Czech government excludes Westinghouse from ongoing nuclear plant tender

The Czech government announced Jan. 31 that it had excluded Westinghouse from the ongoing tender to build one nuclear power reactor of up to 1,200 MW, with options for a further three units, at power company CEZ's Dukovany site.

"Westinghouse did not fulfill the required [tender] conditions," the government said in a statement without giving further details.

The US-based nuclear vendor, which had teamed up with construction company Bechtel for the Czech tender, did not respond immediately to requests for comment about the decision.

The government also announced it is amending the ongoing tender with the remaining bidders, Korea Hydro and Nuclear Power (KHNP) and Electricite de France (EDF). KHNP and EDF will now be asked to make firm bids by mid-April for up to four new reactors in total to be built at CEZ's Dukovany and Temelin plant sites, the government said. CEZ will send its evaluation of the tenders to the government by the end of May.

"During the tender, which included non-binding options, it was shown that construction of more units, that is up to four reactors in one package, over a period of time would be significantly more advantageous than we expected, with the cost up to 25% lower per reactor," the government said. On the basis of the new bids, the government will decide how many reactors will be built, it added.

Minister for Industry and Trade Jozef Sikela added during a government press conference Jan. 31 that construction of more reactors could be expected to "optimize" the construction process and also offer the chance of a greater share of the overall work and contracts being placed with Czech companies.

Construction work on the first new Dukovany reactor was expected under the initial tender to start in 2029, with the reactor being ready for operation in 2035. The timing of construction and location of follow up reactors was an ongoing question.

During the press conference, Sikela said that problem with Westinghouse's bid was that it was "not binding" and therefore could not be compared with those from the other two vendors. The Czech government expected a turnkey reactor at the end of the process and Westinghouse-Bechtel's offer did not, for example, include penalties for failing to meet deadlines or other guarantees that the Czech government was seeking, he added.

Competitive offers received

Sikela added that the final government decision over the tender winner should now be made at the end of June. He described the existing offers from KHNP and EDF as "very competitive and transparent." "The offers are so good that we can envisage building four reactors," Sikela said. No members of the Czech government would comment on likely reactor construction costs.

Czech Minister of Finance Zbynek Stanjura said during the press conference that the government will also seek to draw up a new financing model for constructing more than one reactor.

The current agreement with power company CEZ offers the company low-interest state loans to help cover construction costs. The state will also offer CEZ a long-term power purchase agreement to buy all the electricity produced by the new nuclear reactor. "It's clear that we cannot use the current economic model multiplied four times for up to four new reactors," Stanjura said. A government working group is expected to report back by the end of the year with recommendations on how to pay for more reactors, he added.

The current Czech financing model for one reactor is subject to an ongoing investigation by the European Commission's competition authorities. They initially signaled that they had problems with the length of the long-term power purchase agreement between the state and CEZ, up to 60 years. The Brussels probe also questioned whether the state, which owns around 70% of CEZ, had not tried to offer other companies apart from CEZ similar terms for constructing and operating a nuclear reactor.

Expected surge in demand cited

Sikela pointed out that the Czech Republic needs more power capacity because of an expected surge in electricity use and the need to replace existing coal-fired power plant capacity. "In 2022, the Czech Republic consumed 60 TWh of power. We expect that will increase by 21% by 2035. By 2050, consumption will be around 100 TWh according to our estimates, an increase of 66%," he added.

Although CEZ managers had said studies showed that building two reactors in close succession at the same site would result in cost savings thanks to synergies, that was found to be not possible at Dukovany because of a lack of cooling water if the current 510-MW VVER-440/213 units continued to operate.

The four existing Dukovany units started operation between 1985 and 1987 with CEZ expecting them to function for at least 60 years.