Czech SMR UK, Yoon Seok-yeol public procurement law violation, Korean nuclear power plant 'eliminated'

Czech SMR UK, Yoon Seok-yeol public procurement law violation, Korean nuclear power plant 'eliminated'

On the 19th, just before the summit with President Yoon Seok-yeol, the Czech Republic signed an agreement with Rolls-Royce of the UK for a small modular nuclear power plant (SMR). In his announcement of the meeting with President Yoon Seok-yeol, Czech Prime Minister Fiala stated, “We hope for public research cooperation in the areas of research and development of the latest technologies and innovative technologies,” and listed small modular nuclear power plants (SMRs, generating capacity 300,000 kW), hydrogen technology, and air transport as “areas of cooperation with Korea,” indicating Korea’s Dropped out from its initial priority negotiation status.
At the summit press conference, President Yoon publicly admitted to concealing the violation of intellectual property rights by answering a Czech reporter's question by saying, "We are negotiating," and violation of Czech public procurement law is grounds for disqualification from bidding.

Previously, France's Areva was disqualified from bidding in 2012 due to "failure to comply with public procurement law," and Korea participated in the bidding in 2015.
On the 19th, at a press conference for the summit with President Yoon, Czech President Petr Pavelvel responded to a Czech reporter’s question about the legal dispute between Korea Hydro & Nuclear Power and Westinghouse, saying, “The governments of Korea and the United States share a firm consensus on cooperation in nuclear power plants. I believe and am confident that it can be resolved well.” President Pavel immediately added, “I would like to add that until the final contract is signed, nothing is certain. It is not very likely. I believe that the issue will be resolved successfully, but of course we are considering any bad scenarios.”
The Czech Republic has selected Rolls-Royce and SMR from the UK and seven other potential technology suppliers for its small modular reactor program, World Nuclear News (WNN) reported on the 19th.

The Czech Ministry of Trade said on the 19th that the approach was based on potential suitability for deployment in the Czech Republic, and that Rolls-Royce SMR emerged as the best company with which Czech nuclear power company ČEZ would like to form a strategic partnership.
The Czech Ministry of Defense said on the 19th that “the first small modular reactor (SMR) is planned for the 2030s on a site near the existing Temelin nuclear power plant, before the new large Czech nuclear power plant planned for 2040 comes online.” WNN reported that “ČEZ is looking at other suitable sites for SMRs, including Tušimice and Dětmarovice, and studies and monitoring are underway to determine whether these are suitable nuclear sites.” The Rolls-Royce SMR selection in the Czech Republic comes as Rolls-Royce awaits whether the UK will select it as a preferred supplier for its own SMR program. It is one of five technologies currently being pursued, with two of them set to be deployed by the UK government’s agency, the Great British Nuclear Agency. Minister of Industry and Trade Jozef Síkela said of the Rolls-Royce SMR: “This technology can not only provide sufficient electricity at an affordable price, but also support our efforts to decarbonise and safely transition to clean energy sources. This cooperation is also a good opportunity for Czech industry, where our companies can become part of the global supply chain from the beginning and contribute to the development of this promising technology.”

The Czech Republic’s small SMRs are supplied by six nuclear power plants, which provide a third of their electricity: four VVER-440 units in Dukovany, which came online between 1985 and 1987, and two VVER-1000 units in Temelin, which came online in 2000 and 2002.
In July, Korea Hydro & Nuclear Power (KHNP) was named preferred bidder for up to four new nuclear power plants, with the aim of having the first unit enter commercial operation in 2038.

The Czech SMR roadmap was announced and approved last year, setting options for technology suppliers and screening various potential sites (45 in total) and investor models, and the Czech government announced that it would "supplement large-scale nuclear resources in the 2030s and 40s" and selected Rolls-Royce of the UK on the 19th and signed a contract.

The long-standing relationship between the Czech Republic and Westinghouse began in March 1993 when Westinghouse was selected to replace the entire instrumentation and control (I&C) system at the completion of Units 1 and 2 of the nuclear power plant after the separation of Czechoslovakia into the Czech Republic.
WNN said, "This is the first case of Western Digital I&C being integrated with Russian reactor technology." "In the radiation monitoring and diagnostic system, Westinghouse was to supply fuel (initial core and four reloads). The reactor was put into operation in 2000 and 2003, and the upgrade was financed by the operator, CEZ (Czech Nuclear Power), with a loan from the World Bank."

In the process of bidding for the nuclear power plant in 2010, the US Export-Import Bank in mid-2013 offered CEZ a loan for half the cost of the plant if it used Westinghouse technology, and the loan had a maturity of 25 years and was 1 percentage point higher than the US 10-year Treasury bond.
CEZ lost all three bids, saying it would “look for a strategic partner to share the risks of the project depending on the choice of reactor technology,” and in a new bid in 2014, Korea Electric Power Corporation (KEPCO) submitted its bid.
In early July 2019, the Czech government announced a resolution to “guarantee CEZ a loan” under a cheaper financing standard, stating that it would “not provide profit guarantees to project investors,” and in May 2020, it announced “a state loan covering 70% of the cost of building a new reactor.”

The Czech government's nuclear power plant loan terms are initially interest-free, and once the plant starts operating, a minimum interest rate of 2% (1% higher than the main loan at the time of repayment) is applied, so it seems that the 'interest-free principle' was applied to the 'half of the Export-Import Bank' burden included in Korea's bid proposal.
In January 2024, the Czech government requested a 'binding bid' including the construction cost of up to four reactors from France's EDF and Korea Hydro & Nuclear Power (KHNP), and in June 2024, CEZ announced that Korea's KHNP 'won' based on the 'cost' evaluation of EDF and KHNP, and in July, the Czech government announced that the KHNP bid price was CZK 200 billion per unit (USD 8.6 billion as of July 2024), and the French side criticized it as 'dumping at half price'.

South Korea is confident it can overcome any obstacles to its multi-billion dollar nuclear power plant project in the Czech Republic, President Yoon said in an interview with Reuters on Monday, despite appeals by EDF and Westinghouse over an agreement they had initiated.

Ahead of his visit to the Czech Republic, Yoon told Reuters that his visit was also to ensure that the final contract was concluded smoothly, adding that the success of the project was of the utmost importance.

“Yoon said Seoul and Washington were working to create a ‘friendly atmosphere’ among nuclear companies as part of efforts to resolve differences over intellectual property rights and promote cooperation,” Reuters reported.

The UK Department for Energy Security and Net Zero (DESNZ) announced on August 27 that it had approved Westinghouse's AP300 small modular reactor to enter the Generic Design Assessment (GDA) process, indicating that the Czech Republic's additional units 3 and 4 have already been converted to small modular reactors, thus putting a damper on the Korean-style 'large reactor construction'. See <Czech Nuclear Power Plant 'Dispute Dates', Czech Republic Adds 2 'Small' Units, August 28, 2024>

The Czech Republic, which was a nuclear powerhouse with the largest uranium mine in the former Soviet Union, shifted from a nuclear cooperation system with Russia and China to a system dependent on the US's 'half interest-free financing' after being divided, and Korea, which was the window for capitalist injection into Eastern Europe, acted as a financial support system and became a tool for drastic price discounts.

The Czech nuclear power plant tender was held in March 2010 with three bidders: Festinghouse, Russia, Skoda, and Areva from France. The bid was received in March 2012, and in October of that year, the state-run lead manager, CEZ, ruled out Areva's bid, stating that it "did not meet all legal requirements under the Czech Public Procurement Act" and that it "was disqualified because it did not meet other important criteria defined in the tender."

Areva appealed the decision, but the Anti-Monopoly Office dismissed the appeal.

In 2015, Korea Electric Power Corporation (KEPCO) participated in a new tender, starting with five bidders, including a Chinese consortium, but the Czech Republic announced that it would exclude China and Russia, and the tender was re-opened as a three-way competition between KEPCO, Westinghouse, and France's EDP. Here, Korea Hydro & Nuclear Power (KHNP), which had the lowest bid, became the preferred bidder, and Westinghouse and EDP appealed to the Czech Anti-Monopoly Office (AMO).

In the Cold War system, the Czech nuclear power plant, which was attempted as a strategy to inject capitalism into the Czech Republic under the Soviet Union, a nuclear powerhouse, was the first to be applied with the 'interest-free financing' system of the US Westinghouse and the US Treasury.

Korea intervened in the additional public offering as a strategic means of 'securing interest-free construction funds' for the Czech Republic in the nuclear support system to strengthen the US Cold War system, and Korea's utility value, which took advantage of the competition in which France was restraining, clashed.