The Czech energy giant ČEZ cancelled a tender on two new nuclear reactors at the Temelín nuclear power plant. The deal – estimated as worth hundreds of billions of crowns – was shelved a day after the government stated it would not offer any state guarantees in the project. There were two remaining bidders in the deal, the US-based Westinghouse and Russian-led consortium MIR 1200, who have been left empty-handed.

 The problem is represented by the state guarantees. The government has just decided it was in no position to provide them at a time when electricity prices were too low and the electricity sector too turbulent. Many observers agree that it would have been a risky proposition to promise them.

That doesn’t mean nuclear power in the future won’t be an option, but certainly the government will have to go back to the drawing board to decide on how to proceed next time.

 The original tender was problematic because ČEZ is 70 percent state owned while 30 percent is owned by minority shareholders. They could have protested the deal as too risky if it had gone ahead, with too many intangibles over the next 10, 20 or 30 years.

Material From Radio Prague.