The two largest political parties in Poland lost their consensus around a key energy project. Is it really too late for the nuclear? – wonders Wojciech Jakóbik, editor-in-chief of BiznesAlert.pl.
Is it really too late?
During the Civic Coalition Convention prof. Jerzy Buzek said that it is too late for nuclear energy in Poland. – Nuclear? I was for it 5-10 years ago, but probably not today. Energy from wind on land is the cheapest, the other is energy from wind at sea, energy from fossil fuels will be more expensive. You have to balance it. It is too late for nuclear energy in Poland. Nobody is ready for it. We do not have experts or professionals in this industry. Finland and Czechia have those, and therefore, the whole sector and they are expanding it. Energy from the nuclear in 12-15 years is too late – said the politician quoted by BiznesAlert.pl. It is worth recalling that PGE EJ1 established during the Civic Platform government is still in operation. The National Center for Nuclear Research is also operating as a human resources center for the Polish nuclear project. The first of these has recently announced a competition for board members. Without the implementation of the nuclear program, the existence of these entities will lose its meaning.
It should be agreed that the nuclear program has a delay. If the Polish Nuclear Power Program from 2014 was implemented as planned, it is likely that the first nuclear power plant originally planned for 2025 would be constructed. The government of the Civic Platform and the Polish People’s Party was initially a supporter of this source of energy, but the cabinet of Ewa Kopacz removed the position of the plenipotentiary for nuclear energy and from then on the nuclear project had been halted. The Government of Law and Justice decided to come up with the concept of building a nuclear power plant from scratch and has been preparing for three years to update the PPEJ and start a technology tender. The time is running out. If the first power plant is supposed to be ready in 2033, the construction estimated for a decade should start in 2023 at latest. Preparation for construction is estimated for about two years, that is, it should start in 2021. Beforehand, a technological partner must be chosen, which is already another year. PPEJ still needs to be updated before the end of 2019.
Breaking the pre-election silence about the nuclear
According to my information, it appears that support for a project within the ruling party is fixed, but the electoral calendar encourages the minimization of inflammatory topics in the public debate in order to maximize the result and win an independent majority. This might be the reason of current reserve in government communications on this subject. An exception may be the PiS convention where minister Naimski spoke about 20 percent share of nuclear energy in the mix until 2040, and minister of energy Tchórzewski who said that the program needs to be speeded up.
Theoretically, it is possible to present a PPEJ update, for example, along with the actual Energy Policy of Poland until 2040. A great opportunity for that would be the Economic Forum in Krynica in September 2019. Then, there could be a “nuclear acceleration” signaled by the energy minister Krzysztof Tchórzewski.
Market and politics in the game for the nuclear
If the work on the Polish nuclear could be speeded up, the financing model will have to be resolved. Minister Tchórzewski spoke about the necessity of obtaining half of the funds from a foreign investor in the amount of about 30 billion dollars. The government has repeatedly declared that in addition it wants to obtain cheap loans with a long-term repayment from financial entities looking in the long-term, for example, retirement funds. The most important players for the Polish nuclear are the French, Koreans and Americans. Cooperation with each of them has advantages and disadvantages.
France can give technology, finance, and become more politically involved with Poland in the European Union arena. The fight against Donald Tusk for the chair of the European Council may be a precedent. Interestingly, during the campaign in this case, the PPEJ was quickly overtaken and EDF talked about engagement in Poland. This may mean that the prime minister won the support of his candidacy by President Francois Hollande for permission to build an NPP involving EDF. Theoretically, the cooperation of this company with a Japanese subcontractor would guarantee a quick pace of work. France, however, now has a problem with the credibility of the policy towards the nuclear. They consider turning off the effective Fessenheim power plant and more. They are silent on the European forum about the nuclear. Therefore, EDF is not perceived as a reliable partner for the time being. Interestingly, Hollande did not close Fessenheim, and Macron has not yet decided on this matter. There is, therefore, a chance to reverse the illusion of the nuclear in France.
South Korea is in turn a partner desirable from an economic point of view. The experience of project implementation in Saudi Arabia and others proves that it can finish the project quickly. It can also offer technological cooperation, for example in the armaments sector. Koreans, however, lack the political component that other players give.
The US does not have one nuclear company like EDF and has so far had a purely market approach towards the nuclear sector. However, due to the importance of the civil nuclear sector for the development of the nuclear triad (the prospect of a retirement in the power plant for military specialists), as well as the growing involvement of nuclear companies from China and Russia in Central and Eastern Europe, which are another manifestation of the political aspirations of these countries in the region, Americans may be interested in offering Poland and the Czech Republic a completely new solution. It could be assumed that they would co-finance the implementation of a nuclear project through legislative initiatives for the export of nuclear technology or the extension of the catalog of states deserving foreign support for security reasons – in order to stop the expansion of China and Russia. Their advantage is the possibility of including other players in the supply chain of the Polish nuclear power plant. For example, AP 1000 reactors could be created in Korea. Americans want to remain leaders in nuclear energy and need it for military purposes. Their interest in projects in the region is enhanced by political competition from the East. Is it enough for their approach to change from market to political?
Japan could engage companies that could become subcontractors of other components. They also think purely by market principles and invest in the training of Polish nuclear staff. For example, this week the three-week training of officials from the Ministry of Energy in Japan begins.
The European Commission will have to assess the compliance of a possible tender for a nuclear with regulations. A single player promotion solution can be a problem from their point of view. However, there are precedents. In the past, the European Commission has approved the contract for Hungarian Paks and the Hinkley Point support model. However, it is worth remembering that the new European Commission may be more influenced by liberals and greens, but it is not known how this will affect its approach to nuclear energy.
If Poles really want to build an NPP, they must hurry. It is not known, however, whether they will be in a hurry, because soon next elections will be held in Poland, this time parliamentary. Signals from the convention of Law and Justice may indicate that the party of power is actually ready to accelerate. The criticism of the nuclear program by the representatives of the Civic Coalition may be – paradoxically, but according to political mechanisms – a factor that further encourages action.