Bloomberg News

CEZ’s Dukovany Chief Sees ‘Very Real Possibility’ of New Reactor

October 21, 2011

Oct. 21 (Bloomberg) -- CEZ AS, the Czech Republic’s largest power producer, will probably add at least one more reactor to its Dukovany nuclear power plant, director Tomas Zak said.

“There is a very real possibility that CEZ will build a new reactor at Dukovany,” Zak said in an Oct. 19 telephone interview. “The current government has a very pragmatic approach to energy security.”

State-controlled CEZ is in the process of choosing a supplier for two new reactors at the newer Temelin plant among Westinghouse Electric Co., Areva SA and a Russian-Czech group led by ZAO Atomstroyexport. The Czech government is drawing up an updated energy strategy with the aim of increasing the share of nuclear power in the country’s overall energy output to over 50 percent from the current 32 percent.

“It’s far easier to build another reactor in a locale that already exists than on green field,” the executive said. “And Dukovany has popular support. Town representatives, mayors, lawmakers representing the region are all lobbying us to build more.”

The Czech government will decide how many reactors to add to Dukovany in the next 10-15 years based on European demand for electricity, Zak said. The lifespan of the existing reactors expires around 2045.

European Pressure

The Czech Republic could face pressure from the European Union to curb its nuclear ambitions if the mood turns further against atomic energy after the recent meltdown in Fukushima, said Marek Hatlapatka, an energy analyst at Cyrrus AS brokerage.

“I don’t expect CEZ to start building until Temelin is nearly finished,” said the analyst, who advises his clients to “accumulate” CEZ shares.

The project will face problems with water supply as adding more than one reactor would exceed the capacity of the existing dam on the Jihlava river, Zak said. CEZ would have to build an underground pipeline bringing in water from another river, he said.

The Dukovany plant is also making technical improvements to increase its current output to 2,000 megawatts by the middle of 2012, Zak said. Unit 1 has been upgraded to 500 megawatts from 460 megawatts and will be restarted at the end of November. Units 3 and 4 have already been upgraded to 500 megawatts, while unit 2 will be shut down for the upgrade next February, according to the executive.

Dukovany has a potential to increase output by another 2-3 percent, Zak said. The process will take several years because of a lengthy licensing process, he said.

--Editors: Will Kennedy, Alex Devine

To contact the reporter on this story: Ladka Bauerova in Prague at lbauerova@bloomberg.net;

To contact the editor responsible for this story: Will Kennedy at wkennedy3@bloomberg.net.


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