Envisioning a Polish Nuclear Energy Strategy
The United States carries a relatively active energy policy role in Central and South-East Europe. This includes: 1) U.S. government support (also monetary) for the Tri-Sea Initiative; 2) vocal U.S. government support for diversification efforts in the natural gas market that include support for U.S. LNG imports into the region, and 3) strong opposition to the Nord Stream 2 pipeline that would bring Russian gas directly to the EU and—together with the Turkish Stream—would circumvent Ukrainian transit.
There is also a potential for collaboration in nuclear power. While somewhat less advanced and less reported upon, nuclear collaboration can become an important aspect of U.S. energy policy, particularly as the EU pushes for steep decarbonization measures.
Nuclear could be a solution for a region that finds itself torn between the requirements for energy security and the need to decarbonize often highly CO2 intensive economies. If an option creates closer strategic partnerships with allies, it can also have geopolitical benefits.
Poland is one of the few large countries in the EU that does not have access to nuclear power. Instead, the country is highly dependent on coal for production of electricity (75%). Natural gas is another important part of Poland’s energy sources and in recent years the country has taken serious actions to diversify its natural gas sources away from Russia to ensure supply security. Still, both high dependence on coal and a relatively large share of natural gas in the country’s energy mix challenge the country’s commitment to EU’s clean energy goals.
Thus, it should come as no surprise that nuclear energy is included in Poland’s energy strategy for 2040 (Polityka Energetyczna Polski 2040). Of course, the stipulation can face serious challenges as conventional nuclear power is costly and takes long time to build rather than being able to quickly respond to specific energy needs. In addition, nuclear power is not supported within the EU decarbonization framework in the same way renewables are. Even so, given that the EU decarbonization rules require utilities to pay for CO2 emissions, the cost of nuclear becomes less of an issue if spread over time.
In this context, it becomes crucial for the success of Poland’s nuclear strategy to find a partner that would not only be willing to offer a technology solution but also provide an important injection of initial capital as part of its involvement. Currently this initial investment is estimated at $30 billion USD per reactor (with adjustments in cost depending on final location and technology used). This initial plan includes building four to six reactors over a decade, with the first nuclear power plant beginning operation in 2033 (1-1,5 GW depending on technology) and adding total of 6 to 9 gigawatts by early 2043.
Poland has taken several important steps toward ensuring potential partnerships. The one with the most promise is an agreement between Poland and the U.S. on nuclear cooperation signed during Three Seas Summit on October 19 and aimed at preparing a financial scheme for Polish nuclear program.
On December 14th, 2020 the Polish ministry of climate and environment signed a memorandum of understanding on such cooperation with American Exim Bank, which is currently co-financing a nuclear power project in Romania. Though details of the memorandum are not public but it is assumed they are regarding similar financing arrangement with Poland. In addition, the Polish administration states that it is in constant talks with other potential partners, such as the French EDF, and is actively looking for counteroffers.
Some of the concerns about selecting a U.S. nuclear partner include the recent demise of nuclear in the U.S. and several ventures like the Westinghouse Vogtle plant in Georgia, U.S. and cost overruns and delays of other projects by Areva in Finland, France, and the United Kingdom.
And there is the question of new nuclear technologies like small modular reactors (SMR). Polish Synthos together with American-Japanese GE Hitachi are working on a BWRX-3000 pilot reactor. Still, Polish authorities do not see SMR as able to provide the economies of scale a traditional reactor can provide. For example, Poland would need about 150 small nuclear reactors to replace five to nine big ones, which indicates a scale which private companies are unlikely to implement. Also, the first commercial SMR technology is to be presented somewhere in next decade and Poles need nuclear power to be online tomorrow (or more realistically 2033).
From the U.S. perspective, Poland’s nuclear program could be an opportunity for the American sector to regain some its former glory and provide an alternative to Chinese and Russian investments that have been multiplying around the globe. In this sense, nuclear cooperation takes on foreign policy goals aimed at limiting Russian and Chinese influence in the world. Poland is not the only country in CEE region to look into U.S. nuclear power. Romania has also followed suit, pointing to even broader potential collaboration across the region. Such cooperation would also be consistent with the U.S. commitment to energy security in the CEE region— with regards to natural gas supply. In addition, this commitment is one of the few that has bilateral support in the U.S. Congress—something that both the outgoing Trump administration and incoming Biden administration are not shy to promote.