Author: Energy & Climate Programme

Opinion on the procedure for granting public aid for the first nuclear power plant in Poland

In connection with the European Commission’s call for comments in the proceedings regarding the approval of state aid for a Polish nuclear power plant (case SA.109707e),

General Comments

In our opinion, there is no doubt that the development of nuclear energy in Poland could constitute a significant breakthrough in terms of economic development and strengthening the national economy, as well as in Poland’s climate policy.

In the latter respect, the International Energy Agency (IEA) points to the key importance of nuclear energy in reducing the carbon footprint and achieving the goal of climate neutrality by 2050. Even the most ambitious scenario, assuming an almost 90% share of renewable energy, includes nuclear energy as part of the solution enabling full and deep decarbonization of the economies of IEA member states [1]. Moreover, the IEA estimates that the lack of nuclear energy could increase the cost of achieving climate neutrality by up to USD 500 billion in the form of necessary investments.

Therefore, in our opinion, the Polish government made the right decision to intensify efforts related to the construction of the first nuclear power plant in Poland. Furthermore, official government documents indicate the priority importance of nuclear energy in reducing electricity production from hard coal and lignite. It is also worth noting the research conducted as part of the DEsire2 project [2], which indicates the potential of nuclear energy in phasing out coal, as well as the recent announcements by representatives of the Polish government regarding the update of the Polish Nuclear Power Program (“PNPP”), indicating that the planned second nuclear power plant in Poland could be located in one of the post-coal mining regions. This would reduce the social costs associated with phasing out coal in regions currently dependent on the extraction/production of electricity from this raw material [3].

There are numerous studies on the impact of nuclear energy on Poland’s economic development, including one prepared by the Polish Economic Institute (PIE), which indicates, among other things, an increase in Poland’s gross domestic product by 1 percentage point in connection with the implementation of the nuclear project in our country [4]. The authors of the report also identify other positive aspects of the construction of nuclear power plants in Poland, such as support for the regions (which may be important in the future in the context of the planned second nuclear power plant in Poland) and the labor market.

We have no doubt that the European Commission is aware of these benefits and the potential of nuclear energy. We emphasize them because, in our opinion, it is essential to remember these benefits and consider the broader impact of nuclear energy on the economy, also when discussing and working on the public support system for nuclear energy in Poland and the public aid provided by the Republic of Poland for the construction of the first nuclear power plant.

Safety, Europe!

This is the motto of the Polish Presidency of the Council of the European Union, which began at the beginning of 2025 and will last until June 31 of this year. Although the issue of safety is practically unquantifiable, it should be taken into account in the assessment and work related to granting public aid for the first Polish nuclear power plant.

a) Diversification

Diversification plays a particularly important role in sources that aim to ensure the stable operation of Member States’ electricity systems, meaning sources that maintain electricity supplies even in the event of unfavorable weather conditions. The document presenting the preliminary assessment of Poland’s application refers to two potential energy sources that could act as grid stabilizers for renewable energy production: natural gas and battery systems.

In our opinion, the arguments regarding the use of natural gas in the document launching the public consultation should also focus on the security of supply of this resource to European countries, not just on its classification in climate policy or its flexibility as a source. It is true that in recent years, the entire European Union has made significant steps towards reducing its dependence on supplies from Russia, primarily driven by the European Union’s rightful opposition to the full-scale invasion of Ukraine by the Russian Federation. However, it is worth noting that the European Union’s dependence on imports from any source remains a fact that could negatively impact the European Union’s international position and its security. Consequently, excessive reliance on natural gas to stabilize the electricity systems of member states could, in a worst-case scenario, lead to a repeat of the scenario we observed in 2021-2022.

Furthermore, it is worth noting the issue raised in the European Union Hydrogen Strategy, which assumes an equal share of “domestic” hydrogen and hydrogen imported from other regions in the future demand for this fuel. Considering the potential importance of this raw material for a zero-emission industry in the European Union (the development of which is one of the priorities identified by the current College of Commissioners), a high degree of dependence on hydrogen imports may pose another threat to the security of the European Union. An alternative solution in this regard seems to be the expansion of zero-emission generation sources in the European Union and, in the event of an electricity oversupply, hydrogen production within the Member States. In our opinion, this aspect should also be taken into account when considering the coexistence of nuclear and renewable energy in Poland’s future energy mix. In particular, considering the energy losses associated with the electrolysis process, it is reasonable to consider the use of “simpler” sources for hydrogen production (green hydrogen), while meeting basic energy demand will be achieved through nuclear power.

b) System stabilisation

We would like to draw the European Commission’s attention to an aspect that often seems overlooked in the context of discussions regarding battery energy storage systems. While these systems should play a key role in the future in short-term (several days) and medium-term (several weeks) system stabilization, under current circumstances, they appear insufficient to play a role in grid stabilization, for example, between seasons. At the same time, considering the current estimates of the National Power System’s capacity to integrate renewable energy sources, ensuring a flexible and zero-emission energy source will remain crucial to ensuring the operational security of power grids in countries such as Poland.

In this context, nuclear power can play a significant role in ensuring a stable electricity supply. At least two scenarios are possible. The first assumes the harmonious coexistence of nuclear and renewable energy in the system. During periods of renewable energy overproduction, this energy can be stored and used, for example, as part of social policies aimed at combating energy poverty in the European Union. Short- or medium-term electricity storage during periods of overproduction, i.e., when energy is exceptionally cheap, offers the opportunity to mitigate the effects of price shocks during periods when renewable energy production declines (e.g., due to unfavorable weather conditions) for the most vulnerable citizens.

The second scenario assumes that energy from nuclear power plants and renewable energy sources will “compete” with each other, which will result in numerous market inefficiencies and may also be perceived as inconsistent with the “energy efficiency first” principle, to the extent that it may lead to energy waste.

Electricity market

The second crucial aspect being examined by the European Commission in its proceedings is the impact of the proposed state aid on the functioning of the electricity market in Poland and the European Union. We fully share the European Commission’s view that it is necessary to ensure that the new aid measure does not cause negative market effects, and therefore does not distort electricity trade in Poland or the European Union as a whole.

In the context of these considerations, it seems reasonable to consider another aspect that appears to have been omitted from the European Commission’s published deliberations. This concerns the willingness of consumers (especially industrial and business customers) to pay a potential “additional fee” for the reliability and certainty of electricity supply in a given quantity and time. The debate on the need to factor capacity into the pricing of electricity from a source should also be taken into account when assessing the aid measure proposed by the Polish Government. This may be particularly important in the context of the ongoing debate related to the need to protect the competitiveness of European industry, and therefore the industry’s limited tolerance for fluctuations in availability or significant fluctuations in the price of energy for these consumers. In this regard, a nuclear power plant could play a significant role in providing industry with a guarantee of both reliability and predictable prices.

Moreover, additional large volumes of electricity offered on the Polish Power Exchange would allow for further improvement of the liquidity of this market and therefore would consequently lead to improved energy availability for all consumers and, in the long run, would improve the responsiveness of market participants to market signals.

Summary

The Polish energy transition strategy largely assumes the decarbonization of stable energy sources through the expansion of nuclear capacity in Poland. This will enable both positive economic outcomes (such as the aforementioned percentage point GDP growth and the development of local specialized industries) and the assurance of a stable and clean electricity supply to consumers. It is also worth remembering that, above all, this project will accelerate and deepen the decarbonization of the Polish economy, while simultaneously creating a real opportunity to reduce the social costs of this transformation.

Due to the high CAPEX costs involved, state support is necessary to implement the investment in a nuclear power plant. In our opinion, the model proposed by the Polish Government will ensure the implementation of this project while mitigating potential risks to the operation of the power system. With this in mind, we would like to express our support for the ongoing process of granting public aid for the construction of the first nuclear power plant in Poland, as proposed by the Polish Government.

Author: Energy & Climate Team, Casimir Pulaski Foundation

[1] International Energy Agency, Nuclear Power and Secure Energy Transition. From today’s challenges to tomorrow’s clean energy systems, MAE 2022;

[2] DEsire Project. (n.d.). Publications. https://projektdesire.pl/raporty/test/;

[3] Nuclear.pl. (2025, 14 marca). Ministerstwo Przemysłu przedstawiło założenia aktualizacji PPEJ. nuclear.pl. https://nuclear.pl/wiadomosci,news,25031401.html;

[4] Polski Instytut Ekonomiczny, Ekonomiczne aspekty inwestycji jądrowych w Polsce – wpływ na biznes, rynek pracy i społeczności lokalne, 2022.