Survey: What is the optimal Czech energy mix, and does it include nuclear power? (2/4)

In cooperation with students of Security and Strategic Studies at Masaryk University, we interviewed 4 figures from different areas of the Czech energy sector. In this series of views on the future of Czech energy, we present their perspectives on the optimal Czech energy balance in the coming years and their views on the construction of new nuclear capacity.

The second respondent whose views we are publishing is Jan Veselý.

First of all, it is necessary to define who “we” are. Given the context, I will assume that “we” means the Czech Republic. There is also a problem with the question in that it mixes up energy and electricity. So, regarding electricity: in my view, the Czech balance is irrelevant and there is no point in planning it. The reason is that I think the balance should emerge as naturally as possible. If the objective is the best possible price and availability of service for customers, the best way to achieve this is through market mechanisms that maximise competition and market access. Whether the most advantageous option is wind power from the North Sea, solar PV from southern Europe, rooftop solar PV at the point of consumption, SMRs or anything else should be decided by those whose livelihoods depend on it and who are putting their own money into it.

In the long-term perspective, I expect the Czech Republic to have a balanced position from spring to autumn and to import large amounts of electricity in the winter months. I would be very surprised if it were otherwise. But these are only my estimates.

First and foremost, strengthen interconnections between transmission systems and neighbouring countries as much as possible. Simplify and standardise permitting and administrative processes, provide loan guarantees, ensure a transparent and predictable legal environment and administration of justice, and stop pretending to engage in central planning. What should be centrally planned, on the other hand, is the response to emergency situations. The state should own or have under contract sufficient generation capacity at points of consumption; that is, backup sources should be available near, or ideally directly within, population centres. The grid is always the first thing to fail. And I would point out that the areas around Třebíč and Týn nad Vltavou are not Czech population centres.

The risks are clear: both countries are geopolitical rivals of the EU, and both have long-standing problems with self-deception and the quality of their products. There is a risk that the leaders of those countries would use the construction project as political leverage against the Czech government. Russia did this to Turkey several years ago.

I consider it economically nonsensical; it would be a real surprise if completing nuclear units in the Czech Republic did not end in an expensive fiasco. The supplier is irrelevant to me. What matters to me is that the Czech Republic should not give ČEZ a blank cheque for construction. That is moral hazard and a route to trouble. If construction is to go ahead, it is reasonable to provide some loan guarantees and conclude PPAs (Power Purchase Agreements, i.e. electricity purchase agreements) or CfDs (contracts for difference, creating an agreement between two parties on price movements) for delivered electricity, but no castles in the air.

Demonstrably building nuclear reactors so that they are completed properly, on time and on budget, at a cost of 3-4 USD/W or less. Without this, nuclear power has no future.