Dukovany Will Cost Far More Than the Government Admits, Energy Experts Warn

The Czech government's officially stated price tag of 400 billion crowns for building new reactor units at the Dukovany nuclear plant covers only the contract with South Korea's KHNP and does not include the cost of financing the project, independent energy and economic experts say. According to their estimates, the real cost of the project could reach a trillion crowns — or more.

Analyst and major minority shareholder of energy company ČEZ, Michal Šnobr, drawing on the experience of other nuclear plant construction projects in Europe, calls an estimate of 1,000 billion crowns optimistic, admitting he "would be glad if the final sum stayed below 1.5 trillion." Other industry experts — Jiří Gavor, Pavel Grünfeld and Jiří Tylecek — offer similarly grim projections. All agree that a final price tag below a trillion crowns is all but out of the question.

Why the Budget Keeps Growing

The APR 1000 reactor type chosen for Dukovany has never been built anywhere in the world. It's based on the more proven APR 1400 model (roughly ten completed projects), but has been substantially modified in key respects. Experience shows that reactors built for the first time of their kind almost always end up costing more and taking longer than planned. This will also be KHNP's first project in Europe, meaning the company will have to build its network of subcontractors from scratch — another likely source of delays.

Construction delays automatically drive up costs because of rising interest on the loans financing the project — the longer the plant takes to build, the more interest accrues, since it starts generating revenue later.

The Contract With the Koreans Remains Secret

Despite the enormous sums of public money involved, the project's documentation is almost entirely classified: neither the tender documentation, nor the bids submitted by participants, nor the contract with KHNP itself have been published. Only the broad outlines of the deal are known.

By comparison, in the United Kingdom, during the construction of the Hinkley Point C nuclear plant, the government fully disclosed the project's financial model — a lengthy contract detailing the electricity pricing mechanism — even though the plant itself is neither owned nor built by the state. In Czechia, the equivalent financial section of the project is kept entirely under wraps.

How Much Will Consumers Pay

The previous government promised that electricity from the new units would cost no more than 90 euros per MWh (roughly 2.20 crowns per kWh) — a figure based on the original 407-billion-crown budget. If construction costs reach 1,000 billion crowns, the price could climb to 220 euros per MWh, and at 1,500 billion crowns, to 330 euros. Šnobr calls the promised 90 euros a "pipe dream" and predicts the real price will land somewhere in the hundreds of euros per MWh.

For comparison, renewable energy sources — such as offshore wind — are already being sold at tender for as little as 55 euros per MWh, with prices trending downward, while solar power paired with short-term storage goes for 53 euros. Wholesale electricity prices over the coming decades are projected to range between 50 and 80 euros per MWh.

Rough calculations suggest the two new reactor units will produce about 15 million MWh a year. Even with a "modest" gap of 100 euros per MWh compared to market prices, the annual overpayment would amount to roughly 40 billion crowns — about 4,000 crowns per resident of the country — with worse-case scenarios running two to three times higher. That money will ultimately be paid either by consumers through their electricity bills or by the state from the budget — meaning, either way, by citizens themselves, just from a different pocket.

A similar pattern is playing out at other nuclear plants across Europe: electricity from Hinkley Point C is projected to cost around 150 euros per MWh, and from France's Flamanville plant, about 130 euros — even though construction there isn't finished yet, and recent inflation has already pushed costs up by nearly a third.

Source: ekolist.cz