PEJ signs agreement with US consortium to design and build NPP in Pomerania

31 May 2023

An agreement has been signed by state-owned Polish utility Polskie Elektrownie Jadrowe (PEJ) with a consortium of US Westinghouse and Bechtel, which is being set up to design and build a NPP in Pomerania. The agreement, which sets out the rules for cooperation between PEJ and the Westinghouse-Bechtel consortium, is the result of intensive negotiations in recent months. These rules will apply to subsequent commercial contracts for the construction of a nuclear power plant in Pomerania.

Westinghouse said “they will be necessary, among others to the contract for the design of the power plant, which is scheduled to be signed later this year”. PEJ said the agreement “sets out a plan for the delivery of the project and confirms the implementation of the next major stage of Poland's flagship nuclear energy initiative”. The Polish government selected the Westinghouse AP1000 reactor technology for its first-ever nuclear energy programme in November. Significant licensing and engineering work is already underway on the project, PEJ noted, adding that the new agreement “lays the foundation for the design activity to start later this year and the construction contract in 2025”.

“An American consortium of highly experienced companies in the nuclear industry is being established, with the goal of designing and building the first NPP in Poland,” said PEJ acting President Lukasz Mlynarkiewicz. “As an investor, we will actively cooperate with this consortium to consistently achieve successive milestones in the project until the power plant in Pomerania is commissioned”.

Westinghouse said the agreement sets the scope of responsibility and defines the most important rules and conditions that partners are to follow as part of the implementation of the project for Poland’s first NPP. “It also specifies that both American companies will work together, including in areas such as designing a nuclear facility, implementing the assumed work schedule, project control and ensuring its quality. The consortium leader at the power plant design stage will be Westinghouse, and during construction, Bechtel.”

Anna Moskwa, Polish Minister of Climate & Environment, noted: “We are even closer to building a nuclear power plant in 2026 and producing nuclear energy in 2033. This will allow us to achieve the goal of a quarter of energy production in the Polish energy system from nuclear energy in 2040.” She said she appreciated that the project was open to Polish contribution – “of the Polish economy, Polish entrepreneurs, Polish services and the involvement of Polish employees”, adding, “We are preparing for this challenge.”

“The Westinghouse-Bechtel team is a proven one, as demonstrated by successfully powering up the first AP1000 reactor in the US and nearing completion of the second, as well as four AP1000 units already in successful commercial operation globally,” said Patrick Fragman, CEO of Westinghouse. “We will use this experience to help Poland efficiently create a new, cleaner, more secure energy mix.” Craig Albert, President and Chief Operating Officer at Bechtel said “Bechtel brings over 70 years of experience in the nuclear industry to this partnership. Together with Westinghouse, we look forward to working with PEJ, and Polish construction companies and suppliers to deliver the clean, reliable energy Poland needs.”

Currently, the AP1000 is not licensed or operating anywhere in Europe. In the USA, two AP1000 reactors are under construction at the Vogle NPP (units 3&4) in Georgia. Unit 3 was finally connected to the grid in April and unit 4 is nearing completion. However, both are significantly delayed and overbudget. When construction began in 2009 they were expected to cost about $14bn and to enter service in 2016 and 2017. Cost has more than doubled.

Two Westinghouse AP1000 units are in operation at each of China’s Sanmen and Haiyang NPPs after some delays and two CAP1000 units, the Chinese version of the AP1000, are being built as the second phase at each station. The proposed construction of four CAP1000 reactors (units 1-4) at China’s Lufeng NPP was approved by the National Development & Reform Commission but has not yet received State Council approval. Plans to build further AP1000 units in China, however, have been dropped in favour of Chinese Hualong-One units.

Westinghouse has, however, been lobbying hard in former Eastern European countries resulting in AP1000 units being selected in Poland. They are being considered by Bulgaria, while nine others are planned in Ukraine.

Meanwhile, Adam Guibourgé-Czetwertynski, Undersecretary of State in the Ministry of Climate & Environment told WNP, “We are currently working on obtaining all permits for the first unit in the first location of the nuclear project. At the same time, we are conducting talks with financial institutions. In its offer, the US government has included the participation of US financial institutions that support such projects, but we are also considering other options.”

He said commissioning the first unit in 2033 was possible but difficult and would face problems. “Nuclear power is a very capital-intensive undertaking and therefore the financial costs of such an investment are of great importance for the final energy price. That is why we are considering mechanisms that will minimise risks from the point of view of investors, financing institutions, yes, to minimise financial costs and ensure energy supply for our economy at the lowest possible price.” He said Poland was not “prejudging” what the financial model would be. “There are several possibilities here. In this context, it is also necessary to mention the discussion that is taking place at EU level, where the European Commission has proposed some solutions as part of the electricity market reform. These create a framework for price support for all investments in the energy sector. This is also an element that we will have to consider when designing appropriate solutions.”

He also stressed the importance of Polish participation in NPP construction. The Polish Nuclear Power Industry Programme from 2020 assumed that during the construction of the first nuclear unit in Poland 40% the value of the work will be done by Polish companies. This indicator was also transferred to Poland's Energy Policy until 2040, which was created a few months later. However, the Polish government will not be able to impose regulations forcing technology suppliers to employ Polish companies in sufficient numbers. “EU law does not allow such an obligation to be written directly, but we can certainly assume that there are a number of construction works, where Polish companies will be able to submit the most competitive offers,” he said.

He recalled that that different technology suppliers for various nuclear projects talk about the possible participation of Polish industry from 40-80% for subsequent reactors. “So the level of about 50% is realistic.” He added: “The most important thing in a nuclear project is, of course, ensuring an adequate level of safety, and therefore we offer interested companies the opportunity to train staff by creating appropriate training programmes. In cooperation with the US government, we are working on a staff training centre.” The Ministry of Climate & the Environment has identified about 80 Polish companies that have participated in nuclear projects in the world over the past 10 years - in the UK, Finland or the United Arab Emirates. There are also over 300 companies that have the appropriate skills and certificates to participate in a nuclear project in Poland. “We need to mobilise even more companies through the education programme,” Guibourgé-Czetwertynski noted.

Another important element is the possibility for Polish industry to be involved in other nuclear projects that will be implemented in Europe as more European countries considering investing in large NPPs or small modular reactors. “If our companies are able to prove their ability to implement the Polish nuclear project, they will also have a chance to work on other projects in Europe,” he pointed out.

Image (top left): Seated, from left - Patrick Fragman, CEO, Westinghouse; Lukasz Mlynarkiewicz, acting president, PEJ; and Craig Albert, president and chief operating officer of Bechtel. Standing, from left - Mark Brzezinski, US ambassador to Poland; Anna Moskwa, Poland’s minister of climate and environment; Mateusz Berger, Poland’s government plenipotentiary for strategic energy infrastructure (courtesy of Westinghouse)

Image (bottom right): Artist’s rendering of a nuclear power plant using a Westinghouse AP1000 reactor (courtesy of PEJ)

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