bne -

As it mulls a new tender for the expansion of the Temelin nuclear plant, the Czech Republic is closely watching the UK's efforts to secure a green light from the EU for its model of financial support for the Hinkley Point plant, a finance ministry spokeswoman said on September 24.

Prague, which has made it clear that it hopes to resurrect the tender process for the €10bn expansion of Temelin in the near future, got a boost on September 22 when London agreed terms with Brussels for  public funding for its first new nuclear plant for a generation. The European Commission's challenge to the funding of Hinkley Point C was seen as a key element in the Czech government's announcement that it would not offer state-owned CEZ pricing guarantees on the power produced at Temelin.

CEZ, having struggled throughout to win pledges of public support, promptly dropped the tender, which had been fraught by controversy over the exclusion of France's Areva. Analysts welcomed the news, having complained for years that the project was economically unfeasible and would stretch CEZ's finances unreasonably. 

However, the very same figures that helped kill the previous competition - President Milos Zeman, powerful Finance Minister Andrej Babis, who has since effectively taken control of the CEZ board, and Minister of Industry and Trade Jan Mladek - were back within six months calling for the scheme to be resurrected. While apparently ruling out Russian state nuclear agency Rosatom - one of the two finalists in the abandoned tender - the Czech government says South Korean and Chinese companies have indicated that they intend to bid in the next hunt for a contractor. 

After weeks of talks with London, EU competition authorities are now happy the revised deal meets EU rules on state support and will propose the project is approved before the end of this European Commission’s mandate in November, reports the Financial Times. The UK has proposed under an investment contract that it pay French operator EDF £92.50 (€118) per megawatt-hour over the next 35 years - double the current market rate - which would raise government funding of Hinkley Point to £17.6bn in public guarantees.

A ministry of industry and trade spokeswoman, Helena Petrikova, told bne that it is too early to take any encouragement from the deal. "Even if the UK receives an affirmative opinion … for the construction of the Hinkley Point C nuclear power station, it is necessary that such possible affirmative opinion is confirmed by the EC as a whole. A decision … cannot be anticipated at this point," she said via email.

However, others  believe Brussels is well on the way to giving a thumbs up, and are worrying about what that could mean for Central Europe. The nuclear ambitions of the Visegrad Four, all of which are working on plans to increase nuclear capacity, are irking neighbors that have rejected nuclear power since the Fukushima disaster in Japan. With Temelin on its doorstep, Austria has bitterly fought the plant for years; Environment Minister Andrae Rupprechter said on September 24 that Vienna will take legal action against the EU if the competition authorities give Hinkley Point the green light.