Alerts Energy Infrastructure / Innovations Nuclear 29 January, 2024 7:30 am   

New government set on bankrolling Poland’s first NPP with a contract for difference

WhatsApp-Image-2020-11-02-at-13.06.44 Ministry of Climate and Environment. Picture by Marcin Roszkowski

The Ministry of Climate and Environment confirmed to that it will continue to work on organizing the funding for the nuclear power plant in Pomerania with a contract for difference due to the Electricity Market Design reform (EMD) and the need for notification to the European Commission.

“The financing for nuclear energy in Pomerania will be provided with the help of a differential contract. The bilateral CFD is the only form of price support (which does not preclude the use of other forms of support, e.g. government guarantees for debt financing) provided for in the framework of the interinstitutional agreed rules on the functioning of the European energy market, in the so-called EMD regulation,” explains the Ministry referring to the Electricity Market Design reform.

“This instrument will make it possible to conduct the process of financing and developing a business model for Poland’s first NPP with the European Commission efficiently. However, it should be borne in mind that the Commission will still conduct a detailed analysis of the compatibility of the measures, as part of a wider aid package, with the principles of permissible public aid – including the proportionality of the measure,” the Ministry pointed out in the response to

The contract for difference assumes a minimum price for the generation of energy from the built power plant financed with energy bills. If the price on the market is lower, then the manufacturer has to compensate for the difference. Ultimately, the atom in Poland aims to reduce fluctuations in energy prices and the carbon intensity of the sector, giving stability of supply and a more attractive price in cooperation with renewable energy sources whose performance depends on the weather. The differential contract was being negotiated by the Climate Ministry before the change of government, precisely because of the EMD.

Poland wants to have the first reactor in 2033 at the Lubiatowo-Kopalino site in Pomerania and 6-9 GW in 2043. However, the Polish Nuclear Power Program is to be updated together with Poland’s Energy Policy Until 2040 by the Ministry of Climate under the new minister Paulina Hennig-Kloska from the government of Donald Tusk, which was formed at the end of 2023.

Wojciech Jakóbik