Energy Nuclear 11 August, 2020 10:00 am   

The idea on how to finance Poland’s nuclear plants is here

The idea for a financial model to develop Poland’s nuclear program is here. The Ministry of Climate opened public consultations on the draft regulation to amend the Polish Nuclear Power Program. It includes the long-awaited financial model – writes Bartłomiej Sawicki, editor at

The goal of the Polish Nuclear Power Programme (PPEJ) is to build between 6 and 9 GWe of nuclear generating capacity in Poland using verified, large-scale pressurized water reactors of the III and III+ generation. By 2045 the optimum nuclear capacity will be about 7.7 GW net, which means nuclear generation will constitute 27 percent of the energy mix. A broader perspective on the analysis suggests that it would be profitable to build about 10 GW net nuclear capacity by 2050. According to the document, the average total cost of energy generation in 2020 is PLN 352 per MWh. In 2045 the costs will be lowest in a scenario where nuclear energy will be developed through slow optimization (PLN 334 per MWh), and the highest if there is no nuclear power plant (PLN 358 per MWh). It seems that in the long run, the costs in this model may go down even further provided this type of generation is continuously developed (PLN 317 per MWh in 2050).

Financial model

Across the world nuclear investments are realized in various ways depending on the policy of a given country, the local energy market and the investor. Years ago, one of the financial models that was considered was the so-called contract for difference, which ensures a guaranteed energy price where the end user covers the difference between the original price and the market price. However, the contract for difference is probably out of the question as it actually generates significant costs and fixed fees, which are paid for by the consumer. Today new power plants (NPP) are mostly financed through such models (or rather ways the energy will be sold) as: power purchase agreements (PPA), e.g. in the USA, UAE and Turkey; contracts for difference (CfD), e.g. in Great Britain, also planned in Romania and Czechia; regulatory asset base (RAB), e.g. in Great Britain, as well as cooperatives (e.g. Mankala in Finland and Exeltium in France).

Poland’s business model for nuclear power plants is to be based on:

– one reactor technology for all power plants,
– one, strategic co-investor associated with the technology supplier,
the State Treasury purchasing 100 percent of shares in the special purpose vehicle that will make the investment in nuclear energy in Poland (PGE EJ1),
– the State Treasury keeping at least 51 percent of shares after one, strategic co-investor linked with the supplier of the technology is chosen.

According to the document, selecting a strategic business partner (strategic co-investor) at an early stage will make it easier to organize cheap financing to bankroll the construction of a nuclear power plant. “The foreign investor will contribute their experience in construction and/or exploitation of NPPs and will increase the credibility of the project. This will make it possible to acquire attractive export credits and other sources of capital,” the draft says. Such an approach is to ensure strategic partnership at a political and economic level and significantly accelerate the preparations for nuclear projects.


As stated in the document, the experience learned during localization and environmental research shows that considering PWR, BWR and PHWR reactor technologies at once may make it harder to choose the nuclear technology, impede the administrative process and increase costs. Limiting the number of technologies to this group at an early stage of the project is to simplify and shorten these processes and lower costs. This solution was used in, among others, Czechia during the construction of new nuclear units at the Temelin nuclear power plant and for the planned block no. 5 at the Dukovany nuclear power plant. The recommended technology is PWR, due to the reasons listed above this choice also pertains to 1000 – 1650 MW net reactors that are available on the market. Poland’s priority with regard to its energy system is to quickly replace the high-emission coal sources with zero-emission generation. This needs to be done to prevent an electricity supply gap, which may arrive right after 2030.

Other types of reactors include the Small Modular Reactors (SMR), which are still in development and whose commercial introduction may take place around 2040. The document says that the SMRs cannot replace large nuclear power plants. The technical specifications of SMRs show that they are in no way superior to large reactors and in some aspects are significantly worse, e.g. with regard to thermodynamic efficiency, which means they generate, among others, more radioactive waste per every MW hour of produced energy. However, the draft document also states that the government would monitor the progress in developing SMRs across the world. If such projects are implemented in the future and if there is enough experience in constructing and exploiting SMRs, it will be pertinent to consider using this technology for heat generation, but with NPPs that are also able to produce heat. Apart from pressurized water reactors, the document also mentions high temperature reactors (HTR), which cannot be used as an alternative to large-scale light-water reactors, but could be utilized as a source of technical heat. A research project about HTRs is currently underway at the National Centre for Nuclear Research.


According to the document, the NPPs will be most probably located in the coastal areas – Lubiatowo-Kopalino and Żarnowiec, where environmental and location surveys are most advanced. The arguments for locating the NPPs in those areas include, among others, significant demand for electricity and lack of large, available generation sources in the region, access to cooling water, the vicinity of the sea, which enables transport of large-size cargo. Locations which are currently occupied by Poland’s main power plants are also being considered. Those include Bełchatów and Pątnów, because of the dense transmission and transport network and other infrastructure, their location in the center of the country, as well as the fact that building an NPP there will make it possible to maintain jobs in the region once the existing power plants are shut down.
 The remaining potential locations are (in alphabetical order): Chełmno, Choczewo, Chotcza, Dębogóra, Gościeradów, Karolewo, Kopań, Kozienice, Krzymów, Krzywiec, Lisowo, Małkinia, Nieszawa, Nowe Miasto, Pniewo, Pniewo-Krajnik, Połaniec, Stepnica-1, Stepnica-2, Tczew, Warta-Klempicz, Wiechowo, Wyszków.


According to the schedule, the technology for Poland’s power plants will be chosen in 2021. In 2022 the first NPP is to acquire an environmental and location decision and a contract with the technology supplier and the main developer is to be signed. In 2023 the initial and preparatory works are to start, a connection agreement with the transmission system operator is to be signed and the works on choosing the location for the second NPP are to start. In 2025 the NPP1 is to receive a construction permit from the President of the National Atomic Energy Agency (NAEA). In 2026 permits for the construction of the NPP1 are to be issued and its construction is to begin. In 2028 an environmental and location decision on the NPP2 is to be issued. In 2029 initial and preparatory work in the location of NPP2 are to start. In the same year a connection agreement for the second NPP is to be signed. In 2031 the NPP2 is to receive a construction permit from the President of the NAEA. In 2032 the NAEA President is to issue permits for a start-up procedure. A nuclear start-up procedure and synchronization of the first NPP1 reactor are to take place as well. In the same year the second NPP is to receive a construction permit and its building is to start. In 2033 the NAEA President is to issue operating license and the first NPP is to start working. In 2034 NPP1’s second reactor should receive start-up, nuclear start-up and synchronization permits. In 2035 the NAEA President is to issue operating licenses for the second NPP, which is to start operation in the same year. In 2036 NPP1’s third reactor is to receive start-up permits and its nuclear start-up and synchronization are to take place. In 2037 the President is to issue operating licenses for NPP1’s third reactor and its operation is to start. In 2038 the first reactor in the second NPP is to receive start-up permits and a nuclear start-up procedure and synchronization are to take place. In 2039 the NPP2’s operating licenses are to be issued and its first reactor is to start working. In 2040 NPP2’s second reactor is to receive permits for a start-up and its nuclear start-up and synchronization are to take place. In 2041the second reactor of NPP2 is to receive operating licenses and it is to start operating as well. In 2042 permits for start-up for the third reactor of NPP2 are to be issued. A nuclear start-up and synchronization of the reactor will also happen. Finally in 2043, the third reactor will receive operating licenses and will start operating.

The biggest cost is not investing in nuclear energy

The document offers four scenarios on external costs in Poland’s energy sector. The strategic version assumes the development of more stable and more predictable offshore wind farms and highly available NPPs, which would make it possible to limit the increase in system and environmental costs to PLN 8.3 bn a year in 2045. The assumed slow optimization offers a still stable, but higher external cost of PLN 10.4 bn a year in 2045. “The highest external costs, and the tendency for further increases are seen in scenarios where nuclear energy is not developed,” the documents says.

The plan is to adopt the document in the third quarter of the year, while public consultations are to take place until 21 August. However, since the decision on the technology is to be made next year, time is already running out. The government’s declarations suggest that the Americans are the most probable partners.