The Czech Republic is a cemetery of energy companies, a new nuclear source would give us confidence, says the General Director of ŠKODA JS

13. 11. 2019

Czech journal HOSPODÁŘSKÉ NOVINY: The indecisiveness of Czech politicians regarding the planned construction of new nuclear units is collecting a tax among power engineering companies. New nuclear reactors have been discussed for more than a decade. However, it is still unclear whether they will be built. The uncertainty and lack of orders in the industry have already resulted in bankruptcy of many manufacturers.

“A colleague from the branch recently said that the last years have been reminiscent of the cemetery of energy companies in the Czech Republic, and I agree," says Vladimír Poklop, General Director of Plzeň company ŠKODA JS in an interview for HN.”

Traditional companies such as Modřany Power or ČKD DIZ went bankrupt, as well as many companies from the Vítkovice group of the Ostrava billionaire Jan Světlík, the future of Královopolská RIA is uncertain.

CZK 151 million was last year's net profit of ŠKODA JS. Revenues were CZK 4.1 billion.

According to Mr. Poklop, this is primarily due to the lack of opportunities and new projects in the Czech Republic. Not only new nuclear reactors are not built, but neither are gas or coal power plants, which Czech engineering has largely focused on.

Loss-making project Temelín

However, the above indecisiveness of the government and the semi-state company ČEZ also plays a role. The government started a tender for the completion of two units in Temelín years ago, but in 2014 the project was stopped due to uncertain economic return.

“Not only that the tender did not help, but on the contrary it sucked the companies out. Not only financially, but their best people lost three years of their time working on the cancelled project. Just us, ŠKODA JS (not talking about the consortium with Rosatom we were in), we lost quarter of a billion Czech crowns due to the tender,” explains Poklop.

At that time, Russian Rosatom, French Areva and American Westinghouse sent bidding documentation for three complete nuclear power plants to ČEZ, having tens of thousands of pages. According to Poklop, the Czech companies lost up to a billion by participating in this project.

Today, only a few domestic companies supply nuclear power plants around the world. In addition to ŠKODA JS, these include Doosan in Plzeň, I&C Energo, ZAT and Sigma in Olomouc.

At present, these companies rather do not count on deliveries for the new nuclear unit in Dukovany, which the government has been discussing with ČEZ for the past five years, said Poklop. But if the construction of the unit were finally approved, it would give confidence and certainty to the whole sector for many years to come.

“Even if the decision is made today, the new unit would not be finished before 2035-2040. In terms of production, there would have been some impact on us in six years, but we would probably do some engineering works before,” Poklop says.

Slovakia and Ukraine

After the tender for Temelín was canceled, some companies embarked on giant contracts to supply complete power plants, which often destroyed them. ČKD had problems with the waste incineration plant in Chotíkov, Vítkovice never finished the Turkish power plant Adularya.

On the contrary, ŠKODA JS continued to focus on the production of individual equipment and engineering. Turnover has long been holding around four billion crowns, last year's net profit was 151 million crowns.

The largest share of the ŠKODA JS production make spent fuel casks for Czech and foreign power plants and supplies of equipment mainly for Russian VVER reactors.

“Currently we also produce internal parts for French EPR reactors. From the British nuclear power plant Hinkley Point we have a contract worth 300 to 400 million crowns. We also supplied these parts to the Finnish power plant Olkiluoto and to the Chinese Taishan,” adds the head of ŠKODA JS.”

At present, only about a quarter of the company 's sales are domestic, the rest are supplies abroad.

“In the Czech Republic, we make a complete service and maintenance of the primary circuit of all six units we have here. We also make modernization projects in Temelín and Dukovany, we provided power plant performance increase and supplies of some parts,” says Poklop.

In addition, the company has contracts mainly in Ukraine and Slovakia, where it supplied most of the reactor for Units 3 and 4 at Mochovce. At one time Mochovce accounted for up to 40 percent of ŠKODA JS' revenues. However, this project, directed by Italian energy company Enel, faces a long delay and more than double the budget increase.

Rosatom the saviour?

New nuclear power plants are not being built not only in the Czech Republic, but practically in the rest of Europe. In addition to the aforementioned Britain, only Hungary and Finland are currently planning new constructions, both these contracts were won by Rosatom.

“In a consortium with Rolls Royce, we are now in the shortlist to supply the instrumentation and control system for Rosatom to Hanhikivi, Finland, the I&C is virtually the brain of the whole power plant. Other Czech companies that would participate in this project are ZAT, which would supply a part of the control system, and I&C Energo,” explains Vladimír Poklop.

The company is also interested in two planned reactors in Paks, Hungary. "Rosatom, with its MIR 1200 technical project, is entering Europe for the first time and has to prove that it complies with European standards and regulations. And while some Russian manufacturers might have problems to modify production and documentation to European standards, we do have this know-how. So we think we could get some share in the contracts” says Poklop.

“We have fresh experience from Slovakia with work according to current European legislation. It is only us and the French who have these skills. And this is a great advantage,” adds the head of ŠKODA JS.

Author: Milan Bureš, Source: Hospodářské noviny