CYIL vol. 15 (2024)

CYIL 15 ȍ2024Ȏ

STATE AID BY CZECHIA TO DUKOVANY II

STATE AID BY CZECHIA TO DUKOVANY II Evelyne Ameye

Abstract: In July 2020, the Czech government signed a framework agreement for the construction of a new nuclear power plant at its Dukovany site with the 70% state-owned electricity company České energetické závody (ČEZ Group or ČEZ) and its wholly-owned subsidiary project company Elektrárna Dukovany II. Under the terms of this agreement, state-owned ČEZ had to organize a tender to choose a reactor supplier, negotiate all contracts, and obtain all required permits to allow the new power plant to start operations in 2036. In March 2022, the Czech government notified the European Commission of its plan to support the construction and operation of project Dukovany II with a package of measures. The Czech government held that the support measures were justified because Dukovany II would increase the decarbonization of Czechia’s energy sector, diversify Czechia’s energy mix, and also enhance the security of the electricity supply for both Czechia and its neighboring countries. The envisaged support measures of the Czech government were three-fold and covered both the construction and operation of Dukovany II : first, a low-interest repayable state loan that would cover almost all construction costs; second, a long-term power purchase agreement; and third, a mechanism that would safeguard the utility in the event that certain unanticipated events occur, e.g., a change in Czech law or policy that would impede the construction of Dukovany II . EU state aid rules allow member states to promote the development of specific economic activities under certain circumstances as long as the aid is necessary and proportional and does not have an adverse effect on trading conditions capable of harming the EU’s common interest. Following a preliminary analysis, the European Commission found that the three-fold support measures envisaged by the Czech government amounted to state aid. The Commission also found that the aid was necessary and would help to develop the planned economic activity. However, the Commission had doubts as to whether the measures were appropriate and proportionate and whether they would not affect competition in a way that would be contrary to the common EU interest. In light of these doubts, the Commission opened an in-depth investigation in June 2022 to allow it to examine in detail whether the combination of all three support measures was appropriate and proportionate and to weigh any undue effect on trade and competition in the EU against the common EU interests served by the project. On 30 April 2024, after lengthy negotiations with the Czech government, the European Commission ultimately approved the support measures. However, the approval was made conditional upon firm commitments by the Czech government to amend the support measures on several critical points in order to ensure its compatibility with EU state aid rules. Resumé: V červenci 2020 podepsala česká vláda rámcovou smlouvu o výstavbě nové jader né elektrárny v lokalitě Dukovany se 70 % státní elektrárenskou společností České energe tické závody (dále jen „Skupina ČEZ“ nebo „ČEZ“) a její 100 % podíl. vlastněná dceřiná projektová společnost Elektrárna Dukovany II. Podle podmínek této smlouvy musel státní ČEZ zorganizovat výběrové řízení na výběr dodavatele reaktoru, vyjednat všechny smlouvy a získat všechna potřebná povolení, aby mohla být nová elektrárna uvedena do provozu v roce 2036.

241