Commission opens in-depth State aid investigation into Czech support to two new nuclear units in Dukovany

The European Commission has opened an in-depth investigation to assess whether public support that Czechia plans to grant for the construction and operation of two new nuclear units in Dukovany is in line with EU State aid rules.

The Commission's investigation

In April 2024 the Commission approved aid for the construction and operation of a single new nuclear reactor in Dukovany. Dukovany is the site of an existing nuclear power plant. However, the Czech government subsequently decided to extend the investment in nuclear capacities to speed up the decarbonisation of the electricity sector and address an identified gap in electricity supply. In October 2025, Czechia notified the Commission of its plan to support the construction and operation of two new nuclear units in Dukovany, with an electricity generation capacity of up to 976 MWe each.

The two new units, which are scheduled to start operating in 2036 and 2037, should increase the security of electricity supply for Czechia and for neighbouring countries, helping the decarbonisation of the energy sector and diversifying the Czech energy mix. The beneficiary of the measure is Elektrárna Dukovany II (‘EDU II'), a company set up to develop and operate the new nuclear units. EDU II is owned by the Czech state (80%) and ČEZ (20%), the only nuclear power plant operator in Czechia.

Czechia plans to support the construction of the new nuclear units through three measures: a low-interest repayable State loan of an initial amount currently estimated between €23 billion and €30 billion, which will cover the full construction costs; a two-way contract for difference (‘CfD') with a proposed duration of 40 years to ensure stable revenues for the nuclear power plant; and a mechanism to protect EDU II in case of policy changes and adverse impacts, to address the risk arising from the longevity of exposure to policy changes.

At this stage, based on its preliminary assessment, the Commission has found the project necessary and considers that the aid facilitates the development of an economic activity. Nevertheless, the Commission has doubts on whether the measure is fully in line with EU State aid rules. For this reason, the Commission has decided to open an in-depth investigation in relation to:

• The appropriateness and proportionality of the aid package. Since there are several aid measures that together can limit the risk for the beneficiary, it is important to ensure that no more aid than necessary is ultimately granted. In particular, the Commission has doubts on whether the proposed package achieves an appropriate balance between reducing risks to enable the investment and maintaining incentives for efficient behaviour, while avoiding excessive risk transfer to the State.
• The impact of the measure on competition in the market and whether this is kept to the minimum. In particular, the Commission has concerns that several essential design elements of the CfD remain insufficiently specified, preventing the Commission from fully assessing whether the mechanism maintains efficient operational and maintenance incentives. The Commission cannot conclude at the current stage that there are sufficient safeguards to ensure that ČEZ's existing market power is not consolidated or indirectly reinforced, and to prevent that aid is transferred to consumers or specific market participants.
• The compliance with other provisions of EU law, in particular with the design principles set out in Article 19d(2) of the Electricity Regulation as regards the CfD.

The Commission will now investigate further to determine whether its initial concerns are confirmed. The opening of an in-depth inquiry also gives Czechia and interested third parties the opportunity to submit comments. It does not prejudge the outcome of the investigation.

Background

Under the Treaty on the Functioning of the EU (‘TFEU'), Member States are free to determine their energy mix, the conditions for exploiting their energy resources and the general structure of their energy supply. The decision to promote nuclear energy is a national competence.

State aid to support nuclear energy can be assessed directly under Article 107(3)(c) TFEU, which allows Member States to facilitate the development of certain economic activities under specific conditions. The support must be necessary and proportionate and must not adversely affect trading conditions to an extent contrary to the common interest. Following the entry into force of the new electricity market design rules in July 2024, the Commission also assesses compliance with the design principles for two-way CfDs set out in Regulation 2024/1747.

For More Information

The non-confidential version of the decision will be made available under the case number SA.117794 in the State aid register on the Commission's competition website once any confidentiality issues have been resolved. New publications of State aid decisions on the internet and in the Official Journal are listed in the Competition Weekly e-News.