KHNP starts contract negotiations for Czech reactors

Thursday, 25 July 2024

On 17 July, KHNP was announced as the winner of the Czech government's contest for at least two new reactors. The tender was originally for a binding offer for one new unit at Dukovany and non-binding offers for up to three more units - another one at Dukovany and two at Temelín. However, in February the Czech government announced it was changing the tender to binding offers for up to four new units, citing the cost savings per unit if they were not procured on a unit-by-unit basis. EDF was proposing its EPR1200 reactor, while KHNP proposed its APR1000, with both companies stressing their agreements with Czech suppliers to localise work if selected as preferred bidder.

KHNP announced it launched a negotiation response team on 22 July "to respond quickly and closely to negotiation procedures with the Czech Republic". The team held a preparatory meeting for negotiations on the contract in the Czech Republic on 24 July to discuss future contract negotiation plans and "began full-scale contract negotiations".

The aim is for the contracts for the initial unit(s) to be finalised this year and signed by the end of March 2025. The target for test operation of the first new unit is 2036 with commercial operation in 2038.

"According to the Czech government, the total project cost estimated by the Czech side amounts to around CZK200 billion (USD8.6 billion) for one unit, and around CZK400 billion for two units," KHNP noted. "The final contract value will be decided after the contract negotiations with KHNP. The total project cost calculated by the Czech government, which includes construction cost and contingency allowance, does not show the contract value with the vendor. The final contract amount may vary depending on the outcome of the contract negotiations."

KHNP President Hwang Joo-ho visited the Czech Republic on 24 and 25 July and met with Czech government officials and other key figures. On 24 July, Hwang - along with Sung Tae-yoon, the director of the presidential policy office, and Ahn Deok-geun, the minister of trade, industry and energy, who were dispatched to the Czech Republic as special envoys of the president - met with Czech Prime Minister Petr Fiala and Czech Minister of Industry Jozef Síkela to express their gratitude for the selection of KHNP as the preferred bidder. "We will do our best until the contract is signed to contribute to the Czech Republic's energy security and decarbonisation goals," Hwang said.

Hwang also met with Daniel Beneš, CEO and Chairman of nuclear operator ČEZ, telling him: "We will do our best in the negotiation process with the ordering company to construct Dukovany units 5 and 6 on time and safely."

In addition, Hwang discussed cooperation with the Czech industry. He met with Doosan Skoda Power and the Czech Power Industry Association (CPIA) to explore future cooperation plans with capable Czech companies.

"KHNP will continue to seek maximum involvement of Czech companies in the project," the company said on 17 July. "Since 2016, KHNP has already identified over 200 potential Czech suppliers and signed more than 76 MoUs with Czech companies as a basis for future cooperation. These include binding agreements."

The main turbines for the new units will be supplied by Doosan Skoda Power based on the agreement with KHNP. Through Doosan Skoda Power, KHNP also plans to source auxiliary equipment, such as the turbine and auxiliary systems, the condenser and feedwater heater, through Czech companies.

KHNP said it has actively engaged with Czech industry since 2016 and, together with its Korean partners, "has been building partnership with Czech companies through, for example, the development of localisation strategies and programmes, and the hosting of various events such as an APR1000 Supplier Symposium, technical seminars, construction forums and a Doosan partnership day".

"Cooperation with Czech companies with cutting-edge technological and scientific capabilities is not only one of our top priorities, but also an absolute necessity for the success of the completion of new nuclear units in the Czech Republic," KHNP Executive Vice President Insik Park said in May, ČT24 reported. "We are committed to building the new nuclear units with maximum involvement of Czech companies, making the most of synergies for cooperation, on time and on budget."