InduMin to draft state guarantees for Temelín

Prague, Jan 29 (CTK) - The Industry and Trade Ministry has been tasked with drawing up a concrete form of state guarantees for the new units to be built in nuclear plant Temelin, deputy minister Pavel Solc told Internet daily Insider.

The guarantees that power company CEZ demands from the state are to secure it sufficiently high purchasing price of electricity.

The mechanism of the guarantees is only beginning to emerge but its principle has already been approved by the government, the daily noted.

"Full agreement on the issue has been found. The government gave us the task to prepare the guarantee mechanism and proposals for relevant legislative changes," Solc said.

However, it is not yet clear whether the guarantee would be fully paid by consumers in their prices as is the case by the renewable energy sources or the state would cover the potential difference from the state budget, the daily remarked.

The government also has to wait for the EC's stance which should be known in the summer, Solc said. "If the government decides that passing of the guarantee is necessary, it will approve the proposed mechanism," he added.

CEZ is of the opinion that the purchasing price of electricity should be guaranteed for a certain period of time after the new units in Temelin start generating power.

"If the market price was higher than the purchasing price, we would be sending back the difference. If it was lower, we would be getting the difference in our favour," CEZ board deputy chairman and CFO Martin Novak told CTK last week.

According to CEZ's calculations, the guaranteed price for Temelin would be only a fraction of how much the state pays in support to renewable energy sources.

Novak also told CTK that the tender for Temelin's completion was in line with the schedule and CEZ was not considering its cancellation. The current low prices of electricity on energy exchanges are also posing no threat to the process, he added.

The construction of the units three and four at Temelin should more than double the capacity of the south Bohemian facility from the current 2,000 megawatts.

Bidders for the project whose price is estimated at between Kc200bn and Kc300bn are Czech-Russian consortium Skoda JS, Atomstroyexport and Gidropress, US-Japanese company Westinghouse and France's Areva. Areva was, however, disqualified from the tender by CEZ last October. It filed an appeal to antitrust office UOHS.

CEZ plans to pick the winner this year. The project is to be completed in 2025 at the latest and the power plant is to work for 60 years.