Nuclear power, together with renewables, will be a key part of our country’s energy mix in the coming decades. Large-scale nuclear power plants and a programme of small modular reactors are just as important for the stability of energy supply.
The future of nuclear power, the state of preparations and conditions for the implementation of individual projects were discussed on Tuesday in Warsaw by the attendees of the ‘Nuclearconference.pl’, organised by the Energy Club, the Faculty of Management at the University of Warsaw and the Energy Institute.
In her message to conference attendees, Anna Łukaszewska-Trzeciakowska, Government Plenipotentiary for Strategic Energy Infrastructure, said that nuclear power could become “the driving force for the Polish economy”. And it will ensure that the primary objective of “a stable energy supply at an acceptable price” is met. “New nuclear power is an investment process of a previously unimaginable scale,” she added. “8,000 people may simultaneously work at the construction site of the first power plant, and more than 50,000 people will be needed to implement the Polish Nuclear Power Programme”.
In Poland, analyses are underway regarding the feasibility of several tens of modular reactors, as well as preparatory works for the construction of three large-scale power plants; the most advanced project is the one planned in Pomerania and being implemented by the Polskie Elektrownie Jądrowe [Polish Nuclear Power Plants] company set up by the State Treasury, with Westinghouse as its technology partner.
A private project is being prepared by PGE together with ZE PAK (Zygmunt Solorz) in cooperation with the Korean corporation KHNP.
The decision is still pending regarding the choice of technology for the second, inland nuclear power plant under the government programme, where the French company EDF has submitted its bid. Presenting the bid at the opening of the conference, Thierry Deschaux, Director General of the EDF Representative Office in Poland, assured that it meets Polish requirements and is competitive. “It is an EPR reactor with a net capacity of 1650 MW, designed with efficiency and safety standards in mind, already licensed in three European countries and in China,” Thierry Deschaux said. He added that the EPR reactor is also characterised by a high degree of flexibility – which is particularly important with a significant share of renewables in the energy mix. “It can go from 100% of capacity to 20% of capacity twice a day,” said the Director General of EDF’s Representative Office in Poland. “We have the resources and support of the existing supply chain in Europe to cope with the construction. These reactors use our proprietary technology, so we do not need any approval or permits to export it.”
Thierry Deschaux assured that the offer for Poland has an integrated character – so the investor has a single partner to talk to – and includes the full scope of work: technology supply, design, construction and support for commissioning – as well as for operation and maintenance. EDF currently operates 56 reactors in France alone, with a total capacity of more than 64 GW. Mr Deschaux mentioned that 75% of the Polish companies that already have experience in the nuclear sector gained it by working with the French industry. In addition, EDF has unique experience in managing the risks of nuclear power plant construction projects so as to reduce the cost of financing them as much as possible. Lower costs of financing result in lower production costs and therefore lower energy prices for consumers.
Thierry Deschaux added that EDF’s bid was supplemented with a 340 MW SMR project. EDF has partnered with Respect Energy in Poland in this field.
Michał Wierzchowski, Director of the Business Development Division at Polskie Elektrownie Jądrowe, a company responsible, among other things, for the investment process for the nuclear power plant in Pomerania, discussed the progress of works. “We are waiting for the environmental permit and hope that it will be issued soon; importantly we have completed cross-border consultations with representatives from countries including Austria, Germany and Denmark, who are not in favour of nuclear power,” he said. “We have also applied for a location decision from the Pomeranian Governor, and we have a general safety decision from the President of the Polish Atomic Energy Agency”.
“Polskie Elektrownie Jądrowe is currently finalising design negotiations with Westinghouse and Bechtel,” Mr Wierzchowski added.
In his opinion, “the permitting process will be key in the coming months; another important matter will be to ensure local content, i.e. participation of Polish companies in the entire investment project. Therefore, we want to have a clear strategy in this area and develop a detailed plan together with the Ministry of Climate and Environment. In addition, we are building a company that will be an investment vehicle,” he added.
Mr Wierzchowski recalled that the construction of a nuclear power plant is a huge undertaking and that there will be several thousand people on the construction site at any one time. This is why it is so important to educate and prepare human resources, and to this end PEJ has so far established cooperation with key universities in the country. But it is not just about nuclear engineers; various specialists and experts will be needed.
During the session, the Director General of the EDF Representative Office in Poland pointed out the importance of nuclear power plants in the production of zero-carbon energy. And he recalled that in 2020 they provided 42% of such energy in the European Union. He believes it is necessary to extend the life of existing power plants and to decide on the construction of new ones to replace those that will be decommissioned in 20-30 years from now. “Due to the war in Ukraine and the energy crisis, the role of nuclear power in Europe has increased in terms of security and independence of supply,” Mr Thierry Deschaux said.
It is not only France that has plans to build at least 6 new reactors, but also Czechia, Slovakia, Slovenia, Finland, Sweden, so the perception of nuclear power has changed over the last two years. According to Mr Deschaux, in order to rapidly decarbonise the energy mix in Poland, it is necessary to replace the large coal-fired power plants – especially Bełchatów and Turów. “That is why we are proposing an EPR with a capacity of 1650 MW, but there is the entire industrial sector, as well as district heating, which also need to be decarbonised and that is what SMRs will serve,” he added.
SMRs are as needed in Poland as large nuclear power plants and they are complementary to each other; they could be a potential solution for the electricity and district heating sectors, as around 70% of heat in Poland is still generated from coal. President of GE Hitachi Poland pointed out that the SMR using GEH’s BWRX 300 technology is capable of generating both electricity and heat. “Our SMR has 300 MW electric capacity and 850 MW of thermal output, so it is a perfect solution for the mix.” She also pointed out other advantages of modular reactors, such as the fact that they can be built in close vicinity of cities, require less land than large-scale power plants, can be built relatively quickly and at a lower cost, and, if they use the existing transmission network, will translate into lower energy and heat prices. “SMRs will be a very good complement to renewables, due to their rapid response to decreasing or increasing energy demand, i.e. the ability to adjust production as needed”.
GE Hitachi has started cooperation with Synthos, who had teamed up with Orlen to form Orlen Synthos Green Energy (OSGE) – a company responsible for implementing the project to build a fleet of BWRX 300 modular reactors in Poland. According to Dagmara Peret, for decades there has not been as much interest in nuclear technology as there is today, particularly with regard to modular reactors. “In fact, there has been a radical change over the last two years,” she added. There is interest in small nuclear reactors in Poland but also in the region, including Romania, Bulgaria, Lithuania and Czechia. BWRX 300 is currently under construction in Canada and this process is well under way, with the developer there, Ontario Power Generation, announcing that it has decided to build further BWRX300 units, to be built sequentially every two years after the first reactor is completed. She also stressed the importance of “building nuclear competence”. “In every region where we have a presence, we develop our competencies by implementing knowledge and expertise from our nuclear centre in Wilmington, North Carolina, USA. We have set up a branch in Poland with headquarters in Warsaw, and here we are working hard to recruit a group of experts; we have ambitious plans to have a around 100 people by next year, including engineers and other experts from our existing GE Vernova competence centre in Poland.”
Mr Szczepan Ruman, CEO of Świętokrzyskie Industrial Group Industria, argued during the session that modular reactors are not only part of the implementation of PEP 2040, but also an opportunity for regional and local development. “Power plants, large or small, should not be seen from the point of view of renewables,” he said. “Our modular reactor can deliver around 150,000 to 200,000 GWh over its entire life cycle, so if it only produces half of the possible energy during this time, adapting to the generation profile of renewables, the unit costs [of energy] in the SMR will be higher.”
Therefore, according to Mr Ruman, the volume of nuclear power produced should be maximised to minimise its cost.
Industria’s CEO believes that since Rolls-Royce’s SMR, with which he has partnered, has the highest capacity of all SMRs currently on offer, at 470 MW, “this should ultimately translate into a lower cost per MWh”. “The agreement with our partner is that we support him to find space for at least 10 SMR units, while Rolls-Royce supports us in building the Research and Development Centre”, Mr Ruman said. “This is particularly important as it seems that the future challenge in the nuclear programme and the bottleneck will be the provision of human resources.”
Robert Paprocki, PSE Management Board Representative for grid integration of nuclear power, asserted during the ‘Nuclearconference.pl’ that nuclear power plants are friendly from the grid perspective. “It is a classical [energy] source, in the sense that it uses traditional synchronous generators, providing reactive power, short-circuit power and inertia in addition to active power, as opposed to other sources increasingly connected to the grid via power electronic systems”, he said. “The issue of building the grid connection is key to exporting power from nuclear plants, and the challenges are that the higher the plant’s capacity, the more lines need to be built. However, this is independent of the technology used and, as the country already has three coal-fired power plants larger than 3 GW in operation, it is feasible for us to connect a nuclear power plant of more than 3 GW”, he added.
He also gave the example that the Bełchatów coal power plant has more than 5 GW of capacity. Furthermore, according to Mr Paprocki, “it is a myth that the Polish system is too small to be able to connect large nuclear power plants”, and this is because the Polish system is synchronously interconnected with the entire continental part of Europe from Portugal to Ukraine and Greece – an area where tens of nuclear power plants are in operation. And their specific features include nuclear safety issues and the fact that they continue to generate heat after shutdown, which has to be properly dissipated.
Mr Paprocki, responding to a question about DC lines from the north to the south of the Polish power grid, mentioned that other sources will also have to be connected in this part of Pomerania – i.e. offshore wind farms with a capacity of 11 GW initially and ultimately up to 18 GW, and this will also be a challenge for PSE. “Without DC lines this energy cannot be efficiently exported,” he added.
Mr Paweł Pytlarczyk, Director of Nuclear Energy Department at the Ministry of Climate and Environment said during the opening session that Poland’s Energy Policy 2040 is now being updated following consultations carried out in June. “It should be ready by the end of this year,” he added.
Mr Pytlarczyk also said that recommendations for SMR technology are being developed by the International Atomic Agency, but there is no reason to change the regulations at this time. “Only perhaps when modular reactors are at the licensing stage of their first designs will such changes occur,” he added.
Providing scientific facilities and appropriately qualified human resources, not only in the field of nuclear energy but in other areas, is also a challenge for the implementation of the Polish nuclear programme.
It was discussed during the “Human resources acquisition and cooperation between universities and business” session; the panellists agreed that coordination of education at government level was needed.
Karen Daifuku of the I2EN International Institute of Nuclear Energy, a special guest of the panel, said that in France nuclear power provides 250,000 direct jobs, but with the construction of new reactors, a further 25% increase in employment is expected by 2030. “This means there is a need for 6,000-10,000 new employees per year, and to achieve this, the French government has introduced programmes to allow universities and the industry to increase the pace of preparation,” said Karen Daifuku. She added that one important issue is to convince young people that the nuclear sector as a workplace is attractive to them. In her view, it is necessary to increase opportunities for apprenticeships and internships 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 programmes should focus on them. But, at the same time, she pointed out that “people already employed in power plants or in their construction have acquired skills that are very useful for the nuclear sector and they could work in the industry after retraining”.
Weronika Zapaśnik, Project Manager for the SMR Programme of the Świętokrzyskie Industria Group Industria believes there is huge potential in Polish education. “We are following the developments and we can see that the education of nuclear power engineers is developing, e.g. at the Poznań and Wrocław Technical Universities there are Master’s degree courses,” she said during the panel. “We want to take an active part in this process. We start by examining the real needs and intend to build our concept in dialogue with the universities.
Weronika Zapaśnik pointed out that there are engineers in our country who have carried out the project in Olkiluoto and Flamanville, and that Rolls-Royce, Industria’s partner in the SMR project, has its own experience in training human resources. “It does not make sense for each university to organise education curricula for the nuclear programme on its own; they should be coordinated and consistent across the country,” said Industria’s representative.
Prof. Krzysztof Kurek, Director at the National Centre for Nuclear Research admitted that he has trouble retaining skilled professionals. “For the past 10 years, we have been rebuilding the competences we lost after the closure of the Żarnowiec project in the 1990s,” he said.
Andrzej Głowacki, President of the National Atomic Energy Agency, said that the agency employs 140 people, including 50 just for the construction of the first power plant. “A total of 110 people will be needed to supervise the construction of the power plant in Pomerania, with additional 50-60 people to supervise the SMR projects and the same number for the PGE PAK and KHNP project,” he said. “Some of the necessary analyses will be carried out by the National Atomic Energy Agency, but some will also be carried out by experts (support organisations) and we will commission these works to them,” he added. The potential for technical and expert support is high.
The National Atomic Energy Agency hires both employees, graduates who want to associate their career with the nuclear power industry, as well as people with experience from various foreign construction sites. “We are able to compete with private operators,” Mr Głowacki added.
Prof. Adam Kisiel, Nuclear Energy Plenipotentiary of the Rector of the Warsaw University of Technology and an academic at the Department of Physics, asserted that every university is interested in cooperation with the nuclear sector. “We are providing a flexible way of studying, for example, for traditional majors we have complementary classes in nuclear energy, so that graduates from other faculties are also prepared for this job,” Prof. Kisiel said.
Arkadiusz Koper from Łazarski University in Warsaw spoke about the launch of a new course in nuclear energy management, preparation, implementation and operation of power plants. “A similar Renewables Management course is already in operation,” the expert said. “Students are hugely impressed by local content when we are talking about 40-50% of projects worth half a trillion zloty in total,” he added.
Prof. Agnieszka Korgul said that the University of Warsaw has a joint course in nuclear energy, but that other faculties also train staff for the energy sector. “We can further educate people who can gain knowledge from the conventional energy sector,” she added. And she assured that the university focuses on the practical aspect, which is why it has established partnerships with PGE and Orlen.
Paweł Gajda from the Faculty of Energy and Fuels at AGH University of Science and Technology in Kraków believes that the continuity of education has been preserved, but at present “it is difficult to find students willing to stay at the university and continue their careers [as academics], so that in 10 years’ time they would teach students, because universities are not financially competitive”. According to Mr Gajda, we will need specialists from many different fields, which is why an interdisciplinary programme is needed. “It is important to create a coherent system of education of human resources and all stakeholders must be included,” said the expert from AGH. “We have established the foundations. Coordination and cooperation with industries is an important element”.
The optimal funding model for the construction of nuclear power in Poland, especially the large-scale plants, will be crucial for its entire development.
How to organise capital for the construction of nuclear power plants was discussed by participants in the panel entitled “Financing nuclear power development” during the “Nuclearpoland.pl” conference. They all believe that the State Treasury would have a very important role in this regard.
The construction of nuclear power plants comes at a gigantic cost, and it is not just about the loans taken out, but their repayment over many years. Dr Waldemar Kozioł of the Faculty of Management at the University of Warsaw pointed out that before last year’s energy crisis it had been assumed that nuclear power expenditures globally would reach a figure of around $500 billion per year in the 2030s. “But it is now clear that a revival is taking place and there is a growing demand for investment and it is already estimated to be worth $100 billion a year, as reported by the International Atomic Energy Agency,” the expert said. “In Poland, on the other hand, by 2050, assuming that reactors are built with a capacity of 12-13 GW, expenditure will reach USD 70 billion, and that is without taking into account the cost of debt servicing,” added Waldemar Kozioł.
Dr Bożena Horbaczewska from the Warsaw School of Economics (SGH) pointed out that the financial model is part of the business model, so we should take a broader look at the problem, not only in terms of where to get the money from, but also how to provide revenue to repay the debt and cover financial costs. She added that as the proportion of equity and external capital changes, the level of risk changes, either higher risk and higher cost of funding or vice versa. “The greatest risk is always borne by the owner, i.e. the investor of the power plant,” said Ms Horbaczewska.
Director of the Energy and Technology Industry Office at BGK Jacek Bogucki asserted that financing low- and zero-carbon investment projects is part of the bank’s business strategy. Bank Gospodarstwa Krajowego, the 4th largest development bank in the European Union, is interested in financing the construction of nuclear power plants, particularly because of the local financial content. “This is an important component of investment, as it makes the project credible for foreign investors and financial institutions. In addition, it would reduce the cost of financing due to the fact that part of the expenditure will be incurred in Polish zloty,” said Mr Bogucki.
He also pointed to risks in the implementation of the investment project, with key ones related to the construction itself, such as budget and schedule overruns. He mentioned that such situations had occurred in both the US and Europe. “Since we are talking about expenses of at least EUR 4.5-5 million per MW of capacity, these are significant costs, so the timing of the investment becomes a major challenge,” added Mr Bogucki.
He also mentioned the risks associated with the volume of electricity produced and the electricity price risk. The introduction of a mechanism to guarantee the offtake of electricity produced and the price would be beneficial from the point of view of investor risk and, consequently, a low final price for consumers.
According to Mr Bogucki, the model of a contract for difference (CfD) as a security for financing is more favourable for wind and PV power. For nuclear, on the other hand, a model similar to that used in the UK would be a better proposition, due to a major participation of the state. “This decreases the investor’s risk,” said BGK’s representative. “This is because the investor shares the risk with the state and both parties are interested in quick implementation. At the same time, the investor is already being rewarded during construction. Such a model will significantly reduce the investor’s cost of capital, and energy would also be cheaper, so consumers will also benefit,” Mr Bogucki added.
Thierry Deschaux, Director General of EDF’s Representative Office in Poland, said that in the 1980s and 1990s investments in France were mainly financed by the company itself, partly with its own funds and partly with loans but without government assistance. “For the Finnish Olkiluoto power plant, the business model resembled a kind of cooperative, formed by later users and with government guarantees. In the UK, on the other hand, the investment at Hinkley Point C, is being developed in partnership with the government, based on a long-term contract for difference. In the cost of power generation by the Hinkley Point C power station, 17% is the cost of its construction and 70% is the cost of servicing the financing,” added Thierry Deschaux. For EDF’s latest project in the UK – the Sizewell C power plant – the RAB model has been used, which involves partial financing of construction by energy consumers, thus reducing the cost of debt financing of the project and ultimately the future price of energy.
The head of EDF’s representation in Poland believes that “the most important thing is that nuclear safety is treated as priority, so the technology must be validated and proven.”When organising financing, you have to think about the operational phase of the power plant; our company can offer support for the operator for up to 60 years i.e. the entire life cycle of the power plant,” he added.
Artur Kucia, Director of the Strategic Client Department – Heavy and Mining Industry at PKO BP bank, argued that “the more risks are identified in the process of investment and operation of the power plant, the cheaper the financing will be and the lower the cost of the whole investment”. “It may be that the investment is well designed and executed, but the risks associated with the selected business model materialise and it turns out that financing has been badly arranged,” Mr Kucia said. In his opinion, this requires a sound assessment of costs and revenues, which are not only expected to provide the best energy price to the end user, but also to generate free funds to repay the loans taken out for construction.
Mr Kucia pointed out the risks associated with the availability of staff, as well as the demand for materials, because until 2035-2040 Poland will be a huge construction site in the energy sector – apart from nuclear power plants, onshore and offshore wind power projects are being implemented, in addition to rail and CPK [Solidarity Transport Hub] projects and a massive defence programme. “This means gigantic demand for steel and cement,” he said. “And it may be a problem to organise the supply and cover the demand; the question is where we will get that steel and concrete from”. In the context of Ukraine’s reconstruction and decarbonisation of Europe, a significant increase in demand is possible with reduced capacity from the supply side.
Adam Juszczak of the Polish Economic Institute spoke during the panel about the financing of small nuclear reactors (SMRs) and the report that PEI’s experts had prepared. “Let us look at this so-called small nuclear with some caution; it is not known how the market will behave in case of complications with these investments,” he added.
NFOŚiGW [Environmental Protection and Water Management Fund] vice-president Artur Michalski said that the fund is more interested in funding small reactors, which can be important to decarbonise the heating sector, for example, rather than large-scale power plants. “We are the largest fund financing energy and environmental investments, and it is this environmental effect that is key, and nuclear power plants are among such investments,” added Artur Michalski.
Adequate transport infrastructure and logistics facilities are essential elements for the efficient construction of nuclear power plants, with an added benefit in Poland through the involvement and participation of domestic entrepreneurs.
Chief Nuclear Officer of Polskie Elektrownie Jądrowe, Philippe Bordarier, mentioned the key infrastructure projects that accompany the construction of the nuclear power plant in Pomerania, and whose implementation is carried out in cooperation with other stakeholders including: the National Road Authority (GDDKiA), PKP PLK [railway network operator] or the Maritime Office in Gdynia. These necessary projects include access roads, a railway line and marine structures. “We are planning to build three reactors, so at the peak of the work there will be thousands of people who need to get to the site on time. Tens of thousands of items will be delivered to site, some even larger than a university auditorium. It all requires very good organisation, coordination between the responsible parties and an appropriate supporting infrastructure”.
Polskie Elektrownie Jądrowe [Polish Nuclear Power Plants] will be responsible for cooperation with the companies involved in the construction of the power plant, so it is particularly important to establish and adhere to a timetable for the delivery of equipment and components. “We will be building the seventh, eighth and ninth AP1000 reactor in the world, so we are drawing on the experience of other countries and projects,” assured 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 design, we build the parts in advance and then deliver them to the construction site,” he added.
Alice Neffe, Director of the Global Affairs Office at ARP [Industrial Development Agency], believes that the implementation of nuclear projects in Poland requires international cooperation to develop technology and infrastructure. “Many EU countries have nuclear power plants in operation; for us it is something new, but we can benefit from the experience of others, especially we need to learn from their mistakes. There is a lot to learn for both the technology providers and us as clients,” Alice Neffe added.
In her opinion, Polish companies also have the opportunity to become service providers for nuclear projects implemented in countries in our part of Europe. For the Polish nuclear programme and the construction of large power plants, a 40% share in the works for Polish companies is realistic. “The absolute minimum includes construction services, organisation of facilities for employees or construction of access roads,” said ARP’s representative. “But not just that. Polish companies are already active in similar international projects. Moreover, 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 yet built nuclear power plants in Poland does not mean we have no experience.
According to Ms Neffe, the Polish industry faces major challenges in the context of nuclear power, and work needs to start now. “The bottlenecks will appear with regard to human resources; when projects overlap, there may not be enough workforce,” she added.
Bogdan Pilch, Director General of the Polish Chamber of Power Industry and Environmental Protection, pointed out that after the Fukushima disaster, regulations related to reactor safety and security were significantly strengthened, so in this context the technical requirements have also changed, also affecting contractors. “It is necessary to support Polish companies so that they are prepared to work on these projects, but what is missing here is above all a decision on the part of the government and the certainty that these projects will be realised. Until there is a clear funding model, there will be many doubters,” the Chamber’s director said.
According to Andrzej Sidło, legal advisor from the Ministry of Climate and Environment, although there are many challenges related to building nuclear power plants, we have most of the national regulations in place. “There was an amendment to the Atomic Law this year to streamline the investment project itself, which could speed up the work by 12-18 months without compromising the quality of the work,” he added.
Prof. Waldemar Kamrat of the Gdańsk University of Technology believes that the development of nuclear power plants requires a comprehensive approach and includes four basic concepts: energy, ecology, economics and education. “The initial outlays will be high, but then we will not have the problem of an emissions tax,” the expert said. “Nuclear power plants are needed in Poland for energy-related reasons and in order to move away from fossil fuels. However, I am afraid that education remains one of the key challenges,” Prof. Kamrat said.
PHOTORELATION
PHOTO BY MARIUSZ SMOLEWSKI
