CEZ Plans to Delay Decision on Temelin Nuclear Plant Expansion

CEZ Plans to Delay Decision on Temelin Nuclear Plant Expansion
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Τρι, 13 Αυγούστου 2013 - 13:28
Czech power company CEZ AS (BAACEZ.PR) said Tuesday it plans to delay a decision on the construction of two new reactors at its main nuclear power plant until next year or 2015 as it evaluates the project feasibility and expected demand for electricity in its home market.
Czech power company CEZ AS (BAACEZ.PR) said Tuesday it plans to delay a decision on the construction of two new reactors at its main nuclear power plant until next year or 2015 as it evaluates the project feasibility and expected demand for electricity in its home market.

"Our final decision is contingent on the government's energy strategy and certainty of an economic viability of the project," Chief Executive Daniel Benes told a news conference, confirming the company's earlier indications that it may take longer than planned to decide on the $10 billion project.

CEZ had planned to select a builder this year for the design and construction of the new reactors.

The 70%-state-owned power utility, which ranks as the Europe's second-largest electricity exporter in volume terms after its French peer Electricite de France SA (EDF.FR), is evaluating offers from Westinghouse Corp., a unit of Japan's Toshiba Corp. (6502.TO) and Russian state-owned nuclear energy holding Rosatom to double output at its Temelin nuclear plant to 4,000 megawatts by 2025.

CEZ aims to cut back generation at its traditional coal-fired plants and replace it with additional nuclear generation, while maintaining its ability to export power at current levels.

Mr. Benes said it wasn't certain if a projected increase in electricity demand in the
Czech Republic was realistic, and could be lower than expected.

Ongoing political uncertainty in the country following the government's resignation and prospects for an early general election are complicating CEZ's discussions with government officials about Temelin.

"The political situation is currently in flux," Mr. Benes said.

Owing to the uncertainty, CEZ decided against raising its full-year profit guidance for 2013, currently set at 37.5 billion koruna ($1.93 billion), despite expecting to receive a CZK2 billion boost from the sale of its coal-fired power plant at Chvaletice in the
Czech Republic .

"We want to have a safety cushion," said CEZ's Chief Financial Officer Martin Novak.

The asset sale could boost the full-year net profit to about CZK39.40 billion this year, just below CZK40.2 billion in 2012, said Josef Nemy, an analyst at the Prague-based unit of Societe Generale.

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