, a core catcher intended to catch molten material in the event of a reactor accident? Some of the reactors under consideration have one, while others do not. Is this a characteristic of generation 3+?

There are reactor designs which, in the event of severe accidents involving melting of the reactor core, rely on the philosophy of retaining corium – the molten core – inside the reactor pressure vessel. Then there are designs which rather envisage retaining corium outside the reactor. If we are talking about overarching fundamental safety functions, it is the ability to prevent the release of radioactive substances into the external environment and, in part, to maintain control over the fission chain reaction after a severe accident.

From this perspective, there are two solutions that make this possible – either there is a core catcher beneath the reactor, or there is effective, reliable and credible external cooling of the reactor vessel, which keeps the molten material inside the reactor. The Fukushima accident showed that more consideration also needs to be given to situations where all external sources fail – for example, backup power from the grid, some diesel generators and water supplies as a result of damage to roads and pipelines caused by a major seismic event.

A large team of experts will work on formulating the individual requirements for suppliers of future Czech reactors. It is necessary to assess which requirements are rather duplicative and which ensure a higher level of protection for the environment, workers and the public. And every word in these requirements can mean a great deal of money, perhaps billions.

Equity participation is possible

The project to build additional reactors at Dukovany and Temelín should be managed by two newly created ČEZ subsidiaries. As far as I know, no one has yet ruled out the possibility that the state could acquire these companies in full?

No one has ruled it out, but when it comes to making a decision, the matter is beyond both my remit and that of the Standing Committee on Nuclear Energy. The government will decide on this based on the materials we prepare. For now, however, this question is premature.

Are you discussing with the six foreign bidders whether they would be willing to take equity stakes in these companies?

Virtually all of them are willing to take equity stakes in these companies to some extent. We included this question in the official list of questions sent out last year. All six companies replied that they were prepared to do so – if necessary.

Including Westinghouse? I ask because Westinghouse indicated in the past that it might have problems with something like that…

Westinghouse has not ruled it out completely either.

We are seeking an exemption from Brussels

In recent months, a debate has developed in the Czech Republic over whether a conventional tender or an intergovernmental agreement with one of the countries from which the parties interested in building reactors at Dukovany and Temelín originate would be better. This debate was misleading because there are actually more options. But there is probably some consensus that construction cannot proceed strictly under the Public Procurement Act – given that this is how things work virtually nowhere in the world?

There is indeed consensus on that. The Standing Committee on Nuclear Energy also agreed on it at its most recent meeting. At the same time, it tasked officials with beginning to prepare materials for negotiating a sectoral exemption with Brussels. This exemption for the electricity generation sector would then make it possible to apply the Public Procurement Act without having to adhere strictly to all its provisions. So first we need the sectoral exemption…

Compared with how the Hungarians proceeded in their agreement with Russia on completing the Paks nuclear power plant, we are effectively taking the entirely opposite approach. The European Commission approved the Hungarians' decision only after they had reached an agreement with the Russians.

But we are talking about different exemptions. As far as the Czech Republic is concerned, we are now discussing the fact that the Czech Republic wants a competition but does not want to apply the Public Procurement Act in full. The European Commission's subsequent favourable opinion on the Hungarian procedure is something entirely different from what we are seeking.

So the key message is that, unlike in Hungary, a competition is being prepared here, even though it may differ from the previous Temelín tender. Does the possibility of concluding an intergovernmental agreement concerning the winner of this competition nevertheless remain in play? Are we studying the Hungarian experience in this respect?

I must admit that I do not study the Hungarian route in any particular depth. I proceed from the fact that we have a consensus here pointing towards a competition, an unwritten agreement that can nevertheless be deduced from statements by virtually all government officials who have commented on the matter. No government official here is promoting the Hungarian route. Given this, the Hungarian route is not relevant to us in the current situation.

Let us return to the exemption. The Czech Republic applied for one several years ago but did not obtain it. What does that imply for us?

We must prepare better. On the other hand, the situation at the time was somewhat different. Today it is quite evident that neither ČEZ nor anyone else in the Czech Republic determines wholesale electricity prices. They are determined primarily on electricity exchanges in Germany. ČEZ's position remains dominant, but it is no longer as strong as it was in 2008. Other players have emerged in the Czech electricity market. The situation has changed; we now need to describe it in detail and update the information submitted to the European Commission with the previous application. We intend to prove that no player is dominant in the Czech market – in the sense that it could manipulate, distort or influence electricity prices.

Will we make up the delay?

How far behind schedule are the plans for construction of another reactor in the Czech Republic now?

Three to four years. That is, if we proceed from the assumption that ČEZ will shut down the first unit of the Dukovany nuclear power plant in 2035 and the other three units will follow shortly thereafter.

Will it be possible to make up for this? Are you optimistic?

Work is under way, and very intensively. I, colleagues from the Ministry of Industry and other ministries, colleagues from the ČEZ Group, the Standing Committee on Nuclear Energy and its working groups are carrying out the individual steps of the National Action Plan for the Development of Nuclear Energy in the Czech Republic. At present, we are primarily working on legislative changes. This is becoming somewhat complicated, but there is still some time to approve relevant amendments to the Building Act to a reasonable extent. We are also discussing the proper interpretation of the so-called follow-up procedures to the environmental impact assessment (EIA) process. If we manage to resolve these two issues – the Building Act and the follow-up procedures – we will achieve fairly significant time savings. At least two or three years. We are also preparing transport routes for heavy and oversized components to the Dukovany and Temelín sites. We are devoting intensive attention to preparing the basis for decisions on the investment and business model, and the model for selecting the supplier of the new nuclear power plants.

The Czech nuclear industry is currently facing considerable uncertainty. Not many projects are emerging in which it could participate on a major scale – as it does, for example, today at Mochovce in Slovakia. Do you see a chance that construction of new units in the Czech Republic could provide a boost? Even setting aside doubts over whether construction will happen at all, it remains quite far away in time…

It is being considered that a contract with a supplier could be signed in 2022 or 2023. That is not such a distant date. And signing a contract would already be a strong signal that many Czech companies would have a good chance to participate in the construction of a nuclear power plant in the Czech Republic. In the meantime, these companies must seek contracts in third markets, to the extent potentially offered by each of the six or seven companies (KHNP also represents another Korean company, KEPCO – editor's note) that are now in contact with us and participating in the consultation dialogue. The aim is for Czech companies in mechanical engineering, electrical engineering and instrumentation and control systems to stay in shape. It does not necessarily have to be solely through the nuclear programme. Many components manufactured by these companies are also used in non-nuclear energy and in various industrial sectors. The Czech Republic's ambitions are, of course, greater – not merely to be a piecework subcontractor for an individual component or a single range of components. Czech companies have good prospects of supplying larger packages, especially the mechanical part of power plants. Czechs export conventional power plants abroad. There is a sufficiently strong engineering and technological base for us to be able to supply technologies, particularly for the secondary circuit of power plants.

The author of the article, who also asked the questions, works as an energy projects specialist at the HATcom agency.