EDF 'just seeking to ensure Czech project meets EU rules'

Friday, 30 May 2025

The background

The Czech Republic is planning new nuclear capacity and in July last year announced KHNP was the preferred bidder, ahead of EDF. The KHNP bid was said to be for around CZK200 billion (USD8.6 billion) per unit, if two were contracted. EDF brought a case to the Czech competition authority challenging the tender process, which was dismissed last month. That cleared the way for the planned signing of the official contracts with KHNP on 7 May. However EDF succeeded in securing a last-minute court injunction in a Czech regional court on 6 May to stop the contract being signed until its case relating to the tender process has been heard in court. Last week the project development company Elektrárna Dukovany II appealed to the Czech Supreme Administrative Court to get the injunction lifted, with KHNP also filing an appeal.

In addition to the court cases, it also emerged that Stéphane Séjourné, European Commissioner for Industrial Strategy, had written on 2 May to ask for the contract signature to be postponed because the European Commission had started a preliminary review "to assess whether potential foreign financial contributions received by the Party (KHNP) constitute foreign subsidies and, if so, whether those foreign subsidies distort the internal market with respect to the project". The Czech Ministry of Industry and Trade dismissed the request, calling it a "courtesy letter" that was not legally binding.

Following Czech-EU talks there was an agreement last week to act quickly to start consultation to "clarify all legal and technical issues related to the EPC contract". According to a Reuters report this week the signing of the final contract might now be delayed until after the Czech general election in October.

What is EDF's case?

Throughout the legal challenge the French company has largely avoided public statements about the case, but Vakis Ramany, EDF's Senior Vice President International Nuclear Development, has now given his first interview since last September, to Czech media outlets including Info.cz. In it he said that the KHNP offer price and the inclusion of a guarantee that the construction would not be delayed or become more expensive, would be "unfeasible without illegal state aid given the prices in the nuclear industry". He said EDF's case was of their rival bidder having state support which would breach European Union rules. The EDF allegation was based on "information that is publicly available, including in the Korean press, and on the basis of statements by the Czech government, in particular on 17 July last year". (which was when the result of the tender was announced).

Asked about the anger and concern in the Czech Republic caused by the legal challenge, he said: "I understand that. That is why we are trying to explain our actions. But I want to make it clear to everyone that at this moment, it is absolutely not in France's interest to prevent the construction of new nuclear reactors in the Czech Republic ... our goal is clear. To ensure that the project to be built in the Czech Republic is implemented in accordance with European regulatory rules. And that it will be beneficial for Europe, but first and foremost for the Czech Republic and its industry ... If it is proven that there is no state subsidy from South Korea, then we understand that it is in your interest to build a new Korean nuclear power plant in the Czech Republic."

On the price offered, Ramany said that the KHNP reactor has a capacity of 1000 MW and EDF's one is 1200 MW and "when we convert that to the same capacity, our offer comes out almost the same ... the difference was really minimal. I am bound by a confidentiality agreement, but the price difference was a few percent".

Asked about the lack of a guarantee against price increases and delays, he said that EDF had learned from its Olkiluoto 3, Flamanville and Hinkley Point C projects, saying it had "become clear how enormous the risks are in today's highly complex European regulation and law, and that companies cannot directly influence them. That is why I argue that no-one without state subsidies is able to fully assume these risks. Economically, it simply cannot work. I know what I'm talking about. We've been through it. And we are the only Western company currently building in Europe".

He said EDF can guarantee the technology it supplies, the EPR reactor, and full support for the licensing process and it 100% guarantees the time and price of that work. It also guarantees the procurement. Together these account for more than 50% of the total price, he says. But he adds that they cannot have full control of construction as "this is where Czech and European laws and regulations come into play, which open up enormous possibilities for various obstructions and delays".  "How can we guarantee how quickly the Czech authorities will decide on all the necessary construction permits? How can we influence who appeals against it and how? How quickly will the courts decide? Bear in mind that this will be the first nuclear reactor to be built here in 25 years. None of those who will be making the decisions have any recent experience with licensing nuclear reactors," he says.

On the issue of localisation of work, he says that EDF's bid guaranteed 40% of the total contract for Czech companies which could increase to 60% and "if four units were to be built, Czech companies would receive contracts worth CZK350 billion". He said their bid also "includes a share for Czech suppliers in other contracts in Europe" and "with 16 European projects under consideration in France and other countries, that would be CZK750 billion".

What have the Czech side, and KHNP said?

When the contract was announced in July last year KHNP's CEO Jooho Whang said: "I believe the primary reason the Czech government selected KHNP as the preferred bidder is because they recognised KHNP’s excellence in project management and construction capabilities, demonstrated by construction of 36 Korean nuclear reactors at home and abroad. Following KHNP’s successful project in the UAE, I expect that KHNP will play a pivotal role not only for Korea but globally in achieving energy security and carbon neutrality by constructing Korean nuclear reactors in the Czech Republic."

Also on that day, Czech Minister of Industry and Trade Jozef Síkela said "it is clear that the preferred bidder offered a better price and more reliable guarantees of cost control, as well as the schedule of the entire project".

In a fresh statement to World Nuclear News KHNP says it "affirms that it has participated in the Czech new nuclear power plant project in strict compliance with all international regulations, including those of the European Union. We emphasise that we have not received any subsidies that could damage or distort fair competition in relation to the project".

It describes EDF’s allegations as "groundless" and calls them "an attempt to undermine fair competition" and says "such actions risk compromising not only the Dukovany Project, but also the broader goals of energy security in the Czech Republic and across Europe" and it hopes the claims "will not cause additional confusion and delay in the project, and that the Czech new nuclear build will move forward in a timely manner".

The Dukovany II Power Plant (EDU II) project company is seeking to lift the court injunction and it said earlier this month that the tender for the supplier of the new nuclear units "was carried out in all phases in a fully transparent manner and under fair conditions". In a 12 May statement it added: "EDF is at the same time challenging the Foreign Subsidies Regulation. EDF is concerned that the Korean side has given such favourable terms that they cannot be true. We consider this to be speculation by the unsuccessful bidder - the tender participants do not and must not have any information about the content of other bids except their own."

A statement published by the Czech Ministry of Industry and Trade on 14 May said Vlček had promised "all necessary cooperation" with the European Commission and also said that, "according to the expert opinion of the Ministry of Industry and Trade, the EPC contract with the company KHNP was not subject to the Regulation on Foreign Subsidies. This was due to both the nature of the contract itself and the fact that the tender procedure had been initiated before the effective date of this Regulation".

Nuclear power in the Czech Republic

The Czech Republic currently gets about one-third of its electricity from the four VVER-440 units at Dukovany, which began operating between 1985 and 1987, and the two VVER-1000 units in operation at Temelín, which came into operation in 2000 and 2002.