WARSAW (Reuters) - Plans to build Poland’s first nuclear power plant will be delayed by at least another two years, sources said, after the decision late last year by state-run utility PGE to take on site research itself and cancel a consultancy contract.
The project, expected to cost between $10 billion (6.82 billion pounds) and $15 billion, was first touted in 2009 as part of a drive to find alternatives to coal-fired power. Since then it has been delayed as falling power prices weakened its economic case and Japan’s 2011 Fukushima nuclear accident hit public support.
Now PGE’s move last December to scrap a 250 million zloty ($65.87 million) contract with Australia’s WorleyParsons (WOR.AX), on the grounds that it was taking too long to look into available sites, will push the plant’s construction further back, according to two sources with knowledge of the project.
“This alone delays the program by at least two years,” a person familiar with the program told Reuters on condition of anonymity, noting that PGE would now have to conduct all the studies, including those on environment impact, on its own, which could take additional time given its lack of expertise.
A second source with knowledge of the plan confirmed there would be a delay of at least two years as a result of cancelling the contract.
The project’s official deadlines are to have the first unit operating by 2025, delayed from the original plan to be up and running by 2020, and to complete the plant by 2035.
But some observers say it looks increasingly unlikely that the plant will be built at all.
Poland’s Supreme Audit Office said in a report published on Tuesday that there was a high risk of further delays in building the plant or that it might not be developed at all.
Wladyslaw Mielczarski, a professor from the Institute of Electric Power Engineering at the technical university of Lodz, in central Poland, said he did not expect the project would be cancelled outright but would be allowed to stall indefinitely.
“Poland does not need a nuclear power station,” he said.
“The nuclear programme was the former prime minister (Donald Tusk)’s project. Now there is no one to carry it out.”
On top of the consultancy wrangles, there is as yet no decision on how PGE is to bear the cost of the project.
It has said only that it plans to find a strategic partner to supply the technology needed to build the nuclear plant and help carry some of the costs. Proceedings aiming at selecting the partner will be launched in the second half of this year.
So far PGE has said only it will decide on the plant’s site in 2017. It is considering two locations at the Baltic Sea, at Choczewo, and at Zarnowiec, where works on a nuclear power plant were carried out under Communist rule.
PGE EJ1, the unit of PGE that is undertaking the project, said it was reviewing what the impact of cancelling the consultancy contract would be on the schedule. It did not confirm a two-year delay.
“Only after these analyses and evaluations are completed will the company be able to present changes to the project’s schedule,” the unit’s chief executive officer, Jacek Cichosz, told Reuters.
Nonetheless, secretary of state in the Economy Ministry Jerzy Pietrewicz said last week that the first phase of programme could be still completed by 2025 “with the full commitment of all participants.”
An agreement by three other Polish state-run companies, copper miner KGHM, and utilities Tauron and Enea, to buy 10 percent each in PGE EJ1 should be finalised in the coming weeks, a PGE EJ1 spokeswoman said.
Editing by Sophie Walker