Polish Business Bets Smaller Is Better in Nuclear

As Poland’s government drags its feet on building the country’s first nuclear plant, businesses are eyeing smaller but largely untested reactors to wean the country off fossil fuels faster.

Towering over a lake in central Poland, the red-white-striped chimneys of the Patnow power plant are set to cough up their last clouds of smoke over the coming years. Currently one of the country’s largest brown coal-fired plants, the site is now in the running to host the country’s first nuclear power plant in the race for cleaner energy in Poland.

But what makes this nuclear project different is that it’s a private venture. The plant is just one of several recently announced that will rely on the nascent technology of small modular reactors (SMR), which has enticed Polish businesses with its promise of cheaper and nimbler nuclear power.

At the same time, Poland’s state is pushing ahead with its own large nuclear project slated for 2033. But both the established and futuristic technologies still have a number of regulatory hoops to jump through and opponents to win over. The race for who brings nuclear to Poland first is hotting up.

Building nuclear plants like aeroplanes

In recent weeks, Polish businesses have been tripping over each other to announce their nuclear ventures. Most recently, on September 23, state-owned copper producer KGHM signed an agreement with US nuclear technology developer NuScale for four 77-megawatt (MW) reactors, of which the first could come online in 2029. The company, which is Poland’s second-largest consumer of electricity, said it wanted to shield itself against increasingly volatile energy prices.

The news came less than a month after Michal Solowow, a chemicals tycoon and Poland’s richest man, and Zygmunt Solorz, the owner of the ZE PAK energy plant complex in Patnow, announced a joint venture for up to six 300MW nuclear reactors around the end of the decade.

Companies from energy-intensive sectors have flocked to become the first beneficiaries of the nuclear project. Poland’s biggest company, state-owned oil refiner PKN Orlen, signed a framework agreement with Solowow’s company Synthos, as have national chemicals producers Grupa Azoty and Ciech.

Businesses are increasingly drawn to the promise of SMRs – future nuclear units more compact than the current 1000MW-plus full-sized ones. Descaling makes business sense: modules will be produced in factories and then transported to sites, making plants cheaper and quicker to build. GE Hitachi says its aim is to cut reactor costs below $1 billion and be able to install their BWRX-300 SMRs in less than 36 months.

According to Ted Jones, senior director for National Security and International Programs at the Washington-based Nuclear Energy Institute (NEI), the industry is talking about moving away from “making plants like airports” – sprawling and custom-built onsite; instead, “making them more like airplanes” – in different sizes, but standardised and factory-built.

Jones also argues that SMRs are “very well suited” to the typical generation capacity of the retiring fossil fuel plants that they would replace, yielding huge potential savings. “Reactors could be compatible with the steam turbines, and there is already transmission infrastructure, such as the switchyard and high voltage power lines carrying power to cities,” Jones tells BIRN in a telephone interview.

Floating SMR ‘Akademik Lomonosov’ sets sail for its final destination of Pevek in Chukotka, Russia: Photo: Rosatom

Prototypes

Yet for all the buzz around SMRs, it could take several more years until the technology is commercialised.

There are currently more than 70 SMR designs under development across 17 countries, according to the International Atomic Energy Agency (IAEA). Russia already has a 35MW floating SMR providing power to the Far East region of Chukotka and plans to switch on its first land-based SMR plant in its northern province of Yakutia by 2028. Construction of a 125MW unit is underway in China. American frontrunners are racing to get their SMR units online before the end of the decade, with GE Hitachi aiming for a contract in Canada for 2028 and NuScale building one in Idaho by 2029.

“The construction of the first small reactors in the Western world is a matter of three or five years,” promised Solowow in a recent interview. GE Hitachi, whose GEH BWRX-300 is in contention to provide the SMR at Patnow, could launch its first Polish SMR “at latest in 2030,” according to the company’s CEO Jay Wileman.

Yet many experts believe these timelines are overly optimistic. According to Pawel Gajda, a lecturer from the Department of Sustainable Energy Development at the AGH University of Science and Technology in Krakow, there has been a growing global interest in SMRs for around 15 years with dozens of companies launching R&D efforts. However, of the Western companies only GE Hitachi and NuScale have made any meaningful progress, and even they are still to obtain final approval from US regulators.

The next challenge for the technology will be finding a first buyer to test it out. “No one is very keen to take the risk of hosting the first reactor,” notes Gajda.

But even if Polish companies were to be among the first to try out SMR technology, they would need to jump a series of regulatory hurdles, which are the same for these small projects as for larger ones.

“Partners and investors expect lighter regulation for SMRs,” says Tomasz Chmal, energy expert and partner at Trzeciak|Chmal advisory group. “The big game now is how to structure those regulations.”

Chmal believes that while the 2030 deadline is feasible in terms of technology, rules will need to change to make such projects bankable. Much of that will depend on the mood in Europe. The European Commission convened behind closed doors in June to begin discussions on whether it should include smaller nuclear units in its taxonomy of sustainable investments, which would make more money available to such projects.

Nuclear lobby organisations, such as the IAEA, have cast both large and small atomic reactors as key to the world meeting its zero-emission goals, by providing a power backup for cost-effective but unstable wind and solar energy.

Poland’s government is now considering whether the nimbler technology fits with its own decarbonising efforts. Piotr Naimski, who is its plenipotentiary for energy infrastructure, said the technology was a “very distant perspective”, but could be a “good thing” in bringing “diversity” to Poland’s nuclear drive.

The growing interest of state-owned giants also suggests that the government sees the technology as potentially complementary to its full-scale units. Poland’s Deputy Prime Minister Jacek Sasin hailed last week’s NuScale-KGHM memorandum as an “historic moment”.

“There is competition in terms of PR and organisation, in terms of showing that the private sector can be more efficient in the field of nuclear,” says Jakub Wiech, deputy editor-in-chief of Energetyka24.com. “It throws down the glove in terms of which reactor is built first… but it should not overshadow larger nuclear projects, because that would delay decarbonisation in Poland.”

Public vs private

The Polish government has harboured plans for full-sized nuclear plants since as early as the 1980s. But a more decisive push is only being made now, with the first unit planned for 2033. “A lot of wasted time… I’ve lost track of progress,” sighs Chmal.

Experts approached by BIRN put this down to a lack of experience in Poland dealing with such complex projects, as well as myopic politicians dragging their feet on long-term investments (estimated at more than 22 billion euros). “There was not enough political will between 2014 and 2019,” says Gajda, the professor.

According to Wiech, the previous government led by the centrist Civic Platform (PO) between 2007 and 2015 treated nuclear plans as a means of deflecting EU criticism as it bolstered the domestic coal sector. “Years just slipped through our fingers,” says Wiech of Energetyka24.com.

But now politicians are beginning to feel the heat. Electricity prices in Poland have soared in recent years as its coal-fired energy, which still accounts for 70 per cent of the mix, becomes more expensive. Last year, Poland had the fastest-growing electricity prices in all of the EU. And as Brussels steps up its climate ambitions, prices of carbon emissions will further rise. “We are headed for a long period of electricity price rises, because we have failed to decarbonise our energy mix in time,” says Wiech.

We do not really have any other choice but to build nuclear.

– Pawel Gajda, lecturer at the AGH University of Science and Technology

The government plans on reducing the share of coal in the country’s electricity generation to 60 per cent by 2030 and even 11 per cent by 2040. To that end, it hopes to have six nuclear units by 2043 with a total 6-9 gigawatts (GW) capacity for a stable baseload of electricity, to underpin other big investments in the more intermittent offshore wind and solar power.

The government believes its nuclear project is still on track. “12 years is a tight deadline, but that means we need to use the time well,” says Naimski.

The official explains that the government is finally wrapping up its location and environmental studies. The next step will be selecting an international partner, with French, South Korean and US companies vying for the contract. “We want a partnership for 60 years… to set up a joint venture,” says Naimski.

That could speed things up, according to Gajda. “An investor should push things forwards and make sure that the Polish side does things right,” he says.

But as with SMRs, experts are sceptical of deadlines. “We do not have a location decided, nor a technological partner and financing plan,” says Wiech. “I would venture to say that the timeline laid out in the government’s PEP2040 strategy is already outdated.”

One challenge now is political continuity. Both within the government camp and among opposition parties there are mixed views on nuclear. With elections approaching in 2023, there is “meaningful political risk” that the project could be derailed if the government changes, warns Wiech.

That is also playing on the mind of the Law and Justice (PiS) government. “The main issue is to secure the continuation of the project regardless of changes in government,” stresses Naimski. “Opposition parties have mixed options when it comes to atomic energy.”

Another challenge will be persuading local populations to accept nuclear plants. Protests have already once buried Poland’s earlier nuclear program in the 1980s when the Chernobyl disaster in next-door Ukraine fuelled safety concerns. Yet polls suggest that four decades later support for nuclear is rebounding. In June, 39 per cent of respondents in a CBOS survey said they were in favour, with 45 per cent against.

Deadlines for both the public and private projects are already tight. “We do not really have any other choice but to build nuclear,” says Gajda. “We need to stop asking if, and start asking how.”