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Shares slump for Europe’s biggest publicly traded power company, due to Czech Republic’s PM’s nuclear power dream

A Billionaire Prime Minister’s Nuclear Dream Is Spooking CEZ Investors Bloomberg,  By and January 25, 2019,

  • Government is revamping panel discussing reactor financing
  •  
    Analysts say state is unlikely to force CEZ to foot the bill
  • Billionaire Prime Minister Andrej Babis’s ambition to build new nuclear reactors in the Czech Republic is denting CEZ AS’s shares well in advance of any deal actually being struck.

    That’s particularly unfortunate for the investors in eastern Europe’s biggest publicly traded power company, who should under normal circumstances be benefiting from a rally in electricity prices to near a seven-year high.  CEZ is lagging peers because politicians keep dragging their feet about deciding who’ll pick up the multibillion-dollar bill for new reactors that would be unprofitable even at today’s prices

    This protracted saga is yet another example of how nuclear energy once seen as the main low-carbon alternative to fossil fuels is struggling to get off the ground because of mounting costs. Only last week, Japanese conglomerate Hitachi Ltd. took a $2.8 billion charge after scrapping a U.K. project even though the U.K. government put its most generous offer yet on the table to help fund the Wylfa plant in Wales. ……..

    The unfavorable math forced CEZ to cancel a tender for new reactors in 2014, after years of price negotiations and legal disputes with potential suppliers.

    With the cost of renewable technologies plummeting, making wind and solar plants even more attractive to nations phasing out fossil fuels, the surge in costs from contracts to completion for new nuclear plants in Finland and France is evidence of how the technology is falling behind competitors. https://www.bloomberg.com/news/articles/2019-01-25/nuclear-dream-of-billionaire-premier-is-spooking-cez-investors

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January 26, 2019 - Posted by | business and costs, EUROPE

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