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Energy 30 May, 2017 9:00 am   
Editorial staff

Nuclear Poland? There is a way, but is there a will?

EU’s ambitious climate policy stimulated the Polish discussion on the future of our energy sector. The government in Warsaw recognized coal as its foundation, but that does not fit into the energy policy trend Brussels is pursuing. Is nuclear energy our chance to address the expectations of EU decision makers?

Let us have a look at how Poland is preparing to utilize this kind of energy. It is worth starting with history. The resolution on the Polish Nuclear Energy Program (PPEJ) was adopted by the Council of Ministers on 28 January 2014. It determines the scope and structure of activities that are necessary to introduce nuclear energy. The Program is binding for the years 2011-2030. Its implementation costs were estimated until the conclusion of its main stage – opening of the first nuclear power plant. It is expected that the Program will be updated every 4 years, which will allow verification of its costs.

In 2015, Ewa Kopacz’s government declared that two 3000 MW units will be constructed by 2025. By 2030 another two units were supposed to be completed, totaling at 6000 MW capacity and about 19% nuclear energy participation in energy production in Poland. In July 2015 the PGE Group moved the deadline for opening the nuclear power plant to 2029. This was caused by the fact that the special purpose vehicle PGE EJ1, had to take over environmental studies from WorleyParsons, which did not meet its deadlines. However, after this declaration, PGE did not introduce any changes to the PPEJ. According to the Energy Ministry by the end of the year an updated version of the document will be published, but it is not certain whether this deadline will be met.

The doubts regarding the Polish nuclear sector are fuelled by recent statements made by people responsible for the implementation of the project. During a conference in May, where the PGE Group announced the purchase of EDF’s Polish assets, Biznesalert.pl asked Krzysztof Tchórzewski, the Minister of Energy and Henryk Baranowski, PGE Groups’s President of the Management Board (PGE Group is responsible for the construction of the nuclear power plant in Poland – editor’s note), about the nuclear plant. The minister replied that the decision on the plant is connected with the energy mix and EU greenhouse gas emissions limits, which is why it would be made before the end of the year. These issues have not been solved, but the choice has to be made as soon as possible. Only after the decision has been made, will there be a resolution on the funding model.

At the same time, Baranowski stated in accordance with the strategy, that the decision on the construction of the plant will be made after 2020. If the legal and market conditions are different, the company may change its strategy. There is an ongoing discussion on the issue. He also added that the activities related to the construction of the plant in Poland are taking place in accordance with the schedule and strategy. This does not change the fact that up till now the policy has not brought any real results. Especially that the EU energy and climate policy reform is significantly limiting options of Polish decision makers, because it perceives coal as the basis of its energy system.

In an interview with BiznesAlert.pl, Maciej Bukowski, PhD, president of the WiseEuropa think tank said thatIf we had a long term plan, for the next 30-40 years, to gradually replace coal in our energy system with renewable energy sources, gas or nuclear energy, it would be a lot easier for us to take a realistic look at the actual production potential of our coal industry. However, we do not have such a plan and every government – contrary to facts – convinces itself that our economy is based on coal. We are the last people in Europe who believe in this, and we don’t notice that this kind of conviction is considered irrational even in countries like China and India.”

Polish politicians talked about forming a coalition of states that would help Warsaw to promote our view on the energy sector. However, during the twelfth plenary meeting of the European Nuclear Energy Forum in Prague, which concluded this week, the Czech Republic and Slovakia, i.e. member states of the Visegrad Group with which Poland wants to develop cooperation, sent a clear signal. Both Bratislava as well as Prague are planning to continue developing nuclear energy on their territory. They believe it will allow them to meet the EU climate policy’s CO2 emission cuts.

Nevertheless, nuclear energy may help us to implement an ambitious climate policy, which is something minister Tchórzewski did not exclude in mid March. Zbigniew Kubacki, Vice-Director of the Nuclear Power Department at the Ministry of Energy, gave a similar impression, when he explained to Biznesalert.pl that “the obligation to implement the targets of climate and energy policy will make the European Commission look for various ways to achieve them. Nuclear energy is such a panacea, because as a zero emission energy source, it may lower all indicators and global emissions at the EU level.”

It is also worth mentioning that nuclear power appears in other Polish strategic documents. In mid 2016, the government presented the Responsible Development Plan authored by Vice-Prime Minister, Mateusz Morawiecki. The Plan said nuclear energy should be considered one of the tools that should improve energy efficiency. It assumed that the PPEJ would be continued and accelerated. It also said that the PPEJ should support and coordinate national companies in their preparation for the construction of the nuclear power plant. The Plan also talked about the preparation for the construction of two power plants as part of the PPEJ with a total capacity at 6000 MW net (4-8 nuclear units). According to Wojciech Jakóbik, Biznesalert.pl chief editor, Morawiecki’s Plan is a wish list that encompasses all possibilities of development of the Polish economy, which is especially visible in the part of the document that talks about energy.

Despite that, the Polish government is considering going nuclear. Teresa Wójcik, editor at BiznesAlert.pl, cited Energy Vice-Minister, Andrzej Piotrowski, who in mid May said that we should not ask “if there will be nuclear energy”, but “how to produce it.” “How to organize financing, which technology to choose,” asked Piotrowski. The vice-minister stressed that one of the biggest tasks that cannot wait is education – preparing specialists and the society. The specialists will have to construct and “operate the first Polish nuclear power plant”. “We should also start educating the society, so that it accepts the new energy producing sector. This is why we are looking to France and its vast experience.”

It is worth mentioning that in order to receive financing for new power units in Europe, they have to fulfill the tight emissions limit at 550 g/kWh. In practice this means that coal-powered energy production will be eliminated and alternative power generation sources will have to be found. At the same time, Poland’s energy strategy until 2050 will be published in autumn at the latest. Perhaps it will include nuclear energy.

However, it remains unknown how much energy in our country should be generated by nuclear power plants. How many units will be constructed? What will their capacity be? Where will they be located? When a decision will be made? According to PGE Group’s Vice-President of the Management Board for Finance, Emil Wojtowicz decisions on the nuclear power plant will be taken after 2020. Answers to the above questions will be available after clear political decisions are made. These, in turn, will be made after the technology provider and financing model are determined. For these reasons meetings are being held with representatives from South Korea and France, potential providers of nuclear technology. An updated version of the PPEJ should be available by the end of the year.

Financing

The ongoing debate is also about the mentioned financial issues. At the beginning of May, the Energy Ministry announced that a partner who would provide only the technology, would be necessary to complete such an investment. According to an earlier assumption the partner was supposed to be responsible for both – technology and financing. However, the ministry stressed that the latter would be ensured by national funds. This is doubtful, as it remains unclear who would be the investor, especially that Polish energy companies chipped in to save coal and repolonize power plants. At the same time, the future shape of the capacity market, whose job would be to ensure funds for the new investments, remains unknown.

In an interview conducted by Biznesalert.pl journalists for “Rynek Opinii” program on the RDC radio station, the wysokienapiecie.pl portal expert, Justyna Piszczatowska stated that “high construction costs of a nuclear power plant would balance out the increase in energy prices, which according to estimates will be twofold. In the context of the inevitable negotiations with the European Commission about the winter package, uncertainty is only increasing. The EC’s initial proposals when it comes to efficiency, diversification of sources and emissions limits were restrictive for us, but the newer version of the proposals is even stricter. Adding nuclear to the energy mix may not be enough, because countries such as Germany and Austria are initiating a trend of gradually departing from that kind of energy production.” In Piszczatowska’s opinion “we are missing a long-term vision and this has been a problem of all Polish governments for the past 20 years. However, sticking to coal will be unreasonable and expensive.”

Technology

Poland does not have nuclear technologies and is forced to import them. Except for the US, France and South Korea, other potential partners, according to the Energy Ministry, include Canada and Japan. China is also an option, especially that it is thinking about investing in a nuclear fuel factory in Ukraine, which could be useful for the Polish nuclear plant. However, it remains unknown whether the Chinese will be interested in Poland, once they enter the Ukrainian market.

Nuclear power – an opportunity for Polish energy?

According to Piotr Stępiński, BiznesAlert.pl editor, nuclear power can be an opportunity for Polish energy. However, this would require decisive actions. It is good that there are ongoing talks with potential providers of technology, but the construction process has to speed up. Contrary to what Minister of Energy, Krzysztof Tchórzewski said during the European Economic Congress in Katowice, Soviet Russia is not responsible for the fact that Poland does not have nuclear energy. The blame is on Polish decision makers, who have failed to take effective action in this regard.



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