New Czech govt, CEZ might clash over Temelin price guarantees.

By bne IntelliNews October 17, 2013

The new Czech leftist government, likely to be formed after the Oct 25-26 early elections, might clash with the country’s largest energy producer CEZ regarding a plan that envisages the state to provide guarantees on the purchase price of electricity from the two new reactors that are to be built in CEZ’s Temelin nuclear power plant, Hospodarske Noviny reported.

Milan Urban, the shadow industry minister of leftist CSSD that is the clear favourite to win the elections, said that his party supports the expansion of Temelin as the project is important for securing the country’s energy independence but he cannot imagine that CSSD will back price or loan guarantees.

CEZ, majority owned by the state, wants to secure government guarantees on the electricity purchase price in order to ensure the profitability of the USD 10bn project. CEZ seeks the introduction of the British model under which the state steps in with payments if the power prices slip below the guaranteed level but CEZ will have to pay the state if prices are higher.

CEZt initially planned to select the supplier of the new reactors by end-September but uncertainties in the future state energy strategy following the collapse of the centre-right government of Petr Necas in June forced the company to postpone the deadline and now it expects to make a decision on the project at end-2014 or in 2015. US Westinghouse and a Czech-Russian consortium comprising Skoda JS, Atomstroyexport and Gidropress are bidding to build the new reactors that will double the plant's capacity to some 4,000MW.

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