Czech energy firm to appeal injunction halting nuclear power deal signing with S. Korea

The Czech Republic’s state-run energy company CEZ will soon appeal a court injunction preventing it from signing a multibillion-dollar nuclear power plant project with a South Korean consortium led by Korea Hydro & Nuclear Power Co. (KHNP), Chief Executive Officer (CEO) Daniel Benes said Wednesday.

His remarks came a day after a Czech regional court issued an injunction temporarily suspending finalizing the estimated 26 trillion-won (US$18.6 billion) project. The injunction followed a legal challenge from French energy company EDF, a losing bidder in the tender process.

“We will soon file an appeal and a motion to dismiss the injunction,” he told reporters at a press briefing, adding that the motion will be filed next week. “Given the importance of the case, we expect the court to make a swift decision.”

KHNP had originally planned to sign the final agreement later Wednesday with Elektrarna Dukovany II (EDU II), a CEZ subsidiary overseeing the project. However, the signing has been postponed pending a final ruling from the court.

Benes highlighted the complexity of the closed-door bidding process and noted that it is not uncommon for losing bidders to file legal complaints, in a likely reference to EDF’s series of legal challenges.

EDF and U.S.-based Westinghouse, another unsuccessful bidder, had previously filed complaints with the Czech Office for the Protection of Competition (UOHS), contesting the government’s evaluation process. In October, UOHS rejected the complaints, prompting EDF to escalate the matter to the regional court in Brno, the Czech Republic’s second-largest city, last week.

“Since it was a closed bid, we cannot disclose specific details, but KHNP’s proposal was rated the best,” Benes said. “It offered price guarantees in every respect.”

The South Korean consortium was named the preferred bidder for the construction of two 1,063-megawatt (MW) nuclear reactors at the Dukovany Nuclear Power Plant, located roughly 200 kilometers southeast of Prague.

If finalized, the project would represent South Korea’s first overseas nuclear plant contract since 2009, when another KHNP-led consortium secured a deal to build the Barakah Nuclear Power Plant in the United Arab Emirates.

He added that the tender process was conducted in accordance with legal standards and expressed confidence that the Highest Administrative Court would overturn the injunction issued by the lower court.

However, he did not specify when a final ruling could be expected.

Addressing the unexpected delay, Benes expressed regret over the situation and apologized to the South Korean side.

“On behalf of the Czech side, I would like to extend my apologies to the South Korean government delegation. It is unfortunate that the schedule had to be changed at the last minute,” he said.

The delegation led by Industry Minister Ahn Duk-geun arrived in Prague on Tuesday, and was expected to meet with the Czech prime minister later in the day.

Petr Zavodsky, CEO of EDU II, said the company respects the court’s decision but voiced skepticism about its implications.

“We have doubts … as the ruling could harm the national interest at a time when the Czech Republic is working to transform its energy strategy,” he said.

The Czech government has been pushing to reduce its reliance on fossil fuels and increase the share of nuclear energy. Nuclear power currently provides about 40 percent of the country’s electricity, and Prague aims to raise this to over 50 percent in the coming years.

The two new reactors will be built adjacent to the four existing 510-MW units at Dukovany, which have been in operation since the 1980s. The first new unit is expected to begin trial operations in 2036, with the second following approximately two years later.