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Energy Nuclear 17 June, 2019 11:00 am   

Can we expect bigger surprise than nuclear energy from US?


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The Poland President Andrzej Duda visited the United States, which signed a memorandum of understanding concerning cooperation in the field of nuclear energy with Poland. Under the cloak of the nuclear program, does Poland prepare an even greater surprise for the world than the new nuclear power plant? – wonders Wojciech Jakóbik, editor-in-chief of BiznesAlert.pl.

Decision on nuclear energy in Poland is not already made

Poland intends to build a nuclear power plant. The draft of the Polish Energy Policy until 2040 (PEP2040, the so-called energy strategy) assumes the construction of one facility with the capacity of 1-1.5 GW by 2033 and the construction of further, until reaching 6-9 GW of power. For comparison, the current demand for energy is estimated at 26 and by 2030 can reach 33 GW. In the most optimistic scenario, the nuclear energy will cover almost one-third of the energy generated in Poland. It is important for another reason. Thanks to it, the emissions from the energy industry will fall, because nuclear energy is produced without emission. In this way, the emission reduction objective included in the European Union’s energy and climate policy will be met (30 per cent by 2030).

Nuclear power plant, however, has one serious problem. Its construction, which rough estimates (it is not worth to pay attention to) assume an expenditure of 40 to 100 billion zlotys, must be co-financed. This is the case for any energy source, but this one is particularly expensive. To ensure zero-emission and cheap energy, you first need to spend in a proportion of between 4 and 10 billion zlotys. The Polish government does not intend to achieve this goal using a contract for differentials. It assumes to determine a price with an allowance guaranteeing the profitability of the entrepreneur’s business object involving capital in the project. This solution would end with new increases in energy prices, which the administration in Poland does not want to afford. Subsidizes prices in 2019 using the still undetermined Energy Price Bill. Thus, remains funding from the budget. It is not known, however, whether Poland will be able to afford it with growing social expenses. Here, the Americans can help.

– From the US side we have a declaration of fulfillment of our main condition, i.e. not only selling of technology and power plant construction, but also capital entry, i.e. participation in costs – said energy minister Krzysztof Tchórzewski in a conversation with Wirtualny Nowy Przemysł after signing a declaration on enhanced cooperation in the field of security from November 8, 2019. The topic may come during Polish-US bilateral talks. – We want technology together with a partner that would like to participate up to 49 percent in such a nuclear enterprise, but in a project of building only one unit, but project of cooperation for 20 years, assuming construction from 6 to 9 nuclear units – said on June 12 in the Sejm. – More international partners participate in these talks, but United States are the most interested to support Polish nuclear energy.

These words will probably revive the discussion about the so-called a differential contract rejected so far by the Ministry of Energy. It assumes that the price of energy from a nuclear block will be more expensive for a premium that will allow the foreign investor to have a certain profitability that guarantees return on investment. Will the Americans agree to such an option in cooperation, for example with the Japanese, who would give technology? Intensive contacts with the Japanese Ministry of Economy and Trade have been going on for several years. I was on the first study visit at Japanese nuclear power plants in 2017. In 2019, there was another one. Thereby hangs a tale?

Nuclear power actually appeared at the meeting of Duda and Trump on June 12. However, this is not a breakthrough. It is worth recalling, however, that the conversation of Duda about nuclear energy with President Donald Trump took place in September 2018. Therefore this is a continuation. Last year, declarations were made on the will to promote energy cooperation and diversification, including in the nuclear sector. This time Poland and the United States have signed a memorandum of understanding in the nuclear sector, which may or may not – because I do not bind too much – be a prelude to concrete cooperation on Polish nuclear power plants construction.

More concrete discussions about the Polish nuclear energy in the USA take place with the participation of the Government Plenipotentiary for the Strategic Energy Infrastructure Piotr Naimski. We already know that Poland and the United States signed a memorandum on 12 June on an agreement on cooperation in the civil nuclear sector, and it was with Naimski’s participation before the Duda-Trump meeting. He visited the USA in March this year at the CERAWeek conference in Houston. We do not know the details of the talks, because – as the sources in the government argue – their disclosure could harm the tender for nuclear technology, which is to be announced after the adoption of the Polish Nuclear Power Program.

However, disclosure of facts on this would help dispel doubts about the nuclear project, which also has opponents in the government, which is why the Prime Minister speaks about it like a sphinx. Nobody knows what he really thinks. On the other hand, the people of Minister Naimski at PGNiG have already signed several contracts for LNG supplies from the USA and establishing cooperation in the cybersecurity of the power grid operator PSE with the Americans. The memorandum from June 12 is their next achievement. However, it is not known if and when new particulars will appear. Nuclear energy development is also waiting for decisions in Poland.

More than energy industry

The nuclear program may be important for Poland due to other strategic goals than the security of energy supply without CO2 emissions, although economic cooperation may lead to their implementation. The involvement of Americans in the Polish nuclear program could become another tool for attracting the attention of this superpower during the period of uncertainty caused by the crisis of European Union identity and deterioration of transatlantic relations, as well as the threat of new isolationism in the United States. President Duda informed on June 12 that the number of US soldiers stationed permanently in Poland will increase, and the Americans will ensure the protection of drones. Poles have the right to expect offsets for substantial arms purchases, such as several dozen F-35s, about which I wrote in another text. Talks on this topic may be packet-like – as is the case with the largest US contracts, e.g. in Saudi Arabia.

Engaging the US in ever deeper economic-military cooperation in the most desirable version would be the beginning of even more revolutionary step, namely the inclusion of Poland in NATO Nuclear Sharing, in which Germany, for example, is already involved. If the Poles are currently discussing the construction of Fort Trump, in the future they could talk about the deployment of American nuclear weapons. For this reason, the word “civilian” is important as the adjective of nuclear cooperation announced by Perry and Naimski. It is worth recalling that during the Cold War, work on the Swedish nuclear program continued. The Americans were guarding the non-proliferation of weapons of this kind and together with opponents of the nuclear weapon in Sweden led to the extinction of the military program and civilian support. Perhaps participation in the Polish nuclear program could be a way to support Poles without transferring nuclear weapons to their territory. It is worth noting that the technological support of the West has allowed nuclear energy to flourish in South Korea and Japan.

It is worth recalling that Jarosław Kaczyński was in the nineties a supporter of obtaining nuclear weapons. – Regarding purely military matters, I am of the opinion that we should act to include Poland in the American nuclear defense system. This in my opinion would be the optimal solution – what I said to Gazeta Polska in February 2017. Do Poles prepare such a surprise for the world? It would explain limited communication on this matter. However, if the declarations on the support of the nuclear energy development by the Americans will not be fulfilled, it is best to change the topic of the discussion, because it would mean that there will be no Polish nuclear power plant. However, the discussion about Fort Trump and NATO Nuclear Sharing will continue.