July 8, 2019 / 4:29 PM / 2 months ago

Czech government approves framework plan for new nuclear plant

PRAGUE (Reuters) - The Czech government has given preliminary approval for a plan by a subsidiary of electricity producer CEZ to build a nuclear power station with the government providing guarantees to help it secure cheaper financing.

CEZ is 70 percent state-owned and has previously declined to invest in nuclear alone given high costs and unclear returns.

A decision on construction of a unit at the Dukovany site is still years away with suppliers expected to be chosen by 2024.

The plan presented by Industry and Trade Minister Karel Havlicek does not specify how to handle economic viability.

While the government is keen to build new nuclear power stations, it does not want to pick up the bill, while CEZ has insisted that any investment makes a return for its owners, including minority interests.

Havlicek said the government was ready to take responsibility for any future changes in legal and regulatory environments, and help secure cheap financing.

But it does not want to guarantee returns on investment, as the British government did with guarantees on future power prices sold by the planned Hinkley Point power plant.

“We will not go the British way of ‘contract for difference’, however we want to provide state guarantees. What they will cover is a matter of detailed discussions,” Havlicek told a news conference.

“We expect that CEZ will be the investor and CEZ will go into it with its business risk.”

CEZ said negotiations were only beginning.

“CEZ will of course proceed in a way that the result is beneficial for all shareholders,” it said in an emailed reply to a question from Reuters.

The investment into the initial unit with about 1,200 megawatt (MW) output is expected to be billions of dollars.

It should replace capacity at Dukovany whose four 500-megawatt units will start decommissioning in 2037, and help energy needs as coal-fired capacity is gradually retired.

The decision is partially geopolitical, with firms from Russia, the United States, South Korea, France and China potentially interested.

Reporting by Robert Muller and Jan Lopatka; editing by David Evans

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