Poland Looks to Nuclear in Bid to Keep Its Coal Plants Humming

Poland hopes a nuclear power station may allow it to continue using the European Union’s biggest coal deposits to fuel the bloc’s biggest eastern economy.

The country, which gets more than 80 percent of its electricity from coal, may use a pledge to build its first nuclear power plant as a bargaining chip in key talks with the EU on planned climate regulations under the so-called winter package. The clean energy source would cut overall emissions and could help Poland persuade the bloc to let it use dirty coal units for longer.

“It would be best if there was no winter package, but if it’s there we want to work out a compromise,” Deputy Energy Minister Grzegorz Tobiszowski told reporters in Warsaw on Tuesday. “In its current form the proposals would limit our coal investments and we wouldn’t be able to afford it.”

Poland, the biggest net receiver of EU funds, has touted coal as the cheapest fuel and repeatedly said reducing its use too quickly would hit economic growth. That is in contrast to a long-term shift to renewables, or Energiewende, that has forced plants using the fuel to close in neighboring Germany.

Under the proposed EU regulations, Poland wouldn’t be able to support construction of back-up coal plants in its power capacity market, effectively spelling the end of new facilities burning the fuel. A nuclear plant, which could cost $6.2 billion, may be part of Poland’s talks with the EU on climate policy, Tobiszowski said.

“We cannot not take notice of what the EU is preparing for us” and need our own proposal, he said. “If we only come up with hard coal and lignite, the EU would destroy us. I want to be pragmatic and efficient.”

Financing Option

The key decisions in talks with the bloc will be made next year, according to Piotr Naimski, the deputy minister in charge of key energy infrastructure. A decision on the nuclear plant should be made by end-June, once the Energy Ministry finds a viable financing option.

While the nuclear power project is one of the few areas in which the Law & Justice government is following its predecessors, the project has yet to reach the drawing board. It would cost at least twice as much as a conventional coal plant with comparable capacity, risking a backlash from the nation’s powerful coal lobby groups.

The Energy Ministry led by Krzysztof Tchorzewski is analyzing available financing models that would make the project affordable, a necessity if the government is to approve it. 

Tchorzewski this month estimated the cost at 24 billion zloty ($6.2 billion), down from an original assessment of 35 billion zloty, which he said would be similar to building offshore wind plants of the same size. A first plant, with capacity of 1,200 megawatts, would take about 10 years to construct, he said in an interview with Wnp.pl.

That would make it cheap compared with recent projects. Electricite de France SA’s planned Hinkley Point C plant in the U.K. with two reactors, which won government approval in September, has an estimated price tag of 18 billion pounds ($23 billion).

About BloombergNEF

BloombergNEF (BNEF) is a strategic research provider covering global commodity markets and the disruptive technologies driving the transition to a low-carbon economy. Our expert coverage assesses pathways for the power, transport, industry, buildings and agriculture sectors to adapt to the energy transition. We help commodity trading, corporate strategy, finance and policy professionals navigate change and generate opportunities.
Sign up for our free monthly newsletter →

Want to learn how we help our clients put it all together? Contact us