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Energy Nuclear 20 April, 2018 11:00 am   

Polish atom like K2 in winter. Impregnable?


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Nuclear energy is to be, according to the Ministry of Energy, one of the ways to reduce the emission intensity of the Polish power industry and save the mining sector. Meanwhile, the road to resolution seems to be more and more winding and slowly reminiscent of climbing in the Himalayan peak of K2 in winter – writes Piotr Stępiński, editor of BiznesAlert.pl.

Without an atom, there will be no reduction in emissions

During the last Nationwide Energy Summit in Gdańsk, its participants once again heard about the necessity of building a nuclear power plant, but in the wake of them, once again, there were no details. The current energy minister, Krzysztof Tchórzewski, pointed to the need to transform the Polish energy sector, which is determined by, among others, the tightening energy and climate policy of the European Union, striving to decarbonise the economies of the Member States. During the speech, he stressed that without nuclear energy, it is impossible to achieve an emission indicator of 550g / MWh. – We will not achieve it without an NPP. In order for the share of coal in the mix to fall well below the current level of 80 percent after 2040, the atom should be in it – he added, adding that the element supporting the energy transformation is the construction of the Polish atom.

There are still no decisions

Meanwhile, we still do not know when we will get to the final decision in this matter. The dates have been moved many times. According to the recent announcements of representatives of the Ministry of Energy, the decision on this matter is to be taken by the end of the year, if “we want to keep the agreements with the European Commission”. In turn, in Gdańsk, as asked by journalists for a more precise date, Minister Tchórzewski stated that it should be taken this year, or not at all. Although he admitted earlier that for the past two years, “we could not decide” on the atom. Are we ready now?

All the more so because in the report published at the beginning of the year, the Supreme Audit Office criticized the implementation of the Polish Nuclear Power Program (PPEJ). In its opinion ,,there was no implementation of tasks specified in the PPEJ, related to the preparation of the construction of the first Polish nuclear power plant. Ministers of the economy, and then energy (in 2014-2017), having sufficient arguments for the development of nuclear energy, did not direct applications to the Council of Ministers to take strategic decisions on the launch of the construction of a nuclear power plant “. Can it be different now? According to BiznesAlert.pl, on 17 April a meeting was to be held, after which the final decision on the fate of the Polish atom was to be made. However, it could not resolve such key issues as finding a financing model or a nuclear technology provider.

Poland could have an NPP if it were not for the Soviets

However, this does not change the fact that, according to Minister Tchórzewski, Poland could have an atom, were it not for communism, “which left its mark on our energy mix”. – We got coal power from the Soviet Union. At the end of the 1980s, we had 95 percent coal-based energy. Instead of an NPP, Stalin built us the Palace of Culture and Science – said during the summit in Gdańsk. Let me remind you that the Żarnowiec power plant was tried unsuccessfully to build in the eighties. The Palace of Culture and Science was opened in 1955.

What’s more, according to the head of the energy ministry, Poland did not get a nuclear power plant because the Soviet Union considered it too dangerous because it could use this technology for other purposes. Let me just remind you that almost a year ago, during the European Economic Congress, the minister in a similar way explained the lack of an NPP in Poland. However, now it is no longer the Soviets who are responsible for the lack of an NPP in Poland, but the lack of effective actions of our decision makers. It has been 24 years since the last Soviet soldier left our country.

Financing needed immediately

The construction of a nuclear power plant is a capital-intensive investment. In May last year, the Ministry of Energy stated that a partner would be needed to build the said installation, which would provide only technology. It was supposed to be responsible for providing technology and for providing financing. On the latter issue, the ministry stressed that the project was to be financed from national funds. Minister of Investment and Development, Jerzy Kwieciński, spoke in a similar vein, arguing that Poland could afford an atom in the corridors of the Gdansk summit. BiznesAlert.pl described various visions of financing the atom – with the participation of PKN Orlen and Lotos after the merger. A potential investor can become the Polish Development Fund, which was recently announced by its president – Paweł Borys. This was met with positive reception from Minister Tchórzewski. However, even their measures may turn out to be insufficient and a further question on the Polish atom will be needed.

They could also come from bank loans. Banks, however, cautiously approach energy financing, given the uncertainty of the regulatory environment and a clearly defined energy strategy that does not exist, as well as the decision about the atom. For investors, the most important is the return on capital, and for financial institutions, the certainty of repayment of loans taken. All the more so because in August last year, Minister Tchórzewski said that by 2040, we should build 4,5 GW for around PLN 80 billion, although earlier it was said that 3 GW would cost 40 – 60 billion. However, in the Polish Nuclear Program Program awaiting the update, 6 GW is mentioned for PLN 100 billion. Meanwhile, according to the latest estimates of the minister of energy, by 2040 our country wants to build blocks with a capacity of 4,5-5 GW, which are to cost 70 – 75 billion. In this situation of uncertainty, it is difficult to expect some financing.

Atom like K2 in winter

– Too long decisionlessness costs much more than a slightly wrong decision – said Minister Tchórzewski recently. The current formula of relations with the European Commission in the context of energy and climate policy, based on messages and declarations, is beginning to run out. This model has worked well in the past and allowed Poland to buy time to make a decision on the future of energy. Will the Polish NPP prove to be what for the K2 himalists in the winter, an unreachable mountain?