Nuclear energy, along with renewables, will be a major part of our country’s energy mix for decades to come. Large nuclear power plants are just as important for the stability of energy supply as SMR programs.
Last Tuesday the participants of the nuclearconference.pl discussed the future of nuclear power, the state of preparations and conditions for a successful implementation of various projects. The conference was organized by the Energy Club, the Faculty of Management at the University of Warsaw and the Energy Institute.
In her message to the conference guests, Anna Łukaszewska-Trzeciakowska, the Government Plenipotentiary for Strategic Energy Infrastructure said that nuclear power could become a ” flywheel of the Polish economy.” And it will ensure the achievement of the basic goal of „stable energy supply at an acceptable price”. „New nuclear energy is an investment process on a scale previously unimaginable,” she added. „At the same time, 8,000 people can work on the construction of the first power plant, and more than 50,000 people will be needed to implement the Polish Nuclear Energy Program,” she assured.
In Poland, analyses of the possibility of building several dozen modular reactors and preparatory work for the construction of three large-scale power plants are underway, and the most advanced ones concern an investment planned in Pomerania and implemented by Polskie Elektrownie Jądrowe established by the state treasury, whose technological partner is Westinghouse. The private project is being prepared by PGE together with ZE PAK (owned by Zygmunt Solorz) in cooperation with the Korean concern KHNP.
The government has not yet decided what technology it would pick for its second inland nuclear project for which France’s EDF has already made an offer. When Thierry Deschaux, Executive Director at EDF Representation in Poland, was presenting it during the opening of the conference he said the offer met Poland’s great expectations and was competitive. „It is a 1,650 MW net EPR reactor, designed for efficiency and safety standards, already licensed in three European countries and in China,” Deschaux said. He also added that the EPR reactor was also characterized by great flexibility, which is especially important in cases where renewables have a significant share in the energy mix. „It can go from 100% capacity to 20% twice in one day,” said the EDF Executive Director. „We have the resources and support of the existing supply chain in Europe to cope with the construction. The technology behind these is owned by us, so we don’t need any permission for exporting it,” he stressed.
Mr. Deschaux assured that the offer for Poland was integrated – so the investor has one partner only – and covers the full range of works: technology supply, design, construction and start – up support-as well as operation and maintenance. EDF currently operates 56 reactors in France with a capacity of more than 64 GW. The director said 75 percent of the Polish companies that have experience in the nuclear sector today have gained it by cooperating with the French industry. In addition, EDF has unique expertise in managing the risks of nuclear power projects in order to reduce their financing costs as much as possible. Lower financing costs mean lower production costs and therefore lower energy prices for consumers.
Thierry Deschaux added that EDF included in the offer a 340 MW SMR project. In this regard, EDF took up cooperation with Respect Energy in Poland.
The conference’s opening session was titled „Nuclear Energy in View of the New PEP 2040”.
Michał Wierzchowski, Director for Business Development at Polskie Elektrownie Jądrowe, which is responsible for the investment process of the nuclear power plant in Pomerania, spoke about the progress. „We are waiting for the environmental decision and hope that it will be issued soon, importantly we have completed cross-border consultations with representatives from, among others, Austria, Germany and Denmark which are not supporters of nuclear energy,” he said. „We have also submitted a request for a location decision by the Pomeranian Voivodeship, and we also have a general decision of the president of the PAA in the field of security,” he enumerated.
„Polskie Elektrownie Jądrowe is currently finalizing negotiations on the design with Westinghouse and Bechtel,” added director Wierzchowski.
In his opinion, „in the coming months, the key will be the licensing process, as well as ensuring local content, that is, the participation of Polish companies in the entire investment'”. „Therefore, we want to have a clear strategy in this area and together with the Ministry of Climate and Environment to develop a detailed plan. In addition, we are building a company that will be an investment vehicle,” he added.
Director Wierzchowski recalled that the construction of a nuclear power plant was a big undertaking, and that there would be several thousand people at the construction site at any given time. That is why education and training of personnel was so important, to this end Polskie Elektrownie Jądrowe has so far established cooperation with key universities in the country. But it’s not just about nuclear engineers, specialists and experts from other fields will be needed as well.
During the session, the EDF Executive in Poland stressed the importance of nuclear power plants in the production of carbon-free energy. He recalled that in 2020 EDF provided 42 percent of this is type of energy across the European Union. He believes that it was necessary to extend the life of existing power plants and make a decision to build new ones that will replace those extinguished in 20-30 years. „Due to the war in Ukraine and the energy crisis, the role of nuclear energy in Europe has increased in the context of security and independence of supply,” said director Thierry Deschaux.
Not only France has plans to build at least 6 new reactors, but also the Czech Republic, Slovakia, Slovenia, Finland, Sweden, which shows that within two years the perception of nuclear energy has changed. According to Deschaux, in order to quickly decarbonize the energy mix in Poland, it is necessary to replace large coal – fired power plants-especially in Bełchatów and Turów. „That’s why we are proposing an EPR with a capacity of 1650 MW, but there is a whole industrial sector, as well as the heating sector, which also needs to decarbonize and this will be made possible by SMRs,” he said.
Dagmara Peret, VP Country Executive at GE Hitachi in Poland, believes that SMRs are just as necessary in our country as large power plants and are a potential solution for the electricity and heating industries, since in Poland 70 percent of heat is produced from coal. The CEO of GE Hitachi Polska pointed out that an SMR produces both energy and heat. „Our SMR has 300 MW in electrical capacity and 750 MW in thermal capacity, so this is the perfect solution for the mix,” Peret explained. „They can be built fairly quickly and at a lower cost, and energy and heat prices will be lower,” she promised.
She also pointed to other advantages of modular reactors, such as the fact that they could be built near cities and required a smaller area than large-scale power plants. „SMRs will be a very good complement to RES, as they can quickly reduce energy generaion , regulate production adequately to one’s needs,” added the president of GE Hitachi Polska.
The company cooperates with the Orlen Group, which has formed Orlen Synthos Green Energy with a private partner and is preparing projects for the entire fleet of BWRX 300 modular reactors.
According to Dagmara Peret, for decades there has not been as much interest in nuclear technology as there is today, especially in the field of modular reactors. „The last two years have seen a radical change,” she added. And she mentioned Romania, Bulgaria, and Lithuania. „In Canada, the construction of a BWRX 300 is underway and this process is advanced at about 20 percent, and the investor there has decided to build more in two years,” Dagmara Peret said.
During the session, she also stressed the importance of „building nuclear competences”. „In every region where we are present, we develop training centers. In Poland, by the end of the year, we will employ a group of experts – 50 people, and next year there will be about 100 people,” the GE Hitachi VP added.
President of the Świętokrzyskie Industria Group, Szczepan Ruman, argued during the session that modular reactors were not only important for the implementation of the PEP 2040, but also an opportunity for regional and local development. „Power plants large or small should not be perceived from the point of view of RES,” he said. „Our modular reactor can supply about 150-200 thousand GWh throughout its life cycle, so if it produces only half of the possible energy during this time, adapting to the life cycle of RES, then the unit costs at the SMR will be higher,” he said.
Therefore, according to President Ruman, it is necessary to maximize the amount of energy produced from a nuclear power plant in order to minimize its cost.
The Industria President believes that since the Rolls Royce SMR, with which he started cooperation, has the highest capacity from among all other SMRs, i.e. 470 MW, „in the end it should translate into a lower production cost per 1 MWh”. „According to the agreement with our partner, we support them to find locations for 10 SMRs, whereas Rolls Royce supports our endeavor to build a Research and Development Center,” Szczepan Ruman said. „This is particularly important because it seems that in the future the nuclear program’s main challenge and bottleneck will be to ensure staff,” he explained.
Robert Paprocki, Representative of the Board responsible for Nuclear Integration at PSE, ensured during the conference that from the point of view of the grid NPPs were the way to go. „It’s a classic source, unlike other sources-renewable sources,” he said. „Constructing the connection is of key importance for evacuating the power from NPPs, however the challenge is that the bigger the capacity, the more needs to be built. However, a nuclear power plant with a capacity of more than 3 GW is not a problem for us,” he added.
And he gave an example that the Bełchatów coal-fired power plant, which has more than 5 GW of capacity, so – in the opinion of director Paprocki – „it is a myth that the Polish system cannot be connected to a nuclear power plant.” Whereas the details are about nuclear safety and the fact that after disconnection they generate heat, which needs to be evacuated in a specific way.
Director Paprocki reminded that in Pomerania there will be other sources to connect – offshore wind farms with a capacity of 11 GW and perhaps even 18 GW, and this will also be a challenge for PSE. „Without a direct current line, you can’t get this energy out,” he added.
Paweł Pytlarczyk, Director of the Department of Nuclear Energy at the Ministry of Climate and Environment, said during the inaugural session that Polish Energy Strategy until 2040, after consultations in June, is now being updated. „It should be ready by the end of the year,” he added.
Director Pytlarczyk also said that the International Atomic Energy Agency was working on recommendations for SMR technology, but there was no reason to change the rules. „Only perhaps when the modular reactors are at the licensing stage of the first projects, such changes will take place,” he added.
Recruitment and cooperation between the academia and businesses
Providing scientific facilities and appropriately qualified personnel, not only in the field of nuclear energy but in various fields, is also a challenge in the implementation of the Polish Nuclear Program.
This was discussed by the participants of the panel titled: „Development of Human Resources Acquisition and Cooperation between Universities and Businesses,” where they all admitted that it was necessary for the training to be coordinated at the government level.
Karen Daifuku of the I2EN International Institute of Nuclear Energy was a special guest of the panel, and said that in France, nuclear power directly provides 250,000 jobs, but in connection with the construction of new reactors, further employment growth is expected – by 25 percent by 2030. „This means 6-10 thousand new employees need to be hired a year, and in order to achieve this, the French government has introduced programmes that allow universities and industry to increase the pace of preparation,” said Karen Daifuku. She added that one of the important issues was to convince young people that the nuclear sector as a workplace was attractive to them. In her opinion, it was necessary to increase the possibility of conducting internships and apprenticeships that will lead to permanent employment.
Karen Daifuku noted that there are, for example, problems in attracting people from particular professions, such as welders, and training programs should focus on them. But at the same time, she pointed out that „people already employed in power plants or during their construction have acquired very useful qualifications in the nuclear sector and could work in it after retraining”.
Project Manager of the SMR program of the Świętokrzyskie Industrial Group Industria, Weronika Zapaśnik believes that there is a huge potential in Polish education. „We are monitoring what is happening and the education of nuclear power engineers is developing, for example, at the Poznań and Wrocław Universities of Technology, there are MA studies,” she said during the panel. „We want to take an active part in this process. We start by examining real needs and intend to develop our idea in dialogue with universities,” she said.
Weronika Zapaśnik pointed out that in our country there were engineers who participated in the projects in Olkiluoto and Flamanville, and the company Rolls Royce, which is a partner of the industry in the SMR project, has its own experience in the field of personnel training. „It does not make sense for every university to independently organize education programs for the needs of the nuclear program, they should be coordinated and consistent across the country, ” the industry representative said.
Director at the National Centre for Nuclear Research, prof. Krzysztof Kurek admitted that he has „trouble keeping good professionals.” „For 10 years we have been restoring the competences that we lost after the closure of Żarnowiec in the 1990s,” he said.
„Vice-President of the State Atomic Energy Agency Andrzej Głowacki said that he employs 140 people, including 50 people-only for the construction of the first power plant,” he said „In total, 110 people will be needed to supervise the construction of the power plant in Pomerania and 50-60 people to supervise the SMR projects and the same number for the PGE PAK and KHNP projects,” said Andrzej Głowacki. „Some of the necessary analyses will be carried out by the State Atomic Energy Agency, but some will also be carried out by experts (support organizations) and we will commission these works to them,” he added. Vice-president of the State Atomic Energy Agency Andrzej Głowacki believes that there is no training program for engineers to study the aging of materials during the existence of the power plant. „We do not know what material problems we will have, and this will be a Polish problem – not the investor’s. We have about 400 companies that could participate in a nuclear project. It was not possible to find a company from this group to modernize the Maria reactor for PLN 20 million. Some companies seem to have no knowledge on this topic,” he said.
Prof. Adam Kisiel, Plenipotentiary of the Rector of the Warsaw University of Technology for Nuclear Energy, and a researcher at the Faculty of Physics assured that every university was interested in cooperation with the nuclear sector. „We provide a flexible way of studying, for example, in traditional courses, complementary classes in the field of nuclear energy, so that graduates of other faculties are also prepared for this work,” said the professor.
Paweł Gajda from the Faculty of Energy and Fuels at the AGH in Kraków believes that it was possible to maintain the continuity of education, but now „it is difficult to find students who want to stay at the university and continue their careers, so that in 10 years they could educate students, because universities are not competitive when it comes to salaries”. According to Paweł Gajda, we will need specialists from many different fields, which is why we need an interdisciplinary program. „It is important to create a coherent staff education system and all stakeholders must be included in it,” the AGH expert said. „We have the foundations. Coordination and cooperation with industry is an important factor,” he stated.
Financing the development of nuclear energy
The optimal model for financing the construction of nuclear energy in Poland, especially large-scale, will be crucial for its success.
During the talk „Financing nuclear energy”, at the conference „Atom for Poland” the panelists discussed how to amass capital for the construction of nuclear power plants. Everyone recognized that the treasury would have a very important role in this matter.
The construction of nuclear power plants involves enormous costs and it is not only about the loans taken out but also about their long-term repayment. Waldemar Kozioł, PhD., from the Faculty of Management of the University of Warsaw pointed out that before last year’s energy crisis, it was assumed that expenditures on nuclear energy on a global scale would reach an amount of approx. USD 500 billion annually in the 2030s. „But now we know that there is a renaissance and growing demand for investments, and their value is already estimated at USD 100 billion a year, as reported by the International Atomic Energy Agency,” said the expert. „In Poland, by 2050, assuming that the reactors with a capacity of 12-13 GW will be built, the expenditure will reach USD 70 billion and this does not include the cost of debt servicing,” added Waldemar Kozioł.
Bożena Horbaczewska, PhD., from SGH pointed out that the financial model was part of the business model, so we should look at the problem more broadly not only in the context of where to get money, but also how to provide income to pay off debt and cover financial costs. She added that with the change in the share of equity and external capital, the level of risk changes, either higher risk or higher financing costs. „The biggest risk is always taken by the owner or investor of the power plant,” said Dr. Horbaczewska.
Jacek Bogucki, Director of the Energy and Technology Office at BGK, assured that financing low-and zero-emission investments was part of the bank’s business strategy. Bank Gospodarstwa Krajowego, which is the fourth largest Development Bank in the European Union, is interested in financing the construction of nuclear power plants, especially due to the local financial content. „This is an important element of the investment, as it makes the project credible in the eyes of foreign investors and financial institutions. In addition, it would reduce financing costs due to the fact that part of the expenses will be incurred in Polish zlotys,” said Director Bogucki.
He also pointed out the risks in the implementation of the investment, considering the key ones related to the construction itself, such as exceeding the budget and not meeting the schedule. He recalled that such situations occurred both in the United States and in Europe. „If we are talking about spending at the level of at least EUR 4.5 – 5 million per 1 MW of capacity, these are significant costs, so the schedule of investments becomes the main challenge,” added Director Bogucki.
He also pointed to the risks associated with the volume of sales of electricity produced and the risk of electricity prices. The introduction of a mechanism guaranteeing the receipt of the electricity produced and the price would be beneficial from the point of view of the investor’s risk and, as a result, offer a low final price for consumers.
According to Director Bogucki, the model of a differential contract as a way to secure financing is more beneficial for wind and PV energy. For nuclear power, on the other hand, a better proposal would be a model similar to the one used in the UK, due to the strong participation of the state. „Because then the risk of the investor decreases,” said the representative of BGK. „The investor shares the risk with the state and both parties are interested in quick implementation. At the same time, the investor during construction is already rewarded. Such a model will significantly reduce the cost of investor capital, and energy would be cheaper, so consumers will also benefit from it,” Jacek Bogucki added.
Thierry Deschaux from EDF, said that in the 1980s and 1990s, investments in France were financed mainly by the group itself, partly with its own funds and partly with loans, but without government assistance. „In the case of the Finnish power plant in Olkiluoto, the business model resembled a kind of a cooperative, created by later users and with guarantees from the government. In the UK, the investment in Hinkley Point C is being carried out in cooperation with the government and on the basis of a long-term differential contract. The generation costs at Hinkley Point C comprise of the construction costs at 17 percent, and debt servicing at 70 percent,” Deschaux said. In the case of EDF’s latest project in the UK – Sizewell C-the RAB model has been used, which assumes partial financing of the construction by energy customers, which allows reducing the cost of debt financing of investments, and therefore the price of energy in the future.
The head of the EDF representative office in Poland believes that „the most important thing is that nuclear safety is treated as a priority, so the technology must be approved and tested.” „When organizing financing, you need to think about the operational phase of the power plant, as a company we can offer support to the operator for up to 60 years, that is, for the entire cycle of the plant’s existence,” he added.
Artur Kucia, Director of the Strategic Client Department-Heavy Industry and Mining at PKO BP, argued that „the more risks identified in the process of investment and operation of the power plant, the cheaper the financing and the lower the cost of the entire investment”. „It may be that the investment is well designed and executed, but the risks associated with the chosen business model will materialize and it will turn out that the financing was poorly organized,” Director Kucia said. In his opinion, it is necessary to conduct a reliable assessment of costs and revenues, which are not only to give the best price of energy for the final customer, but also to generate free funds to repay loans taken out for construction.
Director Artur Kucia pointed out the risks associated with the availability of personnel, as well as with the demand for materials, because by 2035-2040 Poland will be a large construction site in the energy sector – in addition to nuclear power plants, wind energy projects on land and at sea are being implemented, and railway and CPK investments and a powerful weapons program will be implemented. „That means huge demand for steel and cement,” he said. „And it may turn out that the problem will be to organize supplies and meet demand, the question arises where we will get steel and concrete. In the context of the reconstruction of Ukraine and the decarbonization of Europe, a significant increase in demand with reduced supply capacities is possible,” he predicted.
Artur Michalski, vice-president of NFOŚiGW, said that the fund is more interested in financing small reactors, which can be important for decarbonization of heating, for example, rather than large-scale power plants. „We are the largest fund financing energy and ecological investments, and this ecological effect is key, and nuclear power plants belong to such investments,” added Artur Michalski.
Infrastructure construction
Ensuring adequate access infrastructure and logistics facilities is essential for the efficient construction of nuclear power plants, and in Poland this will be an additional benefit through the involvement and participation of domestic entrepreneurs.
During the panel, Philippe Bordarier, Chief Nuclear Officer at Polskie Elektrownie Jądrowe, mentioned the basic infrastructure investments that accompany the construction of the nuclear power plant in Pomerania and which are being implemented in cooperation with such entities as GDDKiA, PKP PLK or the Maritime Office in Gdynia – an access road, a railway line and marine construction are needed. „We are planning to build three reactors, so at the peak of the work there will be thousands of people who need to reach the construction site on time. Tens of thousands of items will be delivered to the site, some even larger than this university hall. Everything therefore requires very good organization, coordination between the responsible actors and the appropriate accompanying infrastructure” he said.
Polskie Elektrownie Jądrowe will be responsible for cooperation with companies involved in the construction of the power plant, so it is of particular importance to establish and maintain a schedule for the supply of equipment and components. „We will be building the seventh, eighth and ninth AP 1000 reactors in the world, so we are drawing on the experience from other countries and projects,” said Philippe Bordarier, Chief Nuclear Officer at Polskie Elektrownie Jądrowe. He also said that the project in Pomerania would include two levels of work-local and national. „The reactor itself is a modular structure, we build parts in advance and then deliver them to the construction site,” he added.
The provision of communication infrastructure and logistics facilities is essential for the efficient construction of nuclear power plants, but in Poland they will have an additional dimension through the participation of national entrepreneurs.
Director of the Office of International Affairs at ARP S. A. Alice Neffe believes that the implementation of nuclear projects in Poland requires international cooperation to develop technology and infrastructure. „In many EU countries there are nuclear power plants, this is new in our country, but we can benefit from the experience of others, especially we have to learn from their mistakes. Both technology providers and we as consumers have a lot to learn, ” Neffe added.
In her opinion, Polish companies also have a chance to become service providers for nuclear projects implemented in the countries of our part of Europe. In the case of the Polish nuclear program and the construction of large power plants, the share of Polish companies in the work at the level of 40% is achievable. „The absolute minimum is construction services, organization of facilities for employees or construction of access roads,” said the representative of ARP. „But not only that. Our domestic companies are already active in similar international projects. In addition, we have good engineers with experience in projects in other countries who can also take part in the development of new nuclear technologies. The fact that we have not built nuclear power plants at home does not mean that we do not have experience,” she said.
According to the director of Neffe, the Polish industry faces great challenges in the context of nuclear energy, and work must begin now. „The bottlenecks will be at the staff level, when the projects are happening at the same time, there may be no-one to work on them,” she added.
Bogdan Pilch, Director General of the Chamber of Commerce for Energy and Environmental Protection, pointed out that after the Fukushima disaster, regulations related to the safety and security of reactors were significantly strengthened, therefore, in this context, technical requirements have changed, which impacts contractors. „We need to support Polish companies so that they are prepared to take part in these investments, but we lack primarily decisions from the government and confidence that these projects will be implemented. Until there is a clear funding model, there will be many doubters,” said the director of the Chamber.
According to legal adviser Andrzej Sidło from the Ministry of Climate and Environment, although there are many challenges in the construction of nuclear power plants, we have most of the national regulations in this area. „This year there was an amendment to the Atomic Law to improve the investment itself, which can speed up the work by 12-18 months without compromising the quality of the work,” he added.
Prof. Waldemar Kamrat from the Gdańsk University of Technology believes that the development of nuclear power plants required a comprehensive approach and includeds four basic concepts: energy, ecology, economics and education. „The outlays for the beginning will be large, but then we will not have a problem with the tax on emissions,” said the expert. „Nuclear power plants are needed in Poland for energy reasons, as well as the need to move away from fossil fuels. However, I am afraid that one of the main challenges remains education,” prof. Kamrat stated.
Full video recording of the Nucelarconference.pl is available on the site: nuclearconference.pl