Poland has signed an intergovernmental agreement with the USA to cooperate on the development of Poland’s civil nuclear power programme. This followed extensive talks on 20 October between US Secretary of Energy Dan Brouillette and Poland’s Secretary of State for Strategic Energy Infrastructure Piotr Naimski.

The agreement was signed by Brouillette on 19 October and will become effective upon the exchange of diplomatic notes confirming completion of all applicable requirements for its entry into force. “This 30 year Agreement, the first of its kind, represents an enduring energy bond between the United States and Poland,” the US Department of Energy (DOE) said. "If we accept the Americans' offer, they will stay in the project for several dozen years," said Naimski.

“This is the basis for formal cooperation and the presentation by American partners of an offer for their companies to participate in the 20-year Polish Nuclear Power Programme approved by the government on 20 October," he noted before signing the agreement.  “This agreement does not prejudge the partnership in this 20-year programme. We will be making decisions based on the results of 18 months of work that lies ahead of us.”

He explained that a Polish-American steering committee will monitor the progress of that work. The Polish government has taken the first steps towards establishing a special purpose vehicle for investment that would sign an agreement in 2022 with a future partner, which would take up to a 49% stake in the project and supply the reactor technology.

The shareholders of Polska Grupa Energetyczna (PGE EJ1), which was set up to build and operate Poland’s first nuclear power plant, on 1 October signed a letter of intent with the State Treasury to acquire 100% of its shares. The government is expected to have full control over PGE EJ1 by the end of the year.

DOE said Westinghouse, majority owned by Canada’s Brookfield Asset Management, will participate as a first step in the agreement with the USA, in an engineering study for the planned nuclear power plants.

Naimski said the Steering Committee will prepare a final conceptual and executive report, which will be the basis for Poland’s on the choice of technology and strategic partner for the implementation of the 20-year programme for NPP construction. “We will try to bring about the choice of technology and partner by the end of 2021,” he added.

“We envisage the partner's participation in that programme to include both capital and practical support, also in the form of taking up shares in a joint venture. This is on the agenda over the next 18 months. A very important element of this offer for the Polish government will be the financing structure, which will be discussed together, because we anticipate that our partner will have capital involvement in this investment and will stay with us during the plant's operational phase.”

Polish Climate Minister Michal Kurtyka in September unveiled a PLN150 billion ($39.7 billion) plan to construct six new nuclear power units by 2040 as part of a clean energy economy. This plan includes reducing the share of coal in electricity production to 37% and 56% in 2030, and to between 11% and 28% in 2040, depending on CO2 prices. Coal last year accounted for 74% of Polish electricity generation.

Poland's Energy Policy for 2040 (PEP2040) is based on three pillars: a just transition; a zero-emission energy system; and good air quality. The first 1-1.6GWe nuclear unit is to be commissioned in 2033, with five more units, or 6-9GWe, to follow by 2040. They are expected to be built at Lubiatow-Kopalino and Zarnowiec, near the country's Baltic Sea coast.

Naimski emphasised the importance of nuclear energy. “I cannot imagine that within 20 or 30 years we would be able to successfully complete the energy transformation in Poland without the participation of the nuclear energy sector. In principle, this is understood by most of the companies and politicians who are now opting for a renewable, green order and transformation. It is becoming clearer and clearer to everyone that it will be possible if, in parallel and simultaneously, we develop sources and technologies for the production of electricity that are stable and produce baseload power. If we exclude fossil fuels in the perspective of several decades, it seems that the alternative is the nuclear power industry. This is already accepted, also at the level of formulated strategies and investment plans.”

DOE said on 19 October that, under the agreement, Poland will likely buy $18 billion in nuclear technology from US companies. “We are hopeful that the ultimate decisions that are made by Poland ... over a period of time will result in them choosing US technology,” Brouillette told reporters in a teleconference. However, Naimski, said the information about $18 billion of the Polish contribution presented in the media from DOE sources has no basis in the agreement signed by Poland and the USA.

The subject of negotiations will be the project management structure first, and then the costs. Discussions will also consider the participation of Polish companies in the project. “The share of Polish companies will increase along with the successive phases of the programme, which will be implemented in sequence. We will start with two or three units and then add more units,” said Naimski. “This will have an impact on the overall cost.”

Naimski’s office said that, over the long-term, the agreement defines the entire spectrum of areas of cooperation between Poland and the USA. This applies to both the support of the involved economic entities and activities at the government level. These activities will concern, among others:

regulations, research, personnel training,development of supply chains,campaigns aimed at increasing public awareness of civil nuclear energy,cooperation in nuclear energy projects in Europe.

Naimski first had detailed discussions with the US in February when he held a meeting in Washington with Brouillette during which they discussed Polish-US energy cooperation and the US gas supply to Poland. That meeting was organised at the Washington State Energy Office as part of the US-Poland Strategic Dialogue on Energy and was also attended by Polish Climate Minister Michal Kurtyka.

After signing the recent agreement, Brouillette said, “The US is committed to working with Poland to advance its national security, its regional security, and its democratic sovereignty”, adding that this would help lessen Poland’s dependence on Russia for energy security. Poland, traditionally a large purchaser of Russia’s natural gas, which competes with nuclear power, aims to end those purchases after 2022, replacing them with pipeline deliveries from Norway and liquefied natural gas from the US and others.

He said: “The Trump Administration believes the key to energy security is energy diversity – a diversity of fuels, sources, and routes. Nuclear will provide a clean and reliable supply of electricity to the people of Poland, as well as enhance their energy diversity and security. The next generation of nuclear energy must be a part of the energy security conversation with our allies in Europe and around the world.”

US Ambassador to Poland Georgette Mosbacher said the agreement marks several major milestones. “Not only does it strengthen Polish-American relations, but it is an announcement to the rest of the world that America is back in the nuclear business, thanks to US cutting edge technology.”

US activities in Eastern Europe

The agreement with Poland is part of a much wider US sales campaign in Eastern Europe.

On 9 October, Washington signed a draft cooperation agreement with Romania for the refurbishment of one nuclear power reactor and the construction of two more at the Cernavoda nuclear power plant.

Brouillette and Romania’s Minister of Economy, Energy and Business Development Virgil Popescu initialled a draft Intergovernmental Agreement to cooperate on the expansion and modernisation of Romania’s civil nuclear power programme and paving the way for Romania to utilise US expertise and technology to construct units 3&4 at the Cernavoda NPP and refurbish unit 1. The $8 billion agreement came after Romania ended talks with China General Nuclear (CGN).

Date: Tuesday, 27 October 2020
Original article: neimagazine.com/news/newspoland-signs-nuclear-deal-with-usa-8201218