The European Commission has launched an in-depth probe to examine whether the Czech government's plan to support the construction and operation of two new reactors at the Dukovany nuclear power plant complies with the European Union's state aid rules. It also put under review the financial support and power price guarantee measures that the Czech Republic introduced after Korea Hydro & Nuclear Power Co. (KHNP) signed the main contract for the Dukovany project.
The European Commission said in a statement on the 22nd local time that the Czech plan to support construction of Units 5 and 6 at the Dukovany site "may not be fully compliant," announcing the opening of a formal investigation.
In Oct., the Czech government unveiled a plan to provide low-interest loans totaling 23 billion to 30 billion euros to cover the expense of building two new reactors and to set a contract for difference guaranteeing a minimum price for generated power for 40 years. The design grants revenue stability to a nuclear plant operating consortium in which the government holds equity.
The EU explained that while public support for nuclear investments can stimulate economic activity, it will examine whether a long-term price guarantee mechanism could conflict with state aid rules in terms of the necessity and proportionality of the support.
Some observers say that if the Czech support plan is deemed to violate the rules in this in-depth probe, financing and the project timeline could face greater strain.
Separately, the EU is conducting a preliminary review of an objection filed by Électricité de France, which lost to KHNP in the Czech nuclear tender, claiming KHNP violated the EU's Foreign Subsidies Regulation.