Courtesy IDN-InDepth NewsReport
LONDON (IDN) - Despite widespread scepticism about nuclear energy in the aftermath of Fukushima disaster, Poland, which is heavily dependent on coal and imported gas, has decided to go in for its first nuclear power plant.
The move comes some three decades after the the Council of Ministers passed a decree in January 1982 on the construction of the Żarnowiec Nuclear Power Plant, which would have been the first in the country. But due to changes in the economic and political situation in Poland after 1989, as well as public protests in the late 1980s and early '90s which escalated in the wake of the Chernobyl disaster, the construction was cancelled.
Meanwhile, four state-owned companies have signed a letter of intent for participation in the preparation, construction and operation of that plant and knowledgeable sources expect signing of an agreement by the end of the year.
The companies involved are Polska Grupa Energetyczna (PGE), Tauron Polska Energia and Enea, together with copper giant KGHM Polska Miedz. They have signed a letter of intent concerning the acquisition of shares in PGE EJ 1 – a company set up by PGE specifically for the preparation of an investment process for the construction and operation of a nuclear power plant in Poland.
World Nuclear News reports that the four companies plan to reach an initial agreement about the partners' project-related rights and obligations, based on the assumption that PGE will play the leading role in the investment project. At this stage, the letter of intent, which is valid until the end of 2012, but could be extended, does not represent an obligation for the partners to participate in the project.
The agreement notes that PGE has already begun preparatory work on construction of the plant, including activities related to the identification of, and compliance with, international standards regulating nuclear power investments.
Commenting on the company's decision to allow other companies to participate in the project, president of PGE Krzysztof Kilian said, "This may have a positive impact on increasing the project's business effectiveness, e.g. risk diversification or a more efficient management of the key elements of the investment process."
He added, "It is a crucial moment for the nuclear power generation sector in Poland because the country's largest companies have expressed their intention to work together on this project of key importance for the national economy."
Tauron Polska Energia president Dariusz Lubera noted that, as part of its strategy to diversify fuels in power generation, the company "plans to have a few hundred megawatts of nuclear generation capacity in its portfolio around 2025." He said, "We have been willing to participate in Poland's first nuclear project for a few years."
"We have to find other sources of energy which allow us to continue our operations in 20 to 30 years' time," commented Enea president Maciej Owczarek. "An important issue for all of us is what to replace coal and lignite with."
The letter of intent follows the signing of a framework agreement in July between the four companies and Poland's largest oil and gas exploration and production company Polskie Górnictwo Naftowe i Gazownictwo (PGNiG) on the exploration and extraction of hydrocarbons from shale.
Treasury minister Mikolaj Budzanowski was cited by Reuters as saying, "Today we have a preliminary deal. By the end of December or at the beginning of 2013, we expect some concrete agreement and concrete actions." Referring to the latest agreement, he said, "We have consistently shown since 2011 that the project to build a nuclear power plant is a priority."
The Polish cabinet decided early in 2005 that for energy diversification and to reduce carbon and sulfur emissions the country should move immediately to introduce nuclear power, so that an initial plant might be operating soon after 2020.
A resolution by the council of ministers then called for the construction of at least two plants in Poland. In order to deliver the government's objectives, PGE announced in January 2009 plans to build two nuclear power plants.
In February 2012, PGE's supervisory board approved the construction of two nuclear power plants by 2029 as part of a strategy plan for the period 2012 to 2035. The plan calls for investments totalling over 330 billion zloty ($103 billion) between 2012 and 2035.
According to PGE, to enable the commissioning of the first nuclear power plant in 2020, it will be necessary to select the site and technology, obtain the necessary permits and start construction no later than 2016.
The rationale
The rationale behind Poland's decision to set up a nuclear plant, says the World Nuclear Association, is that in 2010 the country produced some 157.5 billion kWh gross from 33 GWe of mostly coal plant. Coal provided 88% of the electricity, gas 3% and biofuels 4%. Net exports were 1.5 billion kWh and domestic consumption was 118 billion kWh, or 3090 kWh/year per capita.
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 is set to change with the advent of shale gas domestically, though prospects of this are lower than originally anticipated. 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.
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.
In February 2012 the state-owned 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.
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 ("not in my back yard") 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. [IDN-InDepthNews – September 11, 2012]
2012 IDN-InDepthNews | Analysis That Matters
Image: Unfinished remains of main building of Żarnowiec Nuclear Power Plant | Credit: Wikimedia Commons
