Czech government approves decree allowing talks on power purchase agreement for Dukovany

The government today approved a regulation on energy security, which establishes a power purchase agreement as a form of public support for the construction of new nuclear units at Dukovany. This is according to the results of the meeting published online. Under the regulation, the state will then be able to negotiate the terms of the agreement with energy company ČEZ, including the purchase price of electricity from the new units. Czechia received European Commission approval for public support for the first reactor in the spring and is now seeking approval for the second planned unit at Dukovany.

„The form of support for the energy security of the Czech Republic, based on the Ministry of Industry and Trade's decision to grant state authorisation for the construction of an electricity generating facility under the Energy Act at a low-carbon facility at the Dukovany site, is a power purchase agreement,“ the regulation states.

It is due to take effect on 1 November. According to the explanatory memorandum to the regulation, the state should sign the power purchase agreement with ČEZ by the end of the year.

The European Commission granted the Czech Republic what is known as state aid approval for the construction of one unit at Dukovany in April. The state will provide financial assistance for the project and guarantee the power plant's revenue stability through a power purchase agreement. The government regulation mentioned above will provide for this agreement.

The government is also negotiating with the Commission to obtain approval for the second unit. It intends to base this on the first public support model. The government also wants to prepare a power purchase agreement for the second unit, but it can only be implemented once approval has been obtained.

In July, the government decided to build two new nuclear reactors at Dukovany. They are to be built by South Korean company KHNP, which won the tender in which the Czech government chose it over French company EDF. The first of the new reactors at Dukovany is expected to be completed in 2036.

At current prices, the cost of the currently preferred plan to build two reactors is 400 billion crowns. Under the government's decision, energy company ČEZ is also expected to negotiate with the Korean company over the next three to five years an option to build two more units at Temelín.