Where does the money for an atom come from? “New electricity bill. I don’t see any other option”
The construction of a nuclear power plant in Poland is one of the largest undertakings in the recent history of our country. And that’s also financially.
As Prime Minister Mateusz Morawiecki recently said, the total cost of the investment is approx. USD 20 billion, which at the current exchange rate amounts to nearly PLN 100 billion. For comparison, according to government estimates, the construction of the Central Communication Port will cost around PLN 35 billion, the Baltic Pipe – EUR 1.6 billion, and the Vistula Spit ditch – nearly PLN 2 billion.
How we wrote in Business Insider Polska, it is the American Westinghouse that will be responsible for the construction of the first Polish nuclear power plant. What do we know about her? The completion of the investment is planned for 2033.
Reactors will be built in Pomerania in the Choczewo commune (more precisely: Lubiatowo-Kopalino), i.e. around 20 km from Żarnowiec, where the construction of a nuclear power plant based on the technology of the Soviet Union was underway during the Polish People’s Republic. The structure is to withstand an aircraft impact, and the lack of power supply will not lead to a failure, such as in Fukushima.
– We confirm the implementation of the nuclear project in the proven and safe Westinghouse Nuclear technology – Prime Minister Morawiecki announced at the beginning of November.
Interestingly, this choice is praised not only by the government. “Good choice, Polish raison d’etat, I keep my fingers crossed” – this way opposition politicians commented on an important step in the construction of the first nuke. Although there are many voices that such a decision should be taken a long time ago. We will have to wait over a decade for electricity from a nuclear power plant. As planned by the government, construction of the nuclear power plant could start in 2026 and be completed in 2033.
Will there be an addition to the electricity bill?
However, it is not difficult to announce a gigantic program 11 years in advance, but to find money for it. The problem of financing a nuclear power plant may keep the government awake in the coming years.
According to Dominik Brodacki, energy analyst at Polityka Insight, we are against the wall on this matter.
– Sooner or later, the government will have to add an additional charge to the electricity bill. I cannot imagine a different scenario – says Brodacki in an interview with Business Insider Polska.
As an example, he gives here the cogeneration or capacity fee, which we can already see in the energy bill.
Anyway, about such an idea RMF FM has recently announced. According to the journalists of the website, the fee is charged it could amount to PLN 10, which would give the state budget about PLN 2 billion annually.
Whether the government is considering such a solution we asked at the climate ministry.
“Please be advised that there are no ongoing work on the tax or other fees or levies to finance the construction of the nuclear power plant. Such solutions would increase inflation by hitting the Polish economy and society. The government’s goal is to create a business model that will reduce electricity costs for end users. This will contribute to the maintenance of jobs in industry and other sectors of the economy and to reindustrialisation of the country “- reads the ministry’s press release.
As Brodacki adds, the investment is so expensive that it is difficult to look for a precedent in the history of the Polish economy.
– It is an open secret that Americans will not want to take over 49 percent. in a company building power plants. Besides, Polish energy companies have not shown too much interest in this topic in recent years – emphasizes the expert.
Brodacki claims that Poland does not currently have such funds to be able to freely shift them to such a serious investment.
– There is talk of PLN 17 billion in loans, but with a total amount of nearly PLN 100 billion, it is just a drop in the ocean of needs – assesses the interlocutor of Business Insider Polska.
So what can the government do to find financing for such a gigantic investment? In addition to loans, there is also the possibility of tempting the investor with rights to some of the energy produced in the power plant.
– But sooner or later it will have to end up with an additional component of the electricity bill. So all Poles will throw themselves on the construction site – concludes Dominik Brodacki.
Somewhere in the background, the SaHo model is still “looming”, created by Polish scientists: Dr. Bożena Horbaczewska from the Warsaw School of Economics and the chief specialist for strategy and economic analyzes of the nuclear sector at the Department of Nuclear Energy of the Ministry of Climate and Environment Łukasz Sawicki.
“In the SaHo model, the state builds a nuclear power plant and then sells it to end users of energy. They have the right and obligation to receive energy at the cost of producing it. It is a state-initiated (and possibly controlled) cooperative of end consumers. In this model, energy trading companies are accepted. they are only a last resort, as a supplement to the system. The concept uses the mechanisms of, for example, Polish industrial energy (where plants generate electricity for their own needs) or cooperative models from Finland and the USA “- he wrote about the PAP model.
The model also assumes that the state is the original investor of the power plant – e.g. through a company whose “the goal is not to generate profit, but to build a nuclear unit and then produce energy and sell it to shareholders at production cost. “
However, this is the least likely way to finance an investment.
A chance for Polish companies?
The government assumes that in addition to the “state” investment in Pomerania, two more power plants are to be built, in which private entities are to be involved in the company, incl. with the Korean KHNP.
The share of Polish companies in the construction of the nuclear power plant may amount to 50-70 percent. – analysts from the Polish Economic Institute have recently estimated in the report “Economic aspects of nuclear investments in Poland – impact on business, labor market and local communities”.
According to analysts, the investment will therefore translate into new work places. The authors of the report estimate their number from 26.4 thous. up to 39.6 thous. These will be places related to the construction and operation of nuclear power plants in the 50-year reactor operating cycle.
In addition to the benefits for the energy industry and the entire economy, there are also challenges – mainly those related to project financing. The government model assumes 51 percent. share of the Treasury and 49%. participation of a foreign partner, i.e. Westinghouse.
As PIE notes, the Polish industry, which would have at least 50 percent participate in the construction of an atom, there are a number of threats and weaknesses that may hinder the full realization of the potential of participating in a nuclear project. “The Ministry of Climate and Environment points to limited capital opportunities in relation to foreign competition, resulting from the structure, size and financial condition of Polish industrial enterprises” – reads the report.
Are there any willing? They are lining up
The government assures that there are many people willing to co-finance the investments. – We have a long line of people willing to finance this investment. There is no fear in me that there will be some financing problem – Prime Minister Morawiecki said recently when asked about financing the nuclear project.
As he noted, “the first big money will be involved after the first shovel is driven – in a few years”. In his opinion, this is a problem that “it is easy to solve not today, not tomorrow, but rather the day after tomorrow”.
– Capital entry, debt entry on the American side, as well as entry of many investment funds is already agreed – the head of government added.
– We have the promises of the Americans as to the capital entry, i.e. the one that makes the American entity heavily put its assets into the wake of the investment. This is the entrance we care about the most – said Morawiecki.
The first glitches are already here
However, last Monday “Rzeczpospolita” informed that the first clashes between Poland and Westinghouse are appearing. Americans do not quite like the way of financing investments, which the Polish government is supposed to push through.
What model is it? In the Nuclear Power Program of 2020, we read that the business model assumes:
- selecting one common reactor technology for all NPPs,
- selecting one strategic co-investor related to the technology provider,
- acquisition by the State Treasury of 100 percent shares in a special purpose vehicle investing in nuclear energy in Poland,
- ultimately, after selecting one strategic co-investor associated with a technology supplier, the Treasury will maintain at least 51 percent. shares in the company.
“A foreign investor will bring his experience in the construction and / or operation of a nuclear power plant and will increase the credibility of the project, thanks to which it will be possible to obtain cost-effective export credits and other sources of capital. Such an approach will help ensure strategic partnership at the political and economic level and significantly accelerate the process of preparing nuclear projects” – we read in the nuclear energy program.
At the same time, the government hoped to keep 51 percent. shares in the company that is to build the power plant. “This will ensure direct control over the Program’s decision-making process and enable effective ownership supervision over the company investing in nuclear energy. It will also reduce the risks affecting the level of financial costs in the nuclear project, which will result in a lower cost of investment capital and, ultimately, a lower price of electricity. for society “- explained the government.
The plans were therefore as follows: The Treasury will have 51 percent of the company building the power plant. shares, and the American Westinghouse will take over the remainder.
“We expected the Americans from Westinghouse to take up to 49% of the SPV. Americans, meanwhile, want to make a much smaller contribution.” An informant “close to the government” was to tell Rzeczpospolita. The American partner, however, was to propose 10 percent, which the Polish government did not like.
However, in return for a low own contribution, the USA proposes the involvement of institutions supporting American investments in export markets. US International Development Finance Corporation (DFC) and US EXIM Bank could offer Polish Nuclear Power Plants up to USD 17 billion. loan on preferential terms – the daily reports.
#money #atom #electricity #bill #dont #option