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Polish nuclear capacity will not be built before 2030: PGE

Highlights

* PGE may modify nuclear investment
* Coal will remain base fuel, potential for offshore wind

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Poland's largest utility Polska Grupa Energetyczna (PGE) is not giving up its plans to build the country's first nuclear reactors but the investment may be modified and will not be realized until after 2030, PGE's chief executive Henryk Baranowski said Tuesday.

"Nuclear power will be in the [updated] strategy but the earliest chance to build it will be after 2030 and perhaps in a modified form," Baranowski said in an interview with the daily Rzeczpospolita. "We are not suspending work on the project. We continue to analyze and discuss it with the government. When we're ready, we will take the next step, there's a chance that it will be this year."

In February PGE announced it had chosen two potential locations for the first plant and would continue environmental testing at Lubiatowo-Kopalino and

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Zarnowiec, both in Pomerania in northern Poland close to the Baltic Sea. PGE said it planned to select its preferred site by the end of 2017.

The company was tasked by the previous government in 2009 to lead the project to build up to 6,000 MW of nuclear capacity at two sites. PGE originally planned to commission the first unit in 2020. In January 2014, the previous government approved a Nuclear Power Program which set 2024 as the date for the first unit to be online. That date has since slipped too.

Baranowski did not specify what modifications might be made to the project, although local media has speculated the government might prefer to build smaller units to reduce the capital costs.

He said the company was looking at other means of financing the nuclear project after the PiS government, which took office last November, rejected contracts for difference.

"What is certain is that nuclear power cannot be carried out today under a purely market formula. Developing the optimal financing method will require in-depth dialogue. The result will have to be a compromise between the demands of the investors and the needs of the consumers," he said.

PGE's CEO said hard coal and lignite would remain the basic feedstock fuels for the company for the next two decades or so. Currently the company generates about 70% of its electricity from lignite. Baranowski said its 5.3 GW Belchatow plant had lignite resources until 2040, while its Turow plant had enough until 2045. If the company gets a concession for the Zloczew deposit, Belchatow's operating life would be extended until 2060, he said.

In terms of renewable energy Baranowski said PGE was interested in developing offshore wind in the Baltic Sea.

"An interesting and least talked about technology today is offshore wind. We will continue to prepare to build such capacity in the Baltic despite the high costs. Now we're calculating the profitability of such investments and we're analyzing possible financing models," he said.

In the past PGE has said it is planning to construct three Baltic Sea offshore wind farms with a combined capacity of 3,450 MW.

--Adam Easton, newsdesk@platts.com
--Edited by Jonathan Loades-Carter, jonathan.carter@spglobal.com