Americans and the French are preparing offers to build nuclear power plants in Poland. Lurking in the shadows are Koreans who have also declared they were ready to take part in the program. Their engagement suggests that the 2033 deadline for the first reactor is achievable. The race for the nuclear contract in Poland is benefiting the client who is still on the fence – writes Wojciech Jakóbik, editor in chief at BiznesAlert.pl.
The nuclear club in Europe
The French embassy in Warsaw organized a meeting with journalists on the occasion of the opening the EDF office, which is to handle issues related to the nuclear power contract, in the capital city of Poland. During the event representatives of the French government and business argued that the EDF offer is the best for the Polish Nuclear Power Programme, according to which the first reactor should be completed in 2033 and another 6-9 GW should be added by 2043. „The end of 2022 is the last call to build a nuclear power plant in Poland by 2033,” Philippe Crouzet, the High Representative for Polish-French Cooperation on Civilian Nuclear Energy, said. „Germany abandoned this source of power, and Great Britain left the European Union. France supports Poland joining the nuclear club. This will balance the situation,” he stated. He also added that „it is apparent that some countries want to phase out nuclear power. Thanks to its strength France can support Poland on its road to this goal.” The French have also used a political argument and have proposed mutual support during voting and political debates in the European Union on nuclear power. However, it is worth pointing out that Poland and France are already voting hand in hand when it comes to nuclear power and this should not change, irregardless of which partner Warsaw will choose, as this is in the interest of both countries. This is why one should expect that Paris and Warsaw will continue to defend the atom in the EU taxonomy and other disputes of this kind. On the other hand, France will stick to its ambitious climate policy, which it can pursue with ease precisely thanks to nuclear power, which has made it the least emission-generating state in the European Union. Therefore, one should understand that irregardless of Warsaw’s decision, Paris will turn up the heat on climate policy at a time when Poles will want to turn it down.
Polish engineers at EDF construction sites
The French want to convince Poles with the fact that the EPR technology is accessible in Europe and has already acquired a license in France and Finland, and that it is also present outside the EU – in China and Great Britain. EDF argues that this type of a reactor is 36 percent more efficient and generates 30 percent less waste in comparison to the competition. EPR1200 is capable of producing 9 TWh of power a year, and thus prevents 6.6 million tons of CO2 from polluting the air. The French have also offered nuclear waste utilization with the help of their companies. They have also promised that the reactor will be so flexible that it will be capable of turning down the power by 80 percent within 30 minutes, and that its availability will be at over 90 percent. These features are important, considering the fact that nuclear power will be used to supplement the capacity of renewable energy sources in Poland. EDF has argued that their reactor could successfully be used to produce purple hydrogen, which is important for the EU climate policy and its climate neutrality target. The French also claim that the repeatability of the nuclear power projects at Hinkley Point C and Sizewell C in Great Britain has made it possible to lower the construction cost by 20 percent. So, the Polish copy could be cheaper than the projects that have been used by critics of nuclear power as examples of the technology being too expensive. The French believe that if the contractor for the Polish nuclear power is selected in 2022, it will be possible to complete the project by 2033. „We believe this is doable, which is why we are talking to our partners,” Deschaux said. EDF has promised jobs to Polish engineers in the country and abroad. It has identified 350 Polish companies that could take part in the construction of the NPP, and has reminded that in case of Hinkley Point C, 64 percent of the production was local. Poland doesn’t have a nuclear sector, but it can count on 45 percent in the beginning, 60 later on and then even more. Therefore, the companies engaged in the construction of the reactors in Poland could later on count on contracts for other EPR projects across the world.
Who will be the highest bidder?
The French are cautious when it comes to engaging their capital in Poland’s nuclear projects. „The financing model will be selected by Poland as a client. EDF will adjust to that choice. The money will come from export credits with proper guarantees and from Poland’s own funds, be it public, or private investors,” Philippe Crouzet assessed. „At Hinkley Point the contract for difference mechanism is used. It makes it possible to bankroll part of the investment. There is also another element that is not being discussed – Regulated Asset Base, which lowers investment risk and enables acquiring cheaper financing. This will affect production cost,” Thierry Deschaux, who is responsible for managing the EDF office in Poland, said. Interestingly he is also employed at Dalkii, which belongs to the EDF Group. During the meeting there was no mention of any financial engagement by the French government, despite the fact that in the past there were rumors about French banks wanting to cooperate. This may be an important issue when it comes to the race against Americans, who have promised Poles that the export bank EXIMPORTBANK would engage in financing the Polish nuclear power plants. The US companies Westinghouse and Bechtel have already received a grant from the United States Trade and Development Agency for a FEED study, which will be prepared by the company started by George Westinghouse for the Polish Nuclear Power Plants company (formerly known as PGE EJ1). Westinghouse will provide engineering know-how about the AP1000 technology, while Bechtel will bring in knowledge on managing facilities of this type. So far, the French have not offered such far-reaching financial and political engagement. Perhaps they are put off by the fact that the practically ready proposal for building the NPP by EDF in Poland was rejected when the government changed in 2015.
An undecided client
The potential technology and capital providers for the Polish Nuclear Power Programme are competing at full speed, which proves the Polish plans do have a true potential. The competition between them is good for the client who can also choose the South Korean proposal, which is presented by the Korea Hydro & Nuclear Power company with much less detail, also on BiznesAlert.pl. That Poland has still not decided who will build the nuclear power plant on its territory only reveals that the 2033 deadline for commissioning the first reactor is arbitrary and secondary in view of the fact that already in the 2020s our country’s dependence on the import of energy and gas will be growing. This is because the capacity generation gap will be widening, and due to the lack of alternatives it will be sealed with gas.