Commission Decision (EU) 2025/429 of 30 April 2024 on the measure State aid SA.58... (32025D0429)
Commission Decision (EU) 2025/429 of 30 April 2024 on the measure State aid SA.58207 (2021/N) which Czechia is planning to implement to support the construction and operation of a new nuclear power plant at the Dukovany site (notified under document C(2024) 2858)
- COMMISSION DECISION (EU) 2025/429
- of 30 April 2024
- on the measure State aid SA.58207 (2021/N) which Czechia is planning to implement to support the construction and operation of a new nuclear power plant at the Dukovany site
- (notified under document C(2024) 2858)
- (Only the English text is authentic)
- (Text with EEA relevance)
- 1.
- PROCEDURE
- 2.
- DESCRIPTION OF THE CONTEXT
- 2.1.
- Electricity generation in Czechia
- Table 1
- Evolution of electricity generation capacity in gigawatts (GW) and gross electricity generation in terawatt hours (‘TWh’) in Czechia, 2000-2022
- 2.2.
- Objectives and background
- 2.3.
- Alternative options for securing a low-carbon energy mix
- 2.4.
- Alternative options on financing mechanisms for nuclear energy
- 3.
- DETAILED DESCRIPTION OF THE MEASURES
- 3.1.
- Modifications of the measures by Czechia following the Opening Decision
- 3.2.
- The beneficiaries
- 3.2.1.
- ČEZ and EDU II
- 3.2.2.
- The SPV
- 3.2.3.
- The selection of the beneficiary
- 3.3.
- General description of the Project
- Figure 1
- Dukovany Project structure
- 3.4.
- Preparatory works for the Project
- 3.5.
- Technical characteristics
- 3.6.
- Measure 1: Purchase contract (the PC)
- 3.6.1.
- Main elements of the PC
- 3.6.2.
- Strike Price setting for the PC
- 3.6.3.
- Financing of the purchase contract and use of revenues from the offtake contract
- 3.6.4.
- The power trading commitments
- 3.6.5.
- Rate of return
- 3.6.5.1.
- Return to equity holders
- 3.6.5.2.
- Cost of Debt
- 3.6.5.3.
- Overall rate of return
- 3.6.6.
- Revenues and costs of the Project
- 3.6.7.
- Overcompensation control
- 3.7.
- Measure 2: State loan (the RFA)
- 3.8.
- Measure 3: Change of Law or Policy Protection mechanism
- 3.9.
- Legal basis and transparency
- 3.10.
- Financing structure of the Project
- 3.11.
- Cumulation
- 3.12.
- Transparency
- 3.13.
- Grounds for initiating the procedure
- 4.
- THE POSITION OF THE CZECH GOVERNMENT
- 4.1.
- Czechia’s position on the appropriateness of the aid
- 4.2.
- Czechia’s position on the proportionality of the aid
- 4.2.1.
- Duration of the support
- 4.2.2.
- Risk of overcompensation
- Figure 2
- EDU II vs the Hinkley Point C gain-share mechanisms […]
- 4.2.3.
- RoE calculated at the minimum required
- Table 4
- Summary risk assessment across all risk factors and comparator projects
- 4.3.
- Czechia’s position on the selection of ČEZ
- 4.4.
- Czechia’s position on the Project’s impact on trade and competition
- 4.4.1.
- Potential price manipulation and withholding capacity by ČEZ
- Figure 3
- Difference in wholesale electricity prices in Czechia between factual and counterfactual scenarios (2030-2050)
- Table 5
- Market share of ČEZ in terms of installed dispatchable generation capacity (2020-2050), factual scenario
- Table 6
- Estimate of ČEZ’s future market share in terms of generation according to Czechia
- Table 7
- Share of individual fuels in gross electricity generation in Czechia
- Figure 4
- Net generating capacity in reference scenario for each year and technology
- Figure 5
- ČEZ’s pivotality using the RSI according to Czechia
- 4.4.2.
- Role of the SPV on the market
- Table 8
- Commercial structure comparison between EDU II (in the Table below referred to as ‘Dukovany II’), HPC and Paks II
- 5.
- COMMENTS FROM THIRD PARTIES
- 5.1.
- Comments on the existence of aid
- 5.2.
- Comments on the compatibility of the aid
- 5.2.1.
- Comments as regards the appropriateness of the measure
- 5.2.2.
- Comments as regards the proportionality of the measure
- 5.2.3.
- Comments as regards the need for State intervention
- 5.2.4.
- Comments received on the selection of ČEZ
- 5.2.5.
- Comments received on potential undue distortions to competition and trade between Member States
- 5.2.6.
- Comments as regards a breach of EU law
- 5.2.7.
- Comments received as regards the security of supply
- 5.2.8.
- Other comments raised by third parties
- 6.
- COMMENTS FROM ČEZ
- 6.1.
- ČEZ’s position on the appropriateness of the aid
- 6.2.
- ČEZ’s position on certain elements of the proportionality of the aid
- 6.2.1.
- Risk of overcompensation
- 6.2.2.
- RoE estimation
- 6.3.
- ČEZ’s position on its selection as Project sponsor
- 7.
- RESPONSE OF THE CZECH REPUBLIC TO THE COMMENTS OF THIRD PARTIES
- 8.
- ASSESSMENT OF THE MEASURE
- 8.1.
- Existence of State aid
- 8.1.1.
- Imputability and existence of State resources
- 8.1.2.
- Selective economic advantage
- 8.1.3.
- Threat of distortion of competition and effects on trade
- 8.1.4.
- Conclusion on the existence of aid
- 8.2.
- Lawfulness of the aid
- 8.3.
- Compatibility of the measures with the internal market
- 8.3.1.
- Legal basis for the assessment
- 8.3.2.
- Positive condition: development of an economic activity
- 8.3.2.1.
- Contribution to the development of an economic activity
- 8.3.2.2.
- Incentive effect
- 8.3.2.3.
- Compliance with relevant provisions of EU law
- 8.3.2.4.
- Conclusion
- 8.3.3.
- Negative condition: the aid cannot unduly affect trading conditions to an extent contrary to the common interest
- 8.3.3.1.
- Identification of the market affected by the aid
- 8.3.3.2.
- Identification of the positive effects of the aid measure
- 8.3.3.3.
- Necessity of the State intervention
- 8.3.3.4.
- Appropriateness
- 8.3.3.5.
- Proportionality
- 8.3.3.5.1. The Purchase contract
- 8.3.3.5.1.1. Duration of the PC
- Table 9
- Load factor stabilisation time
- 8.3.3.5.1.2. Remuneration formula compensation
- 8.3.3.5.1.3. Overcompensation mechanism
- 8.3.3.5.2. The Initial assumptions and scenario analysis in the financial model
- 8.3.3.5.3. Benchmarking of the rate of return
- 8.3.3.5.3.1. Introduction
- 8.3.3.5.3.2. Assessment
- 8.3.3.5.3.2.1. Standalone Major Risk Premium
- 8.3.3.5.3.2.2. Target rate of return on equity
- 8.3.3.5.3.3. Estimation of the CoE
- 8.3.3.5.3.3.1. Conclusion
- 8.3.3.5.4. The selection of ČEZ as Project promoter
- 8.3.3.6.
- Avoidance of undue negative effects on competition and trade and balancing test
- 8.3.3.6.1. Choice of ČEZ as Project promoter (234)
- 8.3.3.6.2. The electricity PC
- 8.3.3.6.3. Effects on market structure, potential price manipulation and withholding capacity by ČEZ
- 8.3.3.6.4. Role of the SPV on the market
- 8.3.3.6.5. Conclusion on undue negative effects on competition and trade
- 8.3.4.
- Weighing the positive effects of the aid against the negative effects on competition and trade
- 8.3.5.
- Conclusion on the compatibility of the aid
- 9.
- CONCLUSION
- Article 1
- Article 2
- ANNEX
- Inputs into the financial model that are subject to changes
- Post EPC tender
- During the PC
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