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Energy Nuclear 4 July, 2019 1:00 pm   

The United States can gain from the Polish nuclear project


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In June, public opinion was electrified by information about the Polish-American memorandum on cooperation in the nuclear energy sector. This is not a major breakthrough for the Polish nuclear energy. The country has capital, experience and technology, but also problems due to the decreasing importance of the nuclear energy on the domestic market. Foreign nuclear projects, including the Polish ones, can be an opportunity for the American nuclear industry – writes Patrycja Rapacka, journalist of BiznesAlert.pl.

The American nuclear industry is looking for support from Trump

Until recently, in February 2019, a meeting of American companies representing the nuclear sector with the President Donald Trump took place. Among the participants of the meeting there were representatives of, among others: NuScale Power, Terra Power, Westinghouse Electric, General Electric, Centrus Energy and Lightbridge. The meeting was held on the initiative of IP3 International, and more specifically of General Jack Keane. In the process, representatives of the sector asked for political support for American companies wishing to compete on the international nuclear energy market with Russia, China and France. American companies argue that they must maintain their leading position. They also argue that US nuclear power must maintain “strong standards of non-proliferation and security in global markets”. The aid would concern the Middle East and the area after it. As reported by Bloomberg, during the meeting it was said that US national security may be at risk because the country no longer has the position of the main civilian developer in the nuclear energy sector. Why did this meeting happen at all? The existence of nuclear energy in the USA is under a question. The chaotic policy of Donald Trump causes that it is not known what the future of this sector will be like, as existing nuclear blocks are aging. Energy Secretary Rick Perry is a politician supporting the development of conventional fuels and a nuclear energy. The development of nuclear energy is also not helped by the fact that the market is flooded with cheap gas or renewable energy, which were boycotted by Donald Trump at the beginning of his election campaign. The liberalization of the electricity market has made financing of capital-intensive strategic projects more difficult, which, combined with the shale revolution in the US, undermined the profitability of some of the existing nuclear and planned projects. Added to this are the recent Westinghouse problems in 2017, which after financial crises were taken over by Canadian Business Partner L.P. It was with the representatives of Westinghouse that the President of Poland Andrzej Duda met during a June visit to Houston, Texas. The export of nuclear technologies outside the United States may be a mean of guaranteeing the development of the American nuclear industry. However, it is not out of the question that American companies may, due to this, be more interested in potential investments in Poland, although our country has not yet made any decision regarding the construction of the nuclear power plant.

Nuclear energy in the US

Currently, according to the World Nuclear Association (WNA) data, there are 98 operating nuclear reactors located in 30 states in the USA. These units are currently responsible for producing 20 percent of electricity in the US, so it will be hard for the country to simply give up the nuclear energy if it happens at all. The average reactor efficiency ratio exceeded 90 percent and remained at this level since 2002. Over the course of the year, the US spends about $ 75 billion on conservation and modernization of power plants. According to the WNA calculations, if today’s reactors are decommissioned after 60 years, by 2030 will need about 22 GW of new nuclear capacity, until 2035 – 55 GW, in order to maintain their 20% share in the energy mix. Currently only 4 reactors are under construction.

American companies are already counting on the support of the Trump administration and state authorities in the development of nuclear energy, which is difficult to compete with cheaper electricity, e.g. in Ohio, generated by gas combustion. In the east of Ohio, is located one of the largest gas sources in the United States – Marcellus and the Utica deposit. In the last few years in Ohio, electricity prices have fallen to such an extent that it is hard for operators and energy companies to run nuclear and coal businesses. As a result, FirstEnergy Solutions (just bankrupt, after filing for bankruptcy) will be forced to close the reactors at Davis-Besse and Perry power plants in 2020 and 2021 for economic reasons if it does not receive financial support from the state. The company does not know what to do, as it is approaching the date of purchase of another nuclear fuel supply. It talks with the state authorities on this matter. No wonder that other corporations give up the nuclear energy or look for opportunities abroad. An interesting fact is that a group of companies has already emerged on the US market that have specialized in the fast and cheap closing of nuclear reactors. According to Bloomberg, from 2013, 6 power plants were closed in the USA – Crystal River (Florida, 2013), Kewaunee (Wisconsin, 2013), San Onofre (California (2013), Vermont Yanke (Vermont, 2014), Fort Calkoun (Nebraska, 2016) and Oyster Creek (New Yersey, 2018) Companies such as Northstar Group Services can dismantle a power plant at a lower cost in less time, which allows to get more money in a trust fund created for the opportunity to build a power plant that the dismantling company takes over.

The US has opportunities abroad

The US nuclear sector, however, does not give up and sees a lot of opportunities abroad and on prospering markets. Currently, nuclear companies are in the fight for the Middle East, which considers nuclear energy combined with renewable energy and gas as a response to the challenge of reducing dependence on oil (eg Saudi Arabia). The potential is also seen in Asia, Africa and Europe. Russian Rosatom is fiercely striving for Asia and Africa. Americans have been involved in the European market for many years through Westighouse or General Electric Hitachi, which is part of General Electric. The company is currently supporting nuclear projects in, for example, Romania (Cernavodă power plant) and Turkey (Akkuyu). GE has been present in Poland since 1992 and may be a potential supplier of technologies or engineering and technical devices for the construction of a Polish nuclear energy. Another experienced player on the nuclear market – Bechtel – also has a good chance. If GE did not win the tender, it could be that it could form part of a larger consortium of American companies that could potentially implement the project to build the first nuclear power plant in Poland. At this point it is too early to decide if it is American companies that will undertake the construction of a Polish nuclear power plant. Let us not forget that, above all, the decision on the construction of a nuclear power plant in Poland has still not been made.

The final location of such a unit is also unknown. A tender for a particular technology has not been announced. Atom has been included in PEP 2040, but this does not mean that such a project will be implemented in Poland at all. Nuclear energy is a stable source of generating electricity, which could contribute to the replacement of old, carbon-dioxide emission blocks, as well as to meet the growing ambitions of the European Union’s climate and energy policy. Americans perceive Europe’s efforts to reduce CO2 emissions, which is why they want to export nuclear technologies. Political will is in the case of Poland, will it be the same for business?