Competition Heats Up for Poland’s Nuclear New Build

• Competition Heats Up for Poland’s Nuclear New Build
• Westinghouse Signs Localization Agreements with Polish Firms
• Czechs Want to Scrap Deadlines in EU Plan for Green Nuclear

Competition Heats Up for Poland’s Nuclear New Build

A team composed of Westinghouse and Bechtel are preparing a technical proposal to build six full size (AP1000) nuclear reactors at two sites ( 3 at one, 3 at another) in Poland.

It is believed that three of the sites will be on the Baltic Sea coast for access to cooling water and delivery of large reactor components by sea-going barge. The other site(s) were not immediately disclosed indicating an ongoing review of alternatives may still be underway.

Poland plans to build modern, large PWR-type reactors. The Polish Energy Policy assumes that in 2033 the first block of the Polish nuclear power plant with a capacity of approx. 1,000-to-600 MWe per unit will be put into operation. The entire nuclear program provides for the construction of six units with a capacity of up to 9 GWe will be completed by 2040 according to Polish government plans. The Polish government has made several attempts to move ahead with these basic objectives, but has failed to develop a credible financial plan to pay for them each time.

Certainties and Uncertainties in Financing the Plan

According to a claim made by the Westinghouse / Bechtel team, reported by a Polish English language wire service, is that the US government will make an offer of financial assistance for the project next August. There has been no independent confirmation from a US government agency either in the form of loan guarantees, export credits, or direct financial assistance.  Separately, Polish sources told the wire service the government will take a 51% equity stake in the project assuming the selected team comes up with the rest of the money.

The government expects the team that builds the reactors will finance them and operate them. The Polish government expects that the partner in the nuclear program will take up 49% shares in a special company, will provide adequate financing, and will participate not only in the construction but also in the operation of nuclear power plants.  The Polish government is reported to have said it will make a decision on which offer to accept in Fall 2022.

There has been no word so far from the Polish government on rate guarantees or a strike price for power to insure financial success for the plants once they are generating electricity. This is a massive uncertainty for any of the bidders and will surely be included in negotiations for contracts to build the plants.

Westinghouse said its proposal will include possible construction schedule for all six blocks and identify the most important technical and financial risks of the entire project. A risk management plan will be presented. An analysis of the impact of nuclear power plants on the entire Polish economy will be prepared along with a summary of the benefits Poland will gain from a large, zero-emission energy source.

Joel Eacker, vice president of the new projects division at Westinghouse, is cited as the source by the wire service based on a Westinghouse news release.

Other Offers are on the Table

In October 2021, French EDF made an initial, non-binding offer. The offer includes the construction and operation of four or six EPR 1600 MWe reactors in 2-3 locations. France has been lobbying heavily for the business. EDF, the French state-owned nuclear enterprise, has also promised a new, more cost effective design of its EPR reactor. The current design has not done well in terms of the construction metrics of staying on schedule and within budget at sites in Finland and France.

An offer based on APR1400 reactors is expected later this winter to be presented to the government by South Korean’s KHNP. The firm met with journalists in Warsaw to challenge Westinghouse in the bid for nuclear power in Poland.

The Koreans said they made a promise of a price lower by 30%. Assuming Westinghouse offered its AP1000s, hypothetically, at $5,000/Kw or roughly $5.5 billion for each unit, the South Koreans would be offering an astonishing $3.85 billion per unit. If the price is $6,500/Kw, then KHNP would be cited a hypothetical offer of $4.6 billion per unit. Either way, the pricing would be significantly lower than the $20 billion South Korea pitched for building four 1,400 MWe units for the UAE.

With experienced managers and a supply chain in place in South Korea, a lower price is feasible, but the claim of a 30% difference is remarkable. In its favor two of the UAE four units have been commissioned and two more are expected to be completed in the next 2-3 years.

Also, Jaehoon Chung, president of KHNP, told the wire service that as Poland has a 123 Agreement with the U.S., there is no barrier to using U.S. licensed nuclear technologies in his firm’s bid for the Polish business.

Rolls Royce is also marketing its 470 MWe mid-range reactor to the Polish Government. The UK firm has engaged a high powered American consulting firm to promote its reactor to European nations.

IP3 chief executive Mike Hewitt, a retired US Navy rear admiral, told The Daily Mail in October 2021 that eastern European nations – including Poland, the Czech Republic, Latvia, Hungary, Estonia and Bulgaria – are developing ‘aggressive plans’ for nuclear. IP3 is advising large Polish energy supplier ZE PAK on the development of a plan for nuclear plants to power its factories.

He said Rolls-Royce’s project was “among the frontrunners,” adding: “Rolls-Royce is uniquely positioned as a British brand-named company which is used to a factory approach in stamping out aircraft engines. If the UK commits to allow the build of the first three or four reactors, you can move into production, then it is in prime position to be the reactor of choice for other countries.”

Significantly, there are no similar reports about offers from Rosatom, Chinese State Owned Enterprises or Japanese firms. China pitched building two 1,000 MWe Hualong One reactors in 2017, but has not been visibly marketing it to Poland since then.

Polish Industry Seeks SMRs

Separately, in September 2021, state-owned copper producer KGHM signed an agreement with US nuclear technology developer NuScale for four 77-megawatt (MW) reactors, of which the first could come online in 2029. The company, which is Poland’s second-largest consumer of electricity, said it wanted to shield itself against increasingly volatile energy prices.

Michal Solowow, a chemicals tycoon and Poland’s richest man, and Zygmunt Solorz, the owner of the ZE PAK energy plant complex in Patnow, announced a joint venture for up to six 300MW nuclear reactors around the end of the decade.

GE Hitachi, whose GEH BWRX-300 is in contention to provide the SMR at Patnow, said it could launch its first Polish SMR “at latest in 2030,” according to the company’s CEO Jay Wileman. BWXT Canada said recently it has an agreement, if the contract goes through, to build long lead time components for 10 of the 300 MWe SMRs.

Caveats to the Future of Nuclear Energy in Poland

Not everyone is convinced these ambitious plans by the Polish government will come to fruition much less in the short time frames being promised by various vendors.

“It is still possible to build a nuclear power plant by 2033,” says Jakub Wiech, editor-in-chief of Energetyka24.pl, an energy news service. But, in practice, one can see a number of circumstances that significantly reduce the feasibility of a nuclear power plant in such a short time.”

In October 2020 the Trump administration offered Poland $18 billion to build six nuclear reactors with the express objective of keeping China and Russia out of the market. The Biden administration has not taken any steps to move ahead with that promise nor is it expected to do so. The move would be politically unsustainable given Biden’s push for massive infrastructure investments in the U.S.

Poland has a brittle, increasingly unpopular, and authoritarian government that is both unpredictable and ruthless in its efforts to stay in power. The current government is locked in a series of self-destructive disputes with the European Union over various governance and judicial issues.

In response the EU has told Poland if it continues down this road it may lose access to certain lines of funding from Brussels and that could include energy projects of all kinds, not just nuclear. The EU’s recent tilt towards financing nuclear power projects might be blocked for Poland by these disputes.

None of these conditions are predictors for the kind of long term stability needed to build and commission a major nuclear reactor project or a fleet of them over a 10-15 year period.

Reference: WNA Pofile of Poland’s Pursuit of Nuclear Energy

Prior Coverage on this blog

• Poland Seeks SMRs for Process Heat Applications

• Poland Counts Costs for New Nuclear Reactors

• Poland Plans 300 MW SMR with GE-Hitachi

Westinghouse Signs Localization Agreements with Polish Firms

According to English language wire services in Poland, based on a company press release, Westinghouse Electric Company has signed a cooperation memorandum with ten companies in Poland.

The agreements concern cooperation in the potential construction of six AP 1000 reactors as part of the Polish Nuclear Power Program and future projects using AP 1000 technology in the region of Central and Eastern Europe.

Westinghouse said it is ready to support Poland in achieving its energy policy goals. Miroslaw Kowalik, president of Westinghouse Polsk said, “We will act on the basis of our experience in implementing investments in nuclear technologies around the world.”

“These tasks will be additionally supported by a team of almost 200 employees employed at the Westinghouse Global Shared Services Center in Krakow, which is involved in the global activities of our company. We want to provide Poland with the best technology for the implementation of tasks related to counteracting climate change, as well as to meet the energy needs of the Polish economy.”

Czechs Want to Scrap Deadlines in EU Plan for Green Nuclear

(Reuters) The Czech Republic is pushing for the European Union to scrap proposed deadlines for investment in nuclear energy. It says the deadlines unnecessarily constrain long term use of the technology.

In a draft proposal released last month, the EU Commission allows gas and nuclear investments to facilitate an eventual transition to fully renewable output, but suggests a deadline of 2045 beyond which investments in existing and new nuclear projects would not be allowed. The proposal is a pile of unworkable ideas at best because of its embedded magical thinking about 100% renewables.

Reuters reports that, “The Czech Republic requests to leave out the statutes which suggest a transitory nature of nuclear energy, namely the 2045 deadline for new plants operating permits, and 2040 for the existing plants,” the Czech government’s response read, according to the Hospodarske Noviny daily newspaper.

Reuters quoted Industry Minister Jozef Sikela who said that Prague welcomed the Commission’s proposal to count nuclear and gas among sustainable sources, but asked for changes. “We have asked for adjustments to the proposal to make it realistic and non-discriminatory,” he said.

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