As the Czech government discusses a timetable to build two new nuclear power plants in the Temelín area, it noted that Korea Hydro & Nuclear Power is the most favorably positioned in the competition to win the new nuclear order. With a new opportunity opening, "Team Korea," led by KHNP, has a higher chance of hitting another jackpot worth tens of trillions of won.
On the 8th (local time), Karel Havlíček, Czech deputy prime minister and Minister of the Ministry of Trade and Industry (MOTI), said in an interview with CTK that a decision is expected next year on whether to build two new reactors in the Temelín area.
The Minister said, "If we do not build two new reactors in Temelín, energy self-sufficiency will be impossible," and "Given the current energy balance, it is hard to imagine a scenario in which additional reactor construction is not approved."
If approval is granted to build two new reactors, KHNP is likely to win the order under the existing contract. Last year, Dukovany II Nuclear Power Plant (EDU II), the ordering entity for the Czech new reactor project, signed a contract with KHNP to build two reactors at Dukovany. The contract included an option granting KHNP the right of first negotiation for the project if two additional reactors are later built in the Temelín area.
The project cost for the two Dukovany reactors is about 26 trillion won. Considering inflation, the project cost for two new reactors at Temelín is likely to be higher.
The option does not guarantee KHNP additional orders. The Minister said, "We also want to receive proposals for new reactor construction in Temelín from other corporations, including France and the United States, and review the terms," adding, "There may be a party that offers better terms."
He also said the new Temelín project may not be a public tender like the Dukovany project. In 2022, the Czech government issued an international public tender notice for the new Dukovany reactor project. Before bidding, KHNP, U.S. Westinghouse, and France's EDF entered the fray and competed fiercely. In the end, KHNP beat the two companies and signed the final contract in June last year.
The nuclear industry sees a strong possibility that KHNP will also win the order for the two new Temelín reactors. Based on price and technology competitiveness, KHNP secured an option for the right of first negotiation in the existing contract. Under an intellectual property (IP) agreement with U.S. Westinghouse, the European reactor market was to be handled by Westinghouse, but the Czech Republic is not constrained by the existing agreement.
KHNP's strength is "On Time On Budget," delivering the desired outcome within the set schedule and budget. Compared with U.S. Westinghouse and France's EDF, reactor project costs are also 50%–60% cheaper.
However, a stumbling block is that the European Union (EU) Commission is examining the subsidies to be injected into the two new Dukovany reactors. The Czech government decided to offer low-interest loans to the EDU II consortium and guarantee a minimum price for electricity produced by the plant for 40 years. The Commission is investigating whether the subsidies provided by the Czech government comply with the EU's state aid rules. If it concludes there is a violation, financing for the new reactor construction could face setbacks.