Poland's PGE Signs Memorandum with EDF for Nuclear Cooperation

Poland's power utility, the state-owned Polska Grupa Energetyczna (PGE) (Warsaw, Poland) has signed a memorandum of understanding with Electricite de France (EPA:EDF) (EDF) (Paris, France) to conduct feasibility studies on setting up nuclear power reactors in Poland. The country, which is heavily dependent on Russia for its energy requirements, hopes to build two 3,000-megawatt (MW) nuclear reactors, with one unit planned to commence operations by 2020.

Both firms will research the use of the European Pressurized Reactor (EPR) from Areva SA (EPA:CEI) (Paris). PGE, which will be building both reactors, also plans to team up with other potential partners for nuclear ventures in Poland. The company plans to hold a 51% stake in the proposed consortium, which will also include international players. PGE said that it signed the memorandum of understanding after carrying out discussions with potential investment partners with sufficient global experience in constructing and operating nuclear power plants.

The Polish government has already drawn up a phased roadmap for the nuclear venture, with the assumption that site and preliminary construction details will be finalized by 2013, after basic legislation falls in place next year. Site preparation and detailed plans are expected to be complete by 2015, while construction activities have been slated to start by 2016. The reactors are likely to be located in the north and east of the country, with Zarnowiec being a leading contender. Zarnowiec in northern Poland was home to four Russian VVER-440 units that were under construction during the 1980s but were later scrapped in 1990. Project costs have been estimated to be between 2,500 and 3,000 euros ($3,700-$4,500) per kW of output.

Poland's energy requirements are primarily met by coal-fired plants, which account for about 93% of the country's total power output. Gas from Russia accounts for 40% to 50% of the country's gas requirements. With strict emission laws being enforced by European Union and gas supplies from Russia being hampered by regional conflicts, Poland decided to switch over to nuclear power as early as 2005. The country, with the assistance of France, has planned to implement a civil nuclear program using the proprietary EPR technology from Areva and the implementation expertise of EDF, which operates 58 nuclear reactors in France. Both countries recently signed a joint declaration for cooperation on environment and energy.

Poland aims to generate about 10,000 MW of nuclear power by the year 2030, catering to about 10% of the country's power needs. Poland has set the intermediate target of meeting 7.5% of its demands from nuclear power by 2022.

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