CEZ eyes nuclear following Hinkley CFD approval

• 9 years ago (2014-10-01)
• Junior Isles

Europe 1061 Nuclear 640 Renewables 752

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Daniel Benes, Chairman and Chief Executive of Czech utility CEZ AS, has said that Brussels’ approval of the contract for difference (CFD) at the planned Hinkley Point C nuclear power plant in the UK “without question” establishes a European-wide precedent that could make other envisaged nuclear power projects profitable.

CEZ would like to build new nuclear capacity but earlier this year cancelled plans due to uncertainty over profitability when the Czech government was wary of committing to a price guarantee plan that had not received the EU’s blessing.

The CFD guarantees a minimum sale price for power produced from low carbon power plants. If the British price guarantee plan takes root elsewhere in Europe, the Czechs will restart its efforts to build new nuclear capacity, he said.

He said that subsidies on solar and wind power in Europe have contributed to falling wholesale prices down, noting that a €1 fall in the wholesale price of electricity reduces CEZ’s operating profit by about 1.5 billion koruna ($68.7 million). As a result, CEZ has been forced to cut operating costs by up to 27 per cent, he said.

The company says it will reduce headcount and focus on bolstering output at its existing low-cost coal and nuclear generators to maintain profitability.