Poland’s KGHM turns to nuclear as alternative power source

KGHM Polska Miedz SA updates

Finding cheaper sources of energy is a “matter of national interest” for Polish business, the chief executive of KGHM has warned, as the copper producer set out plans to build four small modular reactors.

Marcin Chludzinski said the nuclear reactors, to be built by the US group NuScale with the first due on line in 2029, would make KGHM, which is Poland’s second-biggest consumer of electricity, self-sufficient in energy production and insulate it from volatile energy prices.

“To be globally competitive, energy-intensive businesses like ours . . . need to have access to the cheapest electricity possible, and that is our goal,” he said in an interview with Financial Times.

“It is not only a challenge for us . . . it is a challenge for all businesses in Poland, because if energy continues to become more expensive at this rate, then our ability to invest will fall.”

Poland remains one of the most coal-dependent economies in the EU, and last year generated almost 70 per cent of its energy from the fossil fuel.

But as the EU has ratcheted up its climate goals, and the cost of CO2 emissions has soared, companies are increasingly looking for access to cheaper and stable electricity supplies, and a number have expressed interest in small modular reactors (SMRs).

Last month, two of Poland’s richest men, Michal Solowow, who controls the chemicals group Synthos, and Zygmunt Solorz, who owns a majority stake in the media group Polsat and the energy group ZE PAK, announced a project to build their own SMRs by the end of this decade.

Synthos has also signed agreements to co-operate on the technology with PKN Orlen, Poland’s state-owned oil refiner, and with Ciech, the chemicals group controlled by billionaire Sebastian Kulczyk.

Chludzinski said that Poland was being penalised “too heavily” for the fact that its energy was still highly reliant on coal. But he said that technology such as SMRs could help accelerate the country’s energy transition.

“Poles are very flexible. If it turns out that these are the conditions we have to compete in, and they cannot be changed, then we are able to adapt quite quickly. And I think that the energy transformation, which is meant to take place over time, could happen more quickly,” he said.

The agreement between KGHM and NuScale, signed in Warsaw last week, envisages that four SMRs, which a capacity of 77MW each will be built by the end of 2030. But there is also scope for the number of units to be increased to 12, which would generate around 1GW of electricity.

Chludzinski said that the project — the cost of which has not been finalised — could have the side effect of making KGHM a net energy producer. But he said that this was not the point of the exercise.

“We’re not going to go from being a copper producer to being an energy company. We are focused above all on copper,” he said. “But we have to be self-sufficient in energy terms, and if we have more energy than we need ourselves, then we will sell it.”

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