CEZ stake in Rolls-Royce SMR opportunity for Czech industry - chamber

Prague, Oct 29 (CTK) - The investment of Czech semi-state energy group CEZ in the UK's Rolls-Royce SMR is an opportunity for the Czech industry to get directly involved in the production of modular reactors, according to the Czech Chamber of Commerce and other experts contacted by CTK.

However, analysts also point to possible risks associated with the fact that the technology has not yet been tested in practice.

CEZ today signed a strategic cooperation agreement with Rolls-Royce SMR on the development of modular reactors. It will buy a roughly 20 percent stake in the British company, for which it will pay several billion crowns. The first reactor should be built in the first half of the 2030s in Temelin, southern Bohemia.

According to the Chamber of Commerce, the establishment of cooperation is a great opportunity. "It means that the production of small modular reactors could be partially implemented in the Czech Republic, that is with the involvement and contribution of Czech industry," the chamber told CTK.

The Confederation of Industry noted that modular reactors make a lot of sense in the transformation of energy and industry.

"The Czech Republic has many years of experience with nuclear energy and local companies still have excellent know-how that can be used in the development and production of modular reactors. This is a great opportunity for our companies, and the agreement between CEZ and Rolls-Royce SMR can certainly help this," said confederation head Daniel Urban.

Jiri Gavor, an analyst at ENA and executive director of the Association of Independent Energy Suppliers (ANDE), also sees the agreement as the right decision. "Moreover, the choice of Rolls-Royce has advantages compared to other competing options. The power output is not that small, approaching the Dukovany units, which promises cost-effectiveness for deployment in the power sector and big industries," Gavor said.

In addition, CEZ's stake in the British company will allow Czech companies to profit from supplies to other countries, he said.

Capitalinked.com analyst Radim Dohnal said CEZ had made the right move, but with a delay of about two years. "The desired state would be great - quicker implementation, lower demands on the grid and faster permitting. But the problem is that such a reactor has not yet been implemented in the Western world. So CEZ is basically investing in a start-up at a somewhat advanced stage of development but at a fairly late stage of valuation," Dohnal said.

According to Czech nuclear experts, modular reactors should be an important part of the Czech energy mix and could play a role after the upcoming shift away from coal-fired power sources.

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