PRAGUE—Czech power company CEZ AS BAACEZ.PR -1.25% Thursday abruptly canceled its $10 billion tender for two new nuclear reactors one year ahead of the planned 2015 deadline to pick the winner, leaving the U.S. and Russian companies that had made it to the final round of bidding empty-handed.
CEZ, which is 70% state-owned, said it still planned to have a new strategy for the expansion and modernization of its nuclear power facilities by the end of this year.
But it said plans to double the size of its Temelin nuclear power plant didn’t now make sense economically. Wholesale electricity prices have more than halved since the tender was launched in 2009, while prices for carbon emission permits in Europe have nearly collapsed, making coal a more attractive fuel for power generators.
Uncertainty over the shape of future European capacity markets and subsidies for renewable energy had further complicated calculations of the project’s return on investment.
The cancellation of the tender is a blow to the companies that had made it into the final round of bidding—Russia’s state-owned Rosatom and Pennsylvania-based Westinghouse Electric Co, a unit of Japan’s Toshiba Corp.
France’s Areva SA was originally in the final round but in 2012 was excluded from the bidding due to commercial and legal flaws in its offer, according to CEZ.
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