Polish Briefing 14 April, 2021 10:30 am   
COMMENTS: Mateusz Gibała

Polish Briefing: Nuclear power in Poland on time? The Fitch agency doubts


What goes on in Poland on the 14th of April.

Nuclear power in Poland on time? The Fitch agency doubts

The announced sale of shares in the first nuclear power plant project in Poland to the State Treasury has a positive effect on the credit profiles of energy companies, reports the Fitch Ratings agency. It also raises doubts as to whether Poland will be able to complete the project on time.

According to Fitch, this step eliminates the risk of participating in high-risk, long-term and highly capital-intensive nuclear power projects that are beyond the capabilities of even a consortium of companies, if not backed by price support mechanisms or government debt guarantees. It will also allow companies to focus on expansion with much less capital and a much shorter time to obtain positive effects on results, such as wind, solar and gas energy.

The first nuclear power plant project in Poland is to be implemented by PGE EJ1, which is owned at 70 percent by PGE Polska Grupa Energetyczna and at 10 percent by Enea, Tauron and KGHM Polska Miedź each. According to the announced agreement, the stakeholders will sell their shares in PGE EJ1 to the State Treasury. The final amount, after the adjustments, will be PLN 531 million, of which PGE will receive PLN 372 million, and the other partners will receive PLN 53 million each.

According to the new energy policy of Poland, the first nuclear unit is to start production in 2033 and have a capacity of 1 GW-1.6 GW. Further blocks will be commissioned every two to three years from that date, until the target of six blocks with a total capacity of 6-9 GW is reached by mid-2040.

However, even after the final location and construction decisions are made, the process will be lengthy and technically complex, so delays beyond the planned 2033 delivery date are a real possibility. Delays of many years are experienced by most of the current nuclear projects in Europe. “This confirms our belief that the announced withdrawal of PGE, Enea and Tauron from the company dealing with the nuclear project has a positive impact on their credit profiles,” Fitch emphasizes.