Partners for Polish project

Four state-owned companies have signed a letter of intent for participation in the preparation, construction and operation of Poland's first nuclear power plant. An agreement could be signed by the end of the year.

Seeking to diversify their energy generation portfolios, utilities Polska Grupa Energetyczna (PGE), Tauron Polska Energia and Enea, together with copper giant KGHM Polska Miedz, 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.

The 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 this year, but could be extended - does not represent an obligation for the partners to participate in the project.

"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."

Krzysztof Kilian,
President of PGE

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.

Researched and written
by World Nuclear News