Czechs Forge Ahead With Nuclear Power Expansion

New York Times

In October last year the Czech state power company, CEZ, selected three companies to bid for a contract to expand the Temelin nuclear power plant, in the southern Czech countryside. The companies are now readying themselves to submit detailed proposals that could have major consequences not just for the Czech Republic, but for the future of the nuclear industry in Europe.

CEZ is looking for offers to build not only two new reactors at Temelin, but also as many as three more at other sites that it owns. “In 2007 the decision was made to issue a tender for two nuclear reactors, plus a possible three more,” said Vaclav Bartuska, the Czech ambassador at large for energy security and government commissioner for the completion of the Temelin nuclear complex.

“This is right now the biggest tender in Europe and one of the biggest in the world.” Also, he said, “it’s unique as it is open for both east and west.”

The bidders vying for the deal, estimated to be worth 500 billion korunas, or $25 billion, are Areva, of France; a joint Russian-Czech venture, MIR-1200, in which the Czech nuclear engineering company Skoda JS is working with the Russian companies AtomStroyExport and Gidropress; and the U.S. company Westinghouse.

The processes by which public works contracts are awarded in the Czech Republic are often murky. But the government is determined this one will be different. “The tender is too big to be done the usual Czech way — it must be completely transparent,” Mr. Bartuska said.

One reason for that is the political sensitivity of the decision. “There are three major countries behind the companies,” he noted. “In the end you have to say no to two of the world’s major countries.”

The companies are now waiting for detailed tender documents from CEZ, which Mr. Bartuska said should be ready by the end of the year, a bit later than an originally scheduled September deadline.

“Both CEZ and the companies need more time,” he said. “CEZ respected this.”

The idea of a nuclear plant at Temelin was first proposed as early as 1979. By 1985, a design had been chosen, calling for four reactors to be built, and construction started in 1987. But after the 1989 Velvet Revolution, the plan was trimmed back to two reactors and alterations were made to the design, intended to raise reliability and safety to Western European standards. The first reactor finally was put into production in July 2000, and the second in 2002.

The whole program ran massively over budget and has been plagued by protests, both from inside the country and from its neighbors, causing successive Czech governments to waver repeatedly on whether to continue, or to scrap it.

Still, Temelin is now the Czech Republic’s largest power resource, and three years after the second reactor was commissioned CEZ started thinking about returning to the original plan. The two new reactors are expected to double the plant’s output.

The tender terms stipulated that only companies with previous nuclear construction experience could apply, and Mr. Bartuska said all three bidders were “very serious and have the ability,” to meet the tender requirements. But, he added, “all three also have difficulties.”

He declined to go into details, but said it remained uncertain how the competition would turn out — to the point that, in the end, there could be no winner at all. The government, he said, is looking for lower bids, and higher quality transfers of technology. “All will probably have to drop their price,” he said: “and we want nuclear know-how and know-why.”

The expansion of Temelin is not strictly necessary in terms of the country’s energy security, since the Czech Republic is already self-sufficient. But Mr. Bartuska paints it as vitally important for the economic future.

The country has a history of nuclear research going back more than 50 years — a potential resource that needs to be nurtured.

For now, “We have beer, tourism,” he said; but “what will this country live off in 20 years’ time?

“We will either be high-tech or dirt poor. Nuclear forces companies to do things they wouldn’t do. It’s cutting edge.”

Under European Union regulations, the government cannot require the bidders to use local companies. Still, said Mr. Bartuska, high local content would clearly earn any bid a more positive public reception.

The bidders would seem to have taken that on board: “I’ve heard numbers from bidders using 70 to 80 percent Czech companies,” he said.

Based on local capabilities and the interests of the foreign bidders, Mr. Bartuska dismissed that as “not realistic.” Still, the companies disagree.

“We intend to maximize to the greatest extent possible Czech content in this project,” Kerry Hanahan, Westinghouse’s project development director for the Czech Republic, said, pointing to the company’s local sourcing program, known as “Buy Where We Build.”

“In principle, Westinghouse could source up to 70 to 80 percent of the plant in the Czech Republic,” Mr. Hanahan said.

Miroslav Fiala, chief executive of Skoda JS, offered similar numbers for the MIR-1200 project. “The Consortium actively attracts local companies — their contribution to the project will be at least 70 percent of all supplies and services,” he said.

Mr. Bartuska says coal-fired power plants now generate roughly 66 percent of the country’s electricity, with 30 percent coming from nuclear and the rest from other sources. Most of the coal plants were built back in the 1950s and ’60s and are nearing the end of their life span.

That faces the government with a challenge, Marek Svitak, a spokesman for Temelin, said.

“If the Czech Republic wants to replace the gradually decommissioned coal power plants in an effective and environmentally friendly way and maintain its energy independence, the nuclear industry offers a solution now,” Mr. Svitak said. “The completion of Temelin appears to be the best alternative in the technical, safety and financial respect.”

Safety has been a past problem at Temelin. As of 1996, the International Atomic Energy Agency, the U.N. nuclear safety agency based in Vienna, had recorded more than 80 safety lapses before the first reactor even came into production. In 2001, its first year of operation, it had to be shut down in May, operated for about two weeks in August, and then was shut down again.

Politically, too, Temelin has been a frequent source of friction with Austria, where protesters have blocked border crossings and where politicians opposed to the plant sought to block the Czech bid to join the European Union.

Still, Mr. Svitak said that the plant is safe, and that safety is a constant priority.

“Although the existing operating units are safe, new designs have expanded on safety,” he said. “The most advanced and sophisticated designs of the world’s leading manufacturers are being considered for completion of Temelin.”

Mr. Hanahan said Westinghouse’s AP1000 pressurized water reactor, which it is proposing, incorporated a “passive safety system” relying on gravity and other natural forces to shut it down without human intervention in the case of an accident.

The reactor “is a completely new way of thinking about how nuclear power plants are designed, licensed, and constructed,” he said.

Mr. Fiala, for his part, also stressed the safety record of past nuclear plants built by the MIR-1200 consortium, citing in particular the Dukovany plant in Moravia, Czech Republic, which he said rated statistically among the 20 percent most reliable and safest plants in the world.

Areva did not respond to requests for comment.

How Prague decides to go forward is likely to have major consequences for the future of the whole nuclear industry, Mr. Bartuska said.

“In the Czech Republic and the West, there are major nuclear challenges for all of us,” he said. “I hope there will be a nuclear renaissance in 10 to 15 years; so far, we only have a nuclear resuscitation.”