Nuclear Power in Poland
(Updated October 2016)
- Poland plans to have nuclear power from about 2025 as part of a diverse energy portfolio, moving it away from heavy dependence on coal and imported gas.
- The first nuclear plant will be a joint venture of three utilities and a copper miner, all state-owned.
- Poland earlier planned to have a stake in the planned Visaginas nuclear power plant in Lithuania.
In 2015, Poland produced some 165 TWh gross from 36 GWe of mostly coal plant. Coal provided 133 TWh of the electricity, gas 6 TWh, biofuels 10 TWh (mostly co-fired in coal plants) and wind 11 TWh. Exports balanced imports, and final consumption was 126 TWh, or about 3300 kWh/yr per capita, one of the lowest levels in Europe. (IEA provisional data)
Poland has the largest reserves of coal in the EU (14 billion tonnes); and in 2008, 92% of electricity came from coal, as well as 89% (279,000 TJ) of the nation's heat usage (313,000 TJ). About two-thirds of the country's gas supply (total 14 billion m3) comes from Russia with the price pegged to oil, but this dependence may change with the advent of shale gas domestically. The prospect of increased dependence on Russia rules out any consideration of new gas-fired generation capacity.
Poland has traditionally been a net electricity exporter, mostly to Czech Republic and Slovakia, but recent years has seen a reduction in export levels as domestic demand continues to grow, and the country is likely to become a net importer unless capacity additions are made. In 2014 it has about 38.5 GWe total generating capacity and maximum load is about 25 GWe.
Poland's own electricity consumption is forecast to grow by 54% to 2030, but under the EU's strict climate policy targets the country will need to diversify away from coal. A government report (ARE) compared electricity costs in 2025, and nuclear power was least-cost at 80% and capacity factor and above (€86, dropping to €71/MWh at full capacity, 2013 €).
In February 2012 the state-owned Polska Grupa Energetyczna SA (PGE) adopted a plan to invest over 330 billion zloty ($103 billion) between 2012 and 2035. This would raise its generating capacity from 13.1 GWe, to 21.3 GWe by 2035. Currently, PGE generates two-thirds of its power from lignite, with most of the rest coming from hard coal. By 2035, the company aims to generate about 36% of its electricity using 6 GWe of nuclear capacity, with 11% coming from gas, 14% from renewables, 33% from lignite and 5% from coal. PGE supplies 42% of Poland's electricity now, and expects to increase this to 46% by 2035.
Wind energy has been contentious. In 2015, 7.27 TWh was generated from 5.5 GWe (15% capacity factor) according to government sources, and in June 2016 parliament passed a bill which will virtually eliminate further onshore windfarms.
The overall projection for 2030 is for 161 TWh demand, up 36% from 2013, 23% of this supplied from lignite, 36% from black coal, 12% from nuclear, 9% from natural gas and 12% from wind. Nuclear power is expected to be very competitive assuming €20/t CO2 emission cost.
In March 2015 an agreement was signed by Ukraine’s Ukrenergo distribution company and Polenergia, a Polish counterpart, to export electricity as part of the Ukraine-EU ‘energy bridge’, and related to the Baltic Energy Market Interconnection Plan. This will enable greater use of Ukraine’s nuclear capacity and is to generate funds to pay for increasing that capacity. A 750 kV transmission connection from Khmelnitski to Rzeszow in Poland is envisaged.
The immediate priorities were shale gas exploration and the nuclear program, expected to cost Zloty 56 billion and 80 billion respectively by about 2025. However, ExxonMobil and Chevron have pulled out of exploration in Poland. In 2011 the IEA showed Poland’s shale gas resources as the largest in Europe, at over 5000 billion cubic metres (the US EIA put Poland’s shale gas resources at 5,292 billion m3), and the government quoted reserves of over 750 billion cubic metres as it prepared to release new regulations to encourage exploration and extraction of those. More recent estimates have slashed the shale gas resource estimates to one-tenth of earlier figures, apparently due to unsuitable geology. State gas utility PGNiG is responsible for shale gas development.
In August 2014 a draft energy policy for Poland had two scenarios, both with nuclear power playing a key role. One had nuclear power supplying 50 TWh/yr by 2035, with renewables 60 TWh. The other had stronger growth in nuclear to 74 TWh/yr, and 49 TWh renewables. Both involve a major shift from lignite and black coal which currently provide about 84% of electricity, and most of the air pollution.
In 2015 the government was considering merging its four largest electric utilities into two, to improve competitiveness in the EU market. Plans involve PGE SA, Tauron Polska Energia SA, Energa SA and Enea SA.
Plans for nuclear capacity
The Polish cabinet decided early in 2005 that for energy diversification and to reduce CO2 and sulfur emissions the country should move immediately to introduce nuclear power, so that an initial plant might be operating soon after 2020. A 2009 report to the Ministry of the Economy identified nuclear as the most cost effective method of CO2 abatement of the major generating options. A resolution by the council of ministers then called for the construction of at least two plants in Poland, or at least 4.6 GWe out of a predicted 52 GWe total capacity – to provide 15% of power, with coal's share falling to 60% by 2030. This plan remains in place.
The five-stage government plan in 2009 envisaged legislation for a regulatory framework in 2010 (passed in May 2011), investor, site, technology and construction arrangements over 2011-13, technical plans and site works 2014-15, construction of the first unit 2016-20 and successive units constructed by 2030. The plan was updated in 2011 and again late in 2013, with about three years slippage in schedule.
In order to deliver the government's objectives, PGE, as Poland's largest power group by generating capacity, announced in January 2009 plans to build two nuclear power plants, each with a capacity of 3,000 MWe, one in the north, probably at Zarnoweic, and one in the east of the country. The Ministry of Economy set out a new nuclear power program in November 2010, and this was approved by government in January 2011, and confirmed by the PGE Board in February 2012. PGE estimates that the cost would be EUR 2500-3000/kW for a modern plant, hence total project cost of up to EUR 10.5 billion. It estimates the levelized cost of generating electricity from nuclear power plants is between €6.5 and €6.8 cents per kWh, which "justifies construction of plants under most scenarios."
PGE originally aimed to hold 51% of the projects through PGE Energia Jadrowa (PGE EJ) as part of a consortium with foreign strategic partners which can bring finance from their export credit agencies (ECAs).
PGE would draw up agreements with potential strategic investors once the technology is chosen, since some contenders are closely linked to reactor vendors. PGE planned to finance 15% of the project from its own equity, with strategic partners taking another 15%, while 50% would be sought from ECAs and ‘perhaps 20%’ being commercial debt. PGE Energia Jadrowa SA (PGE EJ) was set up in 2009 to develop nuclear power within the PGE Capital Group.
In January 2010 PGE EJ1 was then set up as a limited liability company with 51% equity from PGE EJ SA and 49% PGE SA. It is responsible for the investment process, site selection, permitting and then building and operating the first nuclear power plant.
In July 2012 copper miner KGHM Polska Miedz SA (31.8% state-owned) and power utilities Tauron Polska Energia SA (30% state-owned) and ENEA (51.5% state-owned) agreed to take minority stakes in the $10.3 to $11.3 billion project with PGE. A letter of intent was signed in September and in June the four companies signed an agreement to continue efforts towards “a draft agreement on purchasing stakes in a special-purpose vehicle for the construction and exploitation of a nuclear power plant." The need for state financial support for the project is widely acknowledged, but the treasury maintains that it is unaffordable. In September 2013 PGE confirmed that it would maintain 70% equity in PGE EJ1, with 10% each being held by ENEA, Tauron and KGHM, and all four parties initialled an agreement accordingly. This was confirmed in September 2014, with commitment to fund 1 billion zloty ($312 million) towards the first phase of 3 GWe. In April 2015 there was a further announcement that the three companies had acquired the 30% equity in PGE EJ1, with PGE retaining 70%.
The government approved legislation amending the country's Nuclear Energy Law to “provide for the establishment of a transparent and stable regulatory framework covering the entire investment process” by the National Atomic Energy Agency (Panstwowa Agencja Atomistyki, PAA), which will oversee construction of the plants. This was passed decisively by parliament in May 2011, by 407 votes to 2. It covers plant operation and the management of radioactive waste and used fuel. Further legislation was passed at the end of June. An IAEA Integrated Regulatory Review Service (IRRS) mission was undertaken at the invitation of the government early in 2013 to scrutinise the regulatory structures. It also identified the need to upgrade grid infrastructure.
Also in 2013, an IAEA integrated nuclear infrastructure review (INIR) mission was undertaken. A follow-up to this in June 2016 concluded that all the recommendations and suggestions from 2013 regarding infrastructure had been implemented. These covered safety, wastes, security and non-proliferation as well as coordination of operational and regulatory functions. An INIR phase 2 mission is envisaged for 2017.
PGE expected to sign a commercial contract about the end of 2013 for the first 3000 MWe plant, so that first concrete is poured in 2016. However, as it became apparent that the EPC contract could not be separated from the choice of a strategic partner and a financing model, PGE decided to set aside the traditional separate EPC contract package approach for the time being, and look at wider options, including a more integrated contracting model and a broader scope for the contract. The revised program, with schedule for the first unit to start up in 2024, was endorsed by the Council of Ministers in January 2014. Each power plant is expected to cost 50-60 billion zloty (€12-14 billion).
Site characterisation is proceeding at Zarnowiec and Lubiatowo-Kopalino in Pomerania. Zarnowiec is inland on a lake, and is where construction of a nuclear plant started in 1980s. Lubiatowo-Kopalino is on the Baltic coast. Choczewo nearby was rejected on social and environmental grounds.* Following a public tender process, in January 2013 PGE EJ1 awarded an $81.5 million contract to WorleyParsons to carry out site characterisation, licensing and permitting for the project, which it expected to take to 2016. However, in December 2014 PGE EJ1 terminated the contract, citing slow progress, and took over the task itself. This delayed the project further.
* A 2009 shortlist had Zarnowiec, Kopan and Lubiatowo/ Klempicz as most likely. Sites in Nowe Miasto and Pilica (Mazovia province) and Belchatow were also being considered. Gaski in West Pomerania was considered from 2011 but dropped off the list about 2013.
In February 2014 four bidders submitted tender offers to PGE EJ1 to provide technical assistance as owner’s engineer for the program. These were AMEC Nuclear UK, Exelon Generation Co, a Mott MacDonald-AF Consult consortium and a URS Polska-Tractebel Engineering consortium. In July the company announced its selection of AMEC Nuclear UK, now AMEC Foster Wheeler. The owner’s engineer will help select the EPC contractor, oversee project management and supply chain contract management, as well as regulatory aspects.
The entity PGE EJ1 is set up to build the first plant and it will be future operator and licensee. PGE aims to have one main contractor, responsible for nuclear island, conventional island, civil engineering, balance of plant and site civil works, in line with IAEA guidelines. It will also need to offer some financing. PGE expected to make a final investment decision on the two plants early in 2017, including site and technology. Final design and permits for the first were expected to be ready in 2018, allowing construction start in 2020. The first unit was then expected to be operational in 2024, the second in 2029. However, in mid-2015 the transmission operator said that PGE projected 2029 for the first unit. The second power plant is scheduled for operation in 2035. PGE estimates that conditional contracts will be signed in mid-2019 in its integrated proceedings flowsheet, so technology and vendor decision is expected 2018-19.
Early in 2015 PGE told the Ministry of Economy that government-guaranteed long-term contracts for selling power were the best way to set up the project to enable financing. PGE said: “Having described and justified a catalogue of potential support mechanisms, it had singled out contracts for difference (CfD) as the mechanism that should be dedicated to nuclear energy... It is assumed that this type of mechanism should apply market tools in a manner similar to the contracts for difference mechanism used in the United Kingdom... PGE strongly believes that today’s energy-only market does not support such capital intensive investments as new nuclear build,” and CfD is the best way to minimize market risk for the investment. “The CfD both provides the needed degree of certainty
to the investor with regard to future revenues over a long timeframe, as well as protects the rate payers from potential overcompensation. The fact that this mechanism has already been accepted by the European Commission with regard to the British project also supports our view that it is the most appropriate instrument to use in our case." However, in June 2016 the new government rejected the use of CfDs as being too costly, and said that it favoured maintaining high dependence on coal.
In October 2016 the government outlined “plans to develop new nuclear technologies connected to nuclear co-generation and high temperature reactors.” A study by Poland's National Centre for Nuclear Research had found that a high-temperature reactor (HTR) would be a "promising concept for the next generation of nuclear power plants" in Poland.
Planned nuclear power plants
|Zarnoweic or Choczewo
||c 6000 MWe
In November 2009 France and Poland signed a joint declaration on energy, environment and climate that calls for France to assist Poland in the construction of nuclear power plants. PGE then signed an agreement to work with EdF to investigate using EPR technology for Poland, and Areva said that it would bid in conjunction with EdF. A similar non-exclusive agreement was signed with GE Hitachi early in 2010, regarding ABWR and ESBWR technology. Westinghouse has signed a similar agreement for its AP1000. Russian technology is not under consideration. PGE EJ1 said in November 2015 that five companies had expressed interest in bidding: GE Hitachi, Kepco, SNC-Lavalin, Westinghouse and EdF/Areva. The tender planned will include the reactor technology, engineering, procurement and construction services, fuel supply, investment by a potential strategic partner, and debt financing. The tender qualification phase is expected to be in mid-2016, and selection of an investor in 2019.
Poland had four 440 MWe Russian VVER-440 units under construction in the 1980s at Zarnowiec, but these were cancelled in 1990 and the components were sold. The site remained a leading contender for at least 1500 MWe of capacity.
In July 2006 Lithuania invited Poland to join with Estonia and Latvia in building a new large reactor in Lithuania, to replace the Ignalina units being shut down at EU insistence. Polish participation would justify a larger and more economical unit. In February 2007 the three Baltic states and Poland agreed to build a new nuclear plant there, initially of 3200 MWe. Lithuania as host would have 34% of the project and Poland, Latvia and Estonia 22% each. At least one unit of the project was expected to be operating by 2015. Total cost would be some €6 billion. E.On earlier expressed interest in investing in such a unit. Poland said that unless it has access to at least 1000 MWe of the project, later increased to 1200 MWe, it would not be worth building the transmission lines to Poland.
In July 2008 the Lithuanian government with energy companies from Latvia, Estonia and Poland (Latvenergo, Eesti Energia and Polska Grupa Energetyczna) established the Visaginas project development company Visagino Atomine Elektine (VAE) for the new 3200-3400 MWe nuclear power plant. Lithuania holds 51% of this, and the others 16% each, but the JV will be reconstituted later as a project implementation company with different share split related to long-term equity. Though located close to the Soviet-era Ignalina plant, the new one will be called Visaginas after the nearby town of that name. Lithuania wanted at least 34% of the new plant (1090-1160 MWe), Poland wanted 1000 MWe, while Latvia and Estonia wanted 400-600 MWe each. However, only one reactor is now envisaged, at a cost of about €4 billion, and completion date has slipped well beyond 2020. In December 2011, PGE withdrew from the project, saying that VAE's conditions were unacceptable to PGE, and it wanted to focus on its own plans anyway. PGE also said it would not buy any power from Russia's (now stalled or aborted) Baltic plant in Kaliningrad. (Further details in the information paper on Lithuania.)
Regional transmission links
Meanwhile, and apart from possible Polish participation in the Baltic states nuclear plant, a high-voltage (400 kV) 1000 MW DC PowerBridge or LitPol Link costing €250-300 million to improve transmission capacity between Lithuania and Poland is to be built, the first 500 MW stage by 2015. It will be half funded by the EC. This follows inauguration of an interconnector between Estonia and Finland - Estlink, a 150 kV, 350 MW DC cable costing €110 million and also supported by EC funding.
A further major transmission link, of 700 to 1000 MWe is proposed undersea between Sweden and Lithuania, to allow power from the new joint reactor to be exported to Scandinavia.
The State Enterprise for Neutralisation of Nuclear Waste (ZUOP) has been operating for many years in connection with two research reactors.
In 1998 it identified possible sites for a deep geological repository, and will establish an underground research laboratory to prepare for long-term placement of used fuel. The National Atomic Energy Agency (PAA) is nominating five potential locations: Lanieta, Klodawa, Damaslawek, Jarocin and Pogorzel.
ZUOP operates the Rozan waste facility. Mazowieckie and Voivodship also have some waste storage facilities. The site for a new low- and intermediate-level waste store is to be decided in 2016.
Regulation and safety, international links
The Nuclear Energy Law was amended in 2011 to “provide for the establishment of a transparent and stable regulatory framework covering the entire investment process” by the National Atomic Energy Agency (PAA). It reports to the Minister of Environment.
PAA has signed cooperation agreements with the US Nuclear Regulatory Commission (NRC), the French Autorite de Surete Nucleaire (ASN), and expects also to do so with the new South Korean Nuclear Safety and Security Commission (NSSC). In March 2010 a nuclear cooperation agreement related to nuclear safety and a legal and regulatory framework for a nuclear industry was signed with Japan.
Poland joined the Global Nuclear Energy Partnership (GNEP, now IFNEC) in September 2007 and the OECD Nuclear Energy Agency (NEA) in November 2010.
In July 2010 a nuclear cooperation agreement was signed with the USA.
Research & development
The National Centre for Nuclear Research (NCBJ) has a 30 MWt multi-purpose research reactor – Maria – in operation. This started up in 1974 at Swierk, south of Warsaw. It was modified in the 1980s and resumed regular operation in 1993 as part of a European network of reactors for production of molybdenum-99. In 2012 the Centre proposed making this, at least in its materials test role, a satellite of the CEA’s 100 MWt Jules Horowitz Reactor (JHR) in France. JHR is under construction by the CEA at Cadarache in southern France and is expected to be in regular operation in 2014. It is being built and will be operated in the framework of a “consortium agreement” among several organizations, including Spain’s Ciemat, Belgium’s SCK, Czech Republic’s NRI, Finland’s VTT, Israel’s IAEC, India’s DAE, and Japan’s JAEA. NCBJ aspires to join this team.
An earlier 10 MW research reactor, EWA, started up in 1958 and was decommissioned in 1995.
The Centre is also keen to promote construction of a high-temperature gas-cooled reactor (HTR) for industrial applications such as coal gasification and fertilizer production.
A Polish Institute of International Affairs (PISM) survey in August 2014 (N=1000) showed public support for building the country’s first nuclear power plant at 64%. Of these, 57% cited its potential for providing increased energy independence for the country as a reason for their support. Economic benefits were less frequently cited: 42% of pro-build respondents cited employment opportunities, while 26% and 24% respectively cited technological progress or the involvement of Polish companies in the project. Some 63% of those in favour of the nuclear option said they would support investment in nuclear capacity for Poland even if the country could meet its energy demand by buying low-priced power from its neighbours. The study found that the most prominent group among those supporting the construction of a nuclear plant was young, highly-educated individuals with higher incomes living in the largest cities. The study also found a clear regional pattern, with the highest support for nuclear coming from those in the east of the country. Previous polls conducted by Poland's independent Public Opinion Research Centre (CBOS) showed maximum support of 50%, in 2009. According to PISM, the current political crisis in Ukraine is the most likely reason behind the apparent Polish surge in nuclear popularity, with fears over the potential threats to Polish security turning around an ongoing decline in public support since the Fukushima accident of 2011.
A public opinion poll in December 2006 carried out for the National Atomic Energy Agency showed that 60% supported construction of nuclear power plants to reduce the country's dependence on natural gas and to reduce CO2 emissions. In contrast to NIMBY attitudes elsewhere, 48% said they would favour such a plant being built in their neighbourhood because of its immediate local benefits including lower power cost. A September 2009 poll showed that 70% of Poles would support having a nuclear power plant within 100 km of their homes.
The application of safeguards in Poland under the NPT safeguards agreement INFCIRC/179, in force since October 1972, was suspended on 1 March 2007, on which date the Euratom agreement of April 1973 entered into force for Poland.
D.W.Kulczynski, Planning for a Nuclear Poland, Nuclear Eng. International, April 2014.