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John Daly

John Daly

Dr. John C.K. Daly is the chief analyst for Oilprice.com, Dr. Daly received his Ph.D. in 1986 from the School of Slavonic and East European…

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Poland Gears Up to Build First Nuclear Power Plant

Among the few "gifts" not forced upon Poland during its more than four decades as a Soviet satellite state was a nuclear power plant (NPP).

But now, given the European Union and NATO state’s surging energy needs, Poland is about to construct its first NPP.

Why the retrograde step?

Simple – burgeoning energy needs.

Poland currently depends on coal to supply 94 percent of its energy needs but authorities in Warsaw want to diversify the country’s energy matrix with nuclear, liquefied natural gas (LNG) and shale gas projects to align its economy with the European Union's climate goals.

Poland currently has a generating capacity of more than 27 gigawatts, but two-thirds of this capacity is in the form of antiquated coal-fired electrical generating plants built decades ago by the nation’s Communist authorities. Energy analysts observe that the nation must substitute 15 gigawatts of its Communist-era facilities, currently generating nearly half of the country’s current electrical output, with modern plants as well as build about 15 gigawatts of new capacity within the next two decades to keep pace with steadily rising demand.

According to state- owned Polska Grupa Energetyczna SA (Polish Energy Group, or PGE) power company, Poland’s largest power producing company, Poland’s first NPP, due to come online by 2020, is set to be located near the Baltic. According to PGE chief Tomasz Zadroga, three potential sites near the coast at Zarnowiec, Choczewo and Gaski, were picked from around a hundred proposed locations, with final choice due to be announced in about two years, when the winner of the bidding race to build the plant will also be unveiled. In discussing PGE’s decision to situate the proposed NPP near the coast Zadroga observed that the region has both a “deficit of installed capacity and favorable cooling conditions” because using sea water to cool reactors is cheaper than lake water.

PGE, in charge of the country’s atomic energy program, is planning to solicit tenders for constructing the 300 megawatt NPP before the end of 2012, which, along with a second proposed NPP, will cost an estimated $29.4 billion. PGE Nuclear Energy spokesman Marta Lau said, "Work on announcing a tender procedure for choosing a supplier is underway. The precise date of its announcement will be made public as soon as is possible."

PGE nuclear unit deputy head Jacek Cichosz told reporters, "The final decision on the site will be taken in 2013" and retiring PGE Chief Executive Tomasz Zadroga added that PGE wanted to retain a minimum 50-percent stake in the NPP.

Three international consortiums, eager for any business in the wake of the 11 March 2011 nuclear debacle at Tokyo electric Power co.’s (TEPCO) six-reactor Daichi Fukushima power station, have already expressed an interest in the project. The contenders include French companies Electricite de France S.A. (Electricity of France, or EDF), the second largest French utility company and Areva, the U.S.-Japanese Westinghouse Electric Company LLC concern and the U.S.-Japanese GE Hitachi Nuclear Energy Americas firm.

But the tender process has hit some snags, not the least of which is that PGE is not only undergoing many management personnel changes but awaiting a new president as well and the subsequent development of a new comprehensive company strategy. Analysts are speculating as to what impact a new management board of the group and its subsidiary will have in making final decisions about the NPP. Zadroga held the post of president at three different companies: PGE as well as its subsidiaries PGE Nuclear Energy and PGE EJ1, the latter responsible for the construction of PGE’s first NPP.

Areva Poland director Adam Rozwadowski was philosophical, commenting, "We understand the reasons why delays are occurring. In our opinion they could be related to personnel changes in many positions at PGE. Of course we would prefer for the announcement to come sooner; we are waiting."

But a NPP is not the last of environmental bon-bons that PGE has in store for Polish energy consumers, as on 27 January the company signed letters of intent with state-owned oil and natural gas company Polskie Gornictwo Naftowe i Gazownictwo (Polish Petroleum and Gas Mining, or PGNiG), one of the largest companies in Poland, Tauron Polska Energia S.A. (Tauron Polish Energy) energy holding company and KGHM Polska Miedz (KGHM Kombinat Gorniczo-Hutniczy Miedzi), one of the world’s largest copper and silver mining companies, to explore for shale natural gas using the controversial hydraulic fracturing (fracking) process.

Nuclear power or fracking?

Polish energy consumers will be spoiled for environmentally-friendly energy options.

On the good side – there has never been a tsunami in the Baltic.

Yet.

By. John C.K. Daly of Oilprice.com




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