Analysts: Financing for Czech nuclear units needs to be clarified, and costs will be higher

Analysts see the European Commission’s approval of public support and binding bids from both bidders to build multiple nuclear units in Czechia as positive progress on the project. However, they warn that the project’s financing remains unclear and say the state should resolve the issue as soon as possible. They also expect the reactors to cost significantly more than current estimates. Experts contacted by the Czech News Agency (ČTK) today agreed.

EDF and KHNP submitted their binding bids by this morning to build up to four nuclear reactors in Czechia. The semi-state-owned company ČEZ, which is responsible for the nuclear tender, will now analyse the bids and submit its evaluation to the government in June. The winner of the tender and the number of nuclear units to be built in Czechia in the future are expected to be decided in the summer. The first unit is due to be completed in 2036.

„It is of course very good news that both bidders have submitted binding bids. Czechia needs to diversify its energy sources and strengthen its stable sources of supply. Having additional units in operation in Czechia before the current six units are shut down—and built by suppliers that have not yet built anything in the country—would be an appropriate form of diversification,“ said Capitalinked.

.com analyst Radim Dohnal. He also sees it as positive that the bidders accepted the request to expand their bids to cover up to four units.

Dohnal, by contrast, has a negative view of the project’s cost outlook. He expects the originally estimated price of 160 billion Kč per unit to prove inaccurate. „Including financing, I expect the cost of a single 1200 MW unit to be closer to 400 billion Kč,“ Dohnal said. He also considers the construction financing itself to be unclear. „The state will undoubtedly have to get involved, ideally by acquiring the two project companies that own suitable sites—and securing financing and a guaranteed electricity purchase price for them,“ he said.

XTB analyst Tomáš Cverna also considers approval of public support to be very important for the entire tender. „The project is in the interests of all parties involved, and especially of the Czech Republic, as a way to strengthen energy security,“ he said. He considers France’s EDF a slight favourite in the competition. „In addition to the French company’s stronger financial position, there are doubts about KHNP’s ability to complete the project in Poland. A larger tender for four units could also be more feasible under a bilateral agreement between Czechia and France, since EDF is wholly state-owned,“ Cverna noted.

In connection with the current tender, the environmental association Calla pointed out that both bidders had offered reactor technologies that have not yet been built anywhere in the world. „Judging by the price tags of the most recently built nuclear reactors, I am certain that the units offered to Czechia will cost far more than the 160 billion Kč often cited in the public debate. Since ČEZ is choosing between reactors that the world has so far seen only on paper, the risk that they will not be delivered on time and within budget is significantly higher,“ said the association’s energy consultant, Edvard Sequens.

He also noted that the project’s financing model is still unclear. „What is certain is that the new reactors will be paid for by both taxpayers and electricity consumers; the model will only determine the proportions. ČEZ would not build new reactors on a commercial basis,“ the association added.

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