Westinghouse has signed an exclusive memorandum of understanding with Czech Republic construction firm Metrostav, as part of a planned bid to sell two AP1000 reactors to Czech utility CEZ, Westinghouse announced January 30.
Westinghouse/Metrostav will join two other bidders – France’s Areva and Russia’s Atomstroyexport — in bidding for the two new reactors CEZ wants to build at Temelin.
The new reactors, Temelin-3 and -4, would join Temelin-1 and -2, two Russian VVER-320 reactors currently operating at the site.
Atomstroyexport is working with Czech engineering and construction firm Skoda on its bid.
The deadline for bids for the project that is meant to include fuel supply along with the two reactors is set for July 2.
The schedule for awarding a contract is currently set for late 2013.
According to the agreement, Westinghouse and Metrostav will work together exclusively on submittal of the Westinghouse bid to CEZ for the completion of the Temelin nuclear power station based on the AP1000. The MOU covers key aspects of the construction and project management scope for the project, Westinghouse said.
The Metrostav MOU follows similar MOUs signed earlier by Westinghouse with other Czech companies – an exclusive MOU with I&C Energo, and a non-exclusive MOU with Vitkovice, Westinghouse said.
Project financing
Westinghouse, Areva and Atomstroyexport may also be competing on what financing they can bring to the table for the estimated €8 billion project.
When the project was opened to invitations to bid last year, CEZ said the project would be bid on a full turnkey basis, including a nine-year supply of nuclear fuel.
More recently, the company’s executives have talked about bringing in investment partners.
CEZ said in an October 31 statement that its evaluation criteria for the bids had been set with 50% based on the technical project specification including safety and license criteria and “the other 50% based on the financial aspects of the bid, such as the price and commercial terms and conditions – warranty terms, terms of payment or terms of nuclear fuel supply.”
According to a study by Prague-based consultancy Candole Partners, released earlier this month, CEZ’s Temelin -3 and -4 project is not viable economically.
The report says that CEZ can not afford to finance the project. Candole Partners said CEZ is already committed to other projects exceeding the cost of the new nuclear plants and for which it already needs financing.
Furthermore, Candole Partners claim the Temelin-3 and -4 project could not break even under current and projected electricity prices. They conclude that the project is not viable without state subsidies.
CEZ spokeswoman Eva Novakova said January 30 that CEZ had not read the Candole report, but that “CEZ can fund the completion of Temelin.”
In an emailed reply, the spokeswoman said CEZ would look to protect itself and its majority shareholder, the Czech state, from undue risk.
“We’ve got calculations for all possible scenarios…We are very aware of risk,” she said. “But we are here to solve it and eliminate it as much as possible – otherwise we could be consultants,” she said.
She said CEZ wouldn’t be able to be more specific until “after we get offers from the tender participants including also the part of financing and after it is clear whether the State will participate in the risk elimination (as it is in all countries – Britain, Finland, France, etc.).”
She did not say what state support CEZ might seek, whether, for example, it would be loan guarantees to cut financing costs or state guarantees on the price of the power sold from the new reactors.
Such an approach on power price guarantees is currently being planned in the UK, where the government plans to sign contracts for difference with EDF to guarantee a price for power from the new reactors EDF wants to build at Hinkley Point C.
“There are many variants at the moment,” Novakova said. “We could be more accurate at the end of this year or more likely during the next year,” she said.
–David Stellfox