UK touts nuclear plant funding model to Central Europe

By bne IntelliNews October 23, 2014

bne -


Excitement is building that stalled nuclear power projects around Central and Eastern Europe might finally get off the ground, following a recent agreement between the UK and Brussels over state aid for the construction of the Hinkley Point C plant.

The UK is keen to trumpet its role in opening the way and it brought a gaggle of energy company executives to Prague on October 22 to tout for business. 

The EU approved the UK's financing model for its first new-build nuclear power plant in a generation on October 8. London isn't hanging about in efforts to leverage that success, and is pushing the states of CEE to follow in its footsteps. 

The majority of CEE EU member states are in the midst of elongated processes to build new nuclear capacity, much to the chagrin of neighbouring Germany and Austria. The EU's approval of the "contract for difference" funding model on the UK's Hinkley Point C offers them a potential way forward, and the nuclear lobby in the UK is keen to ride that wave to encourage the projects in the region. 

"We'd like to bring our experience in nuclear new build in the UK to assist considerable plans to build in CEE," announced Keith Parker, CEO of the Nuclear Industry Association in opening up the panel on nuclear energy at The Great Energy Summit, hosted by British government agency UK Trade & Investment (UKTI) at Prague Castle. "Several countries in Europe are looking at the UK model," he stated.

Smart money

On the panel was Petr Stulc, development director of CEZ.  The Czech state-controlled utility scrapped a tender to expand the Temelin nuclear plant in April, as the EU challenged the first Hinkley Point funding model. With the UK having adapted it to win Brussels' blessing, the smart bookies have stopped taking bets that a new competition is on the way in the Czech Republic.

It was notable that the expansion of Temelin was not mentioned once during the discussion. The Czech finance ministry has insisted to bne that it is premature to make any statement. However, Stulc suggests the matter is clearer now for CEZ. 

"How to build a market when European pricing has collapsed," he asked. "For CEZ the key question is how you go about procurement so you can sign a contract in acceptable way. We were procuring according to the public procurement law, but cancelled as we didn't have visibility on the revenue side. If EU legislation had left a grey zone it would have made new nuclear build projects very difficult."

That would have been music to the ears of the representatives of the Russian bid, including state nuclear agency Rosatom, that were in the audience. The MIR.1200 joint venture, featuring Rosatom export arm Atomstroyexport and Russian-owned Czech-based engineers Skoda JS, was believed to be leading the race for the last tender.

North and south

Tom Jones of British consultants AMEC suggested Hinkley Point could also revive the long delayed Polish plan to build the country's first nuclear plants. His company now has a contract with Poland's largest utility, state-controlled PGE, on the project that sits on the Baltic coast. "The biggest challenge, due to the size of the investment, is to make it attractive," he deadpanned, "and we've made big strides in the UK to doing that." 

Romania will also look to the west, and companies like AMEC, according to Teodor Chirica, CEO of Energonuclear, a project company of state-owned nuclear utility Nuclearelectrica are set up to work on the expansion of the Cernavoda plant. Bucharest announced China General Nuclear (CGN) has been designated as the "selected investor" for the development of units 3 and 4 on October 17, a full 12 years after work began on the project. "We need help on the process and managing EU demands regarding the contract for difference. We will look to the UK for this," he stated clearly.

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