The Czech government has four possibilities with regard to new nuclear power plants: to wait; to break-up CEZ; to leave the EU; or to turn to Russia (or China) for the money.

Let us set aside the environmental objections to building new nuclear power plants in the Czech Republic today, and instead concentrate upon the economic and political objections.

Here are some basic facts to consider when the hysterics break out.

Very few people now, even in the Czech Republic, dare argue that building a new nuclear power plant makes commercial sense in the second decade of the twenty first century. Even fewer would dare to suggest that CEZ is able to afford to do so.

The finance minister describes the Temelin project as 'nonsense' from an economic standpoint, and admits that he "neither knows how much it will cost, nor how it will be financed". His colleagues in government are proposing a public subsidy, the scale of which is debatable.

As a member of the EU, the Czech Republic will need EU approval of any state aid it proposes. The EU forbids state aid if it harms competition. Unlike in Britain, which has a competitive, liberalised energy market, the Czech Republic is monopolised by CEZ. A nuclear subsidy scheme of the kind being proposed in the UK would be ruled illegal in the Czech context because it would reinforce CEZ’s market dominance, harming competition and discriminating against other market participants.

In short, such a subsidy would represent a massive transfer of economic rent to CEZ.

This transfer of economic privileges to CEZ at the expense of its competitors will be overseen by politicians and the managers they appoint (these now include Professor Vaclav Paces*). The construction of new nuclear power plants, paid for by the taxpayer, in the Czech context of a monopoly power generator owned by the state and managed by political appointees, will have the effect of increasing and centralising the political and economic power of the state (in other words, the cartel of political parties that run the state) over its citizens.

When all is said and done, if the Czech establishment is determined to build new nuclear power plants, it has four options open to it today:

1. To wait until economic conditions for this type of investment improve and run the risk that they do not or that a new industrial revolution, based upon technological advances in the storage of electricity, renders nuclear power obsolescent forever;

2. to accept that any new nuclear power plants will have to be funded by a foreign state, such as Russia or China;

3. to leave the EU, and subsidise the construction from taxpayers money in ways that would have been forbidden by its continuing EU membership;

4. or to break up CEZ, thereby securing the required EU approval of the state aid currently being proposed by the Necas government.

Which do you prefer?

*The chairman of the so-called ‘independent energy commission’, Vaclav Paces, was last week given a sinecure on the supervisory board of CEZ. Miroslav Kalousek, whose task it is as finance minister to award these sinecures, said Professor Paces would boost the credibility of the board. This, if I may say so, would not be hard given who chairs the board today. But we are now left wondering whatever happened to the much-hyped independence of Professor Paces and his body of wise men and woman (made up of nuclear scientists and failed politicians), a group established by the energy entrepreneur and then prime minister, Mirek Topolanek, in 2007. Of whom, exactly, were the commissioners independent –the politicians that appointed them or the industry that employs them?