Czech power utility CEZ is postponing the construction of two new units at its Temelin nuclear power plant, maybe for several years, creating a long delay in one of the world's biggest energy tenders. CEZ originally planned that the two new units would start producing electricity in 2020.
There are several reasons for the delay but the main one is uncertainty in the energy market caused by the financial crisis. CEZ is not sure whether demand for electricity after the year 2020 will be strong enough for the output of the new units to be sold profitably, Also, the postponement fits into CEZ's new investment strategy. The company has started to hoard cash and as a result has cancelled a number of investments and is reassessing some others.
CEZ, whose profits in recent years have been limited by rising electricity prices, points to an electricity price 15% below 2008's high with no prospect of a turnaround. Its reduction progamme started last year with a plan to cut investments until the year 2015 by nearly CZK 100 billion. CEZ is working on further savings and the postponement of spending on Temelin seems to be a ready and appropriate solution.
Princiapal bidders in the tender are French firm Areva, the consortium Westinghouse Electric Company with Westinghouse Electric Czech Republic, and Russian-Czech consortium Skoda JS, Atomstrojexport and Gidropress.
Temelin is the youngest European nuclear power plant currently in operation. The decision on its location was made in 1981. The original project had four units, the first staarting up in October 2002 and the second in December 2002. Construction of the two units cost CZK 98.6 billion.
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