Energy Nuclear 25 January, 2022 8:30 am   
Editorial staff

Westinghouse: U.S. will show a financing package for Polish nuclear energy (INTERVIEW)

Westinghouse and Polskie Elektrownie Jądrowe Westinghouse and Polskie Elektrownie Jądrowe. Photo: Wojciech Jakóbik.

This August the U.S. government is to show a financing package made of equity and investment package – states Joel A. Eacker, Westinghouse vice president for new plant projects and energy systems. – We are looking how could we be a financial investor, but if that is the case that would be a small part of investment, not 49 percent – he adds. – . It is a strategic project for Poland in the interest of all political forces – says Mirosław Kowalik, Westinghouse Electric Poland president of the board. What could be built in cooperation with Polish companies in the context of Poland’s Nuclear Energy Program?

Joel A. Eacker: Large part of what we do is modular. We have several major modules that are made of steel and concrete. We build them in small sections and assemble on site. There is a number of suppliers in Poland that build modules for offshore, oil and gas sectors. We believe we can work with them to meet nuclear standards and cooperate.

We see issues with capacity all around the world because of crisis. Does Poland has enough capacity?

We have done labor studies in Poland. Construction part starts few years from now and manufacturing earlier. Container vessel needs to be built 41 months before starting real construction.

Poland wants to start construction in 2026, right?

Let’s start from 2033 when the first reactor in Poland is to be ready. We need to fill the base for construction in 2028. We need to excavate and build piling of the mains structures in January 2026. 2028 date is key for us. 41 months before, in the middle of 2024 we need to start acquiring long lead equipment. Before then and today there is a time to look at the procedures and standards of the manufacturers we are talking to and look at our standards and do gap analysis. We will work with them to meet those standards. We are cooperating with the Ministry of Climate in Poland which is funding training for the suppliers who want to enter the nuclear business. We will help with our technical resources and regulatory, industry agencies to show the standards. We will help Polish understand the standards, how to meet them and work with us. It takes time. We are starting early to create awareness in Polish business circles so they will be able to meet the requirements. If someone likes to work with us, we are ready to help. Those companies from the first tier will be able to introduce second and third tier on condition those other entities lower in supply chain also meet our requirements. We are talking with various companies.

What are the requirements?

We have very strict quality requirements when it comes to steel. Assembling the modules needs to meet wielding and tolerance standards from the design. We need to test everything to show to the regulator that our design is made in accordance with requirements. Safety is very important. We will have to work with such companies with safety, quality and paperwork. Records need to be validated by them before they are transferred to regulator.

How many companies from Poland could be involved in this project?

That could be hundreds of Polish companies.

What could be the percentage of Polish content in it?

Mirosław Kowalik: It might be over half of the project, or up to 60-70 percent, in labor and construction. If you assume like 65 percent of local content that means lot of money and jobs in Poland. That’s billions of Polish PLN, new income and market that could make companies from Poland to work not only with the Polish program but also in other regions. Westinghouse and Bechtel partners will be involved in whole region. We need skilled technicians to work with us. We are starting to cooperate with Polish academia. We have visited five major universities and offered an internship program. This year we announced internship program, invited students to meet our engineering team in Pennsylvania to give them prospects for future carrier.

Joel A. Eacker: Polish engineers could be involved in projects In Czech Republic, Slovenia and Ukraine. We want to establish a supply chain in Central and Eastern Europe. We have a Global Services Center in Kraków with 160 jobs and growing. Westinghouse have 2000 people on site. Those people could be moved from Poland to other projects, so it is a great career opportunity. First there are six reactors in Poland, then its five in Ukraine. Both of those are timelines starting from early thirties to early forties. Slovenian reactor is about to be online when the first Polish reactor is to start. Czech reactor is a bit slower. In some ways it is really good because we can setup suppliers. We will have one supplier or manufacturer specialized for specific modules. We will get people to specialize and do well with individual items to bracket them up. We generally hire quite a few local engineers, we do not bring people in because it is not practical. We can create a local market for nuclear energy. My wife and I move to Warsaw this spring. That is how committed we are. We are reliable partner for Poland. We are building a sustainable presence in this country for long term.

We hear the same arguments from French EDF. Why should Poland choose Westinghouse?

We have the safest reactor in the world with passively safe system. It needs no operator in case of an incident. One other reactor potentially has it. It is WWER reactor from Russia.

You even have an office in the same building like Polskie Elektrownie Jądrowe (PEJ) does. To start you need to be chosen as a technological partner. Then there is a need for a financing scheme. How can it look like and what would be the role of WEC?

If the Polish government will pick AP1000 plant, this August the U.S. government is to show a financing package made of equity and investment package. They are working with Polish government right now but we are not included in those talks. We are looking how could we be a financial investor, but if that is the case that would be a small part of investment, not 49 percent. We have investment banks, industrial investors that we are talking to, and pension funds. Once you reach a commercial operation you have great opportunities to get financing by subjects interested in dividend producing activities. Energy utilities are great example of that. According to an intergovernmental agreement we have 18 months to deliver concept execution report which includes financial package and Front End Engineering Design with costs estimations. It is hundred percent financed by Americans, 70 percent by the government and 30 percent by WEC. The cost of this survey is 10 bn dollars. That is our investment in Polish nuclear project.

Do you perceive any impact of possible political changes in Poland?

Mirosław Kowalik: We are focusing on preparing a solid proposal. That is a starting point to convince anyone and our goal. We believe that nuclear energy will play an important role in Europe’s plan to reach carbon neutrality in 2050. There is a good prospect in Europe that nuclear business will be the part of climate policy, like it is in EU taxonomy project from European Commission right now. According to current Polish Energy Program until 2040 nuclear energy is necessary to have a clean and safe energy supplies. It is a strategic project for Poland in the interest of all political forces.

What is the next milestone?

Obviously it is a choice of technology. Then the licensing of the reactor and approval of the site. That is a critical path of the project timeframe.

If the offer is ready in August, what is the time to take a decision in Poland?

Mirosław Kowalik: Minister Piotr Naimski said about September. We see a great cooperation with Polish lawmakers that are preparing the best regulations associated with nuclear safety, pre-work and licensing. Any delay of Polish decision process might be an issue for 2033 target. Right now we believe it is challenging but viable.

What could be the consequence of any delay in Poland?

The biggest risk in whole schedule is to convince regulator PAA that our reactor is safe in Poland. We did that in Americas, Asia and Europe.

What about small modular reactors then?

There are no licensed SMR in Europe or America. There are lot of vendors. Even WEC is having its own SMR design. We do not pursue it at this point. I would like to see a licensed SMR somewhere.

Is it possible before 2033?

If you look at the history, the answer is ‘no’. The AP1000 plant needed a decade to get a license. To my knowledge there are only small amount of SMR projects submitting licensing documents. Big reactors are desolate. SMR’s are proposed to stay in the middle of population centers. No one has regulations to address that. There is a time needed to create regulations. Our micro-reactor is 5GW designed to be used in desolate sites. We will need up to 7 years to get a license for it and to use it to put it on a truck and move somewhere where there is a lack of energy. We are focusing on this micro-reactor and big AP1000 plant. We are talking about SMR’s but go ask the SMR vendors how many contracts they have.

Interview by Wojciech Jakóbik