INHALT

Commission Decision (EU) 2025/429 of 30 April 2024 on the measure State aid SA.58207 (2021/N) which Czechia is planning to implement to support the construction and operation of a new nuclear power plant at the Dukovany site (notified under document C(2024) 2858)

COMMISSION DECISION (EU) 2025/429
of 30 April 2024
on the measure State aid SA.58207 (2021/N) which Czechia is planning to implement to support the construction and operation of a new nuclear power plant at the Dukovany site
(notified under document C(2024) 2858)
(Only the English text is authentic)
(Text with EEA relevance)
1.
PROCEDURE
2.
DESCRIPTION OF THE CONTEXT
2.1.
Electricity generation in Czechia
Table 1
Evolution of electricity generation capacity in gigawatts (GW) and gross electricity generation in terawatt hours (‘TWh’) in Czechia, 2000-2022
2.2.
Objectives and background
2.3.
Alternative options for securing a low-carbon energy mix
2.4.
Alternative options on financing mechanisms for nuclear energy
3.
DETAILED DESCRIPTION OF THE MEASURES
3.1.
Modifications of the measures by Czechia following the Opening Decision
3.2.
The beneficiaries
3.2.1.
ČEZ and EDU II
3.2.2.
The SPV
3.2.3.
The selection of the beneficiary
3.3.
General description of the Project
Figure 1
Dukovany Project structure
3.4.
Preparatory works for the Project
3.5.
Technical characteristics
3.6.
Measure 1: Purchase contract (the PC)
3.6.1.
Main elements of the PC
3.6.2.
Strike Price setting for the PC
3.6.3.
Financing of the purchase contract and use of revenues from the offtake contract
3.6.4.
The power trading commitments
3.6.5.
Rate of return
3.6.5.1.
Return to equity holders
3.6.5.2.
Cost of Debt
3.6.5.3.
Overall rate of return
3.6.6.
Revenues and costs of the Project
3.6.7.
Overcompensation control
3.7.
Measure 2: State loan (the RFA)
3.8.
Measure 3: Change of Law or Policy Protection mechanism
3.9.
Legal basis and transparency
3.10.
Financing structure of the Project
3.11.
Cumulation
3.12.
Transparency
3.13.
Grounds for initiating the procedure
4.
THE POSITION OF THE CZECH GOVERNMENT
4.1.
Czechia’s position on the appropriateness of the aid
4.2.
Czechia’s position on the proportionality of the aid
4.2.1.
Duration of the support
4.2.2.
Risk of overcompensation
Figure 2
EDU II vs the Hinkley Point C gain-share mechanisms […]
4.2.3.
RoE calculated at the minimum required
Table 4
Summary risk assessment across all risk factors and comparator projects
4.3.
Czechia’s position on the selection of ČEZ
4.4.
Czechia’s position on the Project’s impact on trade and competition
4.4.1.
Potential price manipulation and withholding capacity by ČEZ
Figure 3
Difference in wholesale electricity prices in Czechia between factual and counterfactual scenarios (2030-2050)
Table 5
Market share of ČEZ in terms of installed dispatchable generation capacity (2020-2050), factual scenario
Table 6
Estimate of ČEZ’s future market share in terms of generation according to Czechia
Table 7
Share of individual fuels in gross electricity generation in Czechia
Figure 4
Net generating capacity in reference scenario for each year and technology
Figure 5
ČEZ’s pivotality using the RSI according to Czechia
4.4.2.
Role of the SPV on the market
Table 8
Commercial structure comparison between EDU II (in the Table below referred to as ‘Dukovany II’), HPC and Paks II
5.
COMMENTS FROM THIRD PARTIES
5.1.
Comments on the existence of aid
5.2.
Comments on the compatibility of the aid
5.2.1.
Comments as regards the appropriateness of the measure
5.2.2.
Comments as regards the proportionality of the measure
5.2.3.
Comments as regards the need for State intervention
5.2.4.
Comments received on the selection of ČEZ
5.2.5.
Comments received on potential undue distortions to competition and trade between Member States
5.2.6.
Comments as regards a breach of EU law
5.2.7.
Comments received as regards the security of supply
5.2.8.
Other comments raised by third parties
6.
COMMENTS FROM ČEZ
6.1.
ČEZ’s position on the appropriateness of the aid
6.2.
ČEZ’s position on certain elements of the proportionality of the aid
6.2.1.
Risk of overcompensation
6.2.2.
RoE estimation
6.3.
ČEZ’s position on its selection as Project sponsor
7.
RESPONSE OF THE CZECH REPUBLIC TO THE COMMENTS OF THIRD PARTIES
8.
ASSESSMENT OF THE MEASURE
8.1.
Existence of State aid
8.1.1.
Imputability and existence of State resources
8.1.2.
Selective economic advantage
8.1.3.
Threat of distortion of competition and effects on trade
8.1.4.
Conclusion on the existence of aid
8.2.
Lawfulness of the aid
8.3.
Compatibility of the measures with the internal market
8.3.1.
Legal basis for the assessment
8.3.2.
Positive condition: development of an economic activity
8.3.2.1.
Contribution to the development of an economic activity
8.3.2.2.
Incentive effect
8.3.2.3.
Compliance with relevant provisions of EU law
8.3.2.4.
Conclusion
8.3.3.
Negative condition: the aid cannot unduly affect trading conditions to an extent contrary to the common interest
8.3.3.1.
Identification of the market affected by the aid
8.3.3.2.
Identification of the positive effects of the aid measure
8.3.3.3.
Necessity of the State intervention
8.3.3.4.
Appropriateness
8.3.3.5.
Proportionality
8.3.3.5.1. The Purchase contract
8.3.3.5.1.1. Duration of the PC
Table 9
Load factor stabilisation time
8.3.3.5.1.2. Remuneration formula compensation
8.3.3.5.1.3. Overcompensation mechanism
8.3.3.5.2. The Initial assumptions and scenario analysis in the financial model
8.3.3.5.3. Benchmarking of the rate of return
8.3.3.5.3.1. Introduction
8.3.3.5.3.2. Assessment
8.3.3.5.3.2.1. Standalone Major Risk Premium
8.3.3.5.3.2.2. Target rate of return on equity
8.3.3.5.3.3. Estimation of the CoE
8.3.3.5.3.3.1. Conclusion
8.3.3.5.4. The selection of ČEZ as Project promoter
8.3.3.6.
Avoidance of undue negative effects on competition and trade and balancing test
8.3.3.6.1. Choice of ČEZ as Project promoter (234)
8.3.3.6.2. The electricity PC
8.3.3.6.3. Effects on market structure, potential price manipulation and withholding capacity by ČEZ
8.3.3.6.4. Role of the SPV on the market
8.3.3.6.5. Conclusion on undue negative effects on competition and trade
8.3.4.
Weighing the positive effects of the aid against the negative effects on competition and trade
8.3.5.
Conclusion on the compatibility of the aid
9.
CONCLUSION
Article 1
Article 2
ANNEX
Inputs into the financial model that are subject to changes
Post EPC tender
During the PC