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UNCLAS SECTION 01 OF 02 PRAGUE 000789 
 
SENSITIVE 
SIPDIS 
 
E.O. 12958: N/A 
TAGS: ENRG TRGY BEXP BTIO EZ
SUBJECT: OVERVIEW OF CZECH NUCLEAR PROGRAM 
 
REF: SECSTATE 127468 
 
(U)  This message is sensitive but unclassified.  Please 
treat accordingly. 
 
¶1. (SBU) Summary:  The Czech nuclear industry sector offers 
significant opportunities for U.S. business, especially if a 
possible tender for the construction of two (possibly four) 
new reactors goes forward.  Currently, the Czech Republic's 
two commercial nuclear power stations account for 30 percent 
of Czech electricity production (domestic coal accounts for 
64 percent).  The majority of ordinary Czechs and Czech 
political parties support expanding nuclear power as a way to 
meet the country's growing energy needs.  The semi-state 
electricity company CEZ would like to build new units at its 
nuclear power plants in Temelin (and possibly Dukovany) and 
has initiated an environmental impact study.  The Green 
Party, however. is using its position within the government 
to block (at least for the moment) any expansion of nuclear 
power within the country.  Should a tender go forward, likely 
competitors include Westinghouse, Areva, Mitsubishi and 
Atomenergoprom.  End Summary. 
 
¶2. (U) The Czech Republic currently has two commercial 
nuclear power stations, both owned and operated by the 
semi-state electricity company CEZ (which is 60 percent 
government-owned).  Dukovany which is located in southern 
Moravia, came on line in 1985.  It consists of four VVER 440 
pressurized water reactors.  In 2007, it produced 13,907,143 
MWh of electricity.  Temelin, which is in southern Bohemia, 
started production in 2002.  It was designed for four units, 
but currently consists of only two VVER 1000 pressurized 
water reactors.  It produced 12,264,913 MWh in 2007.  While 
the two nuclear power stations account for only 21 percent of 
the Czech Republic,s installed capacity, they account for 30 
percent of Czech electricity generation (64 percent comes 
from coal).  The Czech Republic also has two research 
reactors and mines about 300 tons of Uranium cake a year 
(after processing abroad, this uranium satisfies a 
significant portion of Dukovany's fuel needs).  Currently, 
the Russian company TVEL supplies the nuclear fuel for 
Dukovany, while Westinghouse supplies Temelin.  Starting in 
2010, TVEL will supply both nuclear power stations with fuel. 
 
¶3.  (SBU) With the notable exception of the Green party, 
there is wide-spread consensus that the expansion of nuclear 
power is critical to meeting future Czech energy needs.  The 
Green Party, which is a junior partner in the ruling 
government coalition, is the notable exception and strongly 
opposes expanding nuclear power.  As a result, the coalition 
agreement includes a clause that prohibits the government 
from approving the construction of new nuclear reactors. 
 
¶4.  (SBU) Demand for electricity is steadily increasing, 
while several coal power plants are nearing the end of their 
production life.  Environmental limits on coal mining and new 
EU emission trading requirements make coal-fired power plants 
less commercially attractive.  While new natural gas-fired 
power plants are planned, many Czechs are reluctant to 
further increase the country's dependence on foreign 
suppliers (currently the Czech Republic gets 70 percent of 
its gas from Russia and 30 percent from Norway).  As a 
result, polls consistently show strong public support for 
nuclear power, and most political parties support increasing 
nuclear production. 
 
¶5.  (SBU) CEZ continues to view expansion of nuclear power as 
an integral element in its long-term plans.  A CEZ 
feasibility study showed that Temelin was the most promising 
site for future expansion, as it was originally planned for 
four units.  Consequently, much of the infrastructure for two 
additional units already exists.  In July 2008, CEZ initiated 
an environmental impact assessment with the Ministry of 
Environment on building an additional two units at Temelin. 
CEZ,s submission outlined several different possible reactor 
types and sizes.  The assessment is expected to last 
approximately two years.   CEZ has stated publicly that it 
would like to have the new units in operation by 2020.  It 
may be difficult for CEZ to go forward with tenders for the 
construction of the units in the near term, given the Green 
Party,s opposition to expanding nuclear power and the 
state,s majority stake in CEZ.  Should a tender be released, 
Westinghouse, Areva, Mitsubishi and Atomenergoprom are 
expected to be the main competitors. 
 
¶6.  (U) Any construction of new nuclear power stations or 
units is likely to involve CEZ.  The state would be unlikely 
to provide any tax breaks or subsidies for new nuclear power 
stations.  CEZ would most likely seek financing from 
 
PRAGUE 00000789  002 OF 002 
 
 
international investment banks and consortia. 
 
¶7.  (U) The Czech Republic possesses a strong manufacturing 
and construction base.  Several domestic firms are involved 
in the production of nuclear-related products and services. 
Consequently, the majority of components and services for any 
new plants/units could be supplied locally.  Major Czech 
firms involved in nuclear products and services include CEZ, 
Skoda Power (a manufacturer of power turbines), Vitkovice (a 
manufacturer of boilers, and Skoda Nuclear Engineering (aka 
Skoda JS, a member of the Russian-owned OMZ group.) 
 
¶8.  (U) Similarly, the Czech Republic has a relatively strong 
nuclear and engineering workforce, many of whom have 
extensive experience with Russian civil nuclear technology. 
The Czech Technical University in Prague has a Faculty of 
Nuclear Sciences and Physical Engineering with a small 
nuclear reactor department with its own research reactor. 
Several universities offer strong engineering degrees.  There 
is also a Nuclear Research Institute in Rez (of which CEZ is 
the majority-owner).  We do not anticipate that expansion of 
civil nuclear power would require a significant foreign 
workforce. 
 
¶9.  (U) The State Office of Nuclear Safety (SONS) regulates 
the nuclear sector.  It is a government agency and reports 
directly to the Prime Minister,s Office.  It is independent 
of the Ministry of Industry and Trade, the main agency 
promoting nuclear power in the Czech Republic.  It also 
independent of the Ministry of Finance which together with 
the Ministry of Industry and Trade controls the State,s 60 
percent stake in CEZ (which operates the country,s two 
commercial reactors).  SONS employs around 200 people.  We 
are unaware of any plans to expand SONS's workforce in the 
near term, although this may change if plans to expand 
nuclear production go forward. 
 
¶10. (U) The Czech Republic does not have a separate liability 
law.  Liability issues are included, however, in Chapter Five 
(sections 32 to 38) of ACT No. 18/1997 (as amended) on 
Peaceful Utilization of Nuclear Energy and Ionising Radiation 
(the Atomic Act).  This act is available in English at 
www.sujb.cz /docs/sujb  CR-Atomic  Act.pdf.  The Czech 
Republic is a party to the Vienna Convention on Civil 
Liability for Nuclear Damage. 
Thompson-Jones