Strengthening Poland’s Nuclear Strategy through Financing, Small Modular Reactors, and International Collaboration 

Introduction 

Poland’s energy transition faces distinct challenges rooted in its overreliance on coal, aging infrastructure, and fiscal constraints. The country’s longstanding dependence on coal in Poland’s energy sector presents unique challenges as the country strives for a low-carbon future. As the tenth most manufacturing-reliant economy in Europe with a carbon-intensive energy system, Poland must navigate the complexities and uncertainties of transitioning a large energy system while ensuring competitiveness as well as economic and energy security. 

Public acceptance and the state’s capacity to develop long-term, politically durable policies underpinned by proactive planning and efficient coordination are essential to Poland’s long-term decarbonisation pathway, with nuclear playing a key role. The polls from November 2024 conducted by the Polish Ministry of Industry state clearly: 93% of Poles are in favour of building nuclear reactors in Poland and 80% are ready to accept the installation close to its homes. 

In the European Union (EU), nuclear energy plays a vital role in energy production and decarbonisation. There are 100 nuclear reactors operating in EU countries, with plans or proposals for 30 more.¹ Nuclear generators operating in EU countries have a combined capacity of 94.7GWe, and in 2024 they supported almost 23% of the EU electricity demand. The EU aims to become carbon-neutral by 2050, with more achievable intermediary milestones like the “Fit for 55” package, which targets a 55% reduction in greenhouse gas emissions (GHG) by 2030 compared to pre-industrial levels, and with a target of 90% of reduction by 2040 currently in discussion. In the Clean Industrial Deal, the flagship programme for this legislative term, the European Commission positioned decarbonisation as integral to Europe’s industrial competitiveness.  

To achieve this ambition and ensure reliable low-carbon electricity in a primarily electrified future, weather-dependent renewable energy sources must be supplemented by clean firm power sources like nuclear that generate electricity on-demand, regardless of the weather or the time of day, with minimal emissions. Beyond electricity generation, nuclear energy is suitable for applications such as district heating, desalination, and other industrial heat processes.  

A CATF commissioned analysis of Poland’s power system transformation until 2050, underscores the need for Poland to significantly accelerate its decarbonisation efforts, from expanding renewable energy capacity to scaling up other technologies, to meet its climate goals. Across all scenarios modelled within the study, nuclear power plays a substantial role in decarbonising the power system, with capacity ranges from 8 GW in the base case, accounting for 15% of the annual generation, to 21 GW by 2050.  

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In scenarios where nuclear energy is not permitted, two main trends emerge:  

1. The need for dispatchable power leads to an increased reliance on hydrogen combustion, which is likely to be a limited and expensive resource better utilised in hard-to-decarbonise sectors. In addition to hydrogen, fossil gas with carbon capture and storage (CCS) is also in higher demand, doubling the amount of captured CO₂.  

2. Variable renewable sources and transmission infrastructure would need to be expanded substantially to compensate for their intermittency, consuming vast areas of land, which may pose challenges due to land-use competition. 

CATF welcomes the Polish Government’s recent draft of update of the Polish Nuclear Power Programme (PPEJ), which offers a necessary foundation for nuclear energy in both decarbonising the Polish grid as well as providing much needed levers for retaining strong industrial base and energy security. The updated strategy better reflects the techno-economic and social realities of the energy transition. 

In response to the updated PPEJ, CATF proposes the following recommendations to further strengthen the strategy and increase the likelihood of achieving its ambitious policy objectives.  

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Recommendation 1: Update the economic modelling and integrate a financing model decision 

The proposed strategy document outlines the economics (Sub-Chapter 1.1.3) and financial model (Sub-Chapter 1.3.1) for the second nuclear power plant as key elements of the nuclear power programme³. From an economic perspective, the strategy recognises that with the appropriate business and regulatory frameworks for the energy market, nuclear energy can be the most cost-effective source of power.   

The strategy recognises that low generation costs from nuclear power plants do not automatically translate into low energy prices for consumers. This is because the total cost for end users includes not only the cost of energy generation or purchase, but also network costs, taxes, and policy-related charges. This underscores the importance of identifying a well-designed business model for EJ2, which can help reduce some of the aforementioned costs and improve affordability. 

Regarding financial models, the strategy references various global financing models and defines principles for a business model that would work most effectively in the Polish context.  

Updating the current economic modelling frameworks to incorporate key market and macroeconomic variables, including inflation, energy price volatility, and energy security considerations is essential. At the same time, a dedicated and transparent financing model should be developed to support the economically sustainable growth of the nuclear energy sector in Poland.  

A modernised financing approach combined with economic transparency will enhance the attractiveness of nuclear projects for private capital. Clear risk-sharing mechanisms and predictable revenue streams are essential to mobilise long-term investments, particularly from institutional investors. 

The Polish Nuclear Power Program (PPEJ) acknowledges the risk that nuclear reactors may be curtailed during periods of high renewable energy output (e.g., solar PV and wind), which could significantly reduce their operational hours and financial performance. However, the program does not currently propose mechanisms to ensure adequate returns on investment under these conditions.   

CATF recommends developing a reformed EU energy market model actively shaped by Member States and relevant stakeholders’ participation that enables the full integration of all low-emission energy and heat sources, including nuclear, renewables, and other clean firm capacity technologies. 

The lack of certainty regarding future revenue streams from nuclear power generation in Poland (and other EU Member States) creates a significant barrier for potential investors and increases perceived investment risk. Without long-term revenue assurance mechanisms investor confidence may remain low, threatening the timely development of critical nuclear infrastructure. Establishing a stable, predictable, and investment-friendly market environment is therefore crucial to unlocking the financial resources required for the nuclear sector to scale and contribute meaningfully to Poland’s decarbonisation goals.  

Recommendation 2: Define and integrate a clear role for Small Modular Reactors (SMR) in the updated strategy 

The updated strategy document draft (Chapter 1.3) prioritises proven technologies, such as gigawatt-scale reactors. It also mentions SMRs but does not present a clear vision for SMRs integration into Poland’s decarbonisation strategy. Although the strategy draft identifies the eventual creation of a separate SMR Roadmap, mention of SMR deployment in the government’s strategic document is kept at a minimum. It is important to recall here that the Ministry of Climate and Environment (MKiŚ) has published a draft update of Poland’s Energy Policy until 2040, as well as a draft update of the National Energy and Climate Plan, both of which also take into account plans for the construction of nuclear power plants based on SMR (Small Modular Reactor) technology.  

SMRs offer a unique opportunity to decarbonise the Polish industry and prevent deindustrialisation by co-locating SMRs near industrial sites. Multiple ongoing projects led by the industry highlight the potential of SMRs, yet there seems to be a lack of government support to advance these projects. Clear coordination is also needed across licensing timelines by the Polish nuclear regulatory authority (Państwowa Agencja Atomistyki, PAA), as well as in supply chain development, workforce planning, and public information efforts. 

The benefits of SMRs are inherent to their design. Given their smaller footprint, SMRs can be sited on locations not suitable for larger nuclear power plants and near consumption centers, such as industrial parks. Another benefit of SMRs is their MWe power density in respect to land use; a typical 300 MWe SMR site will occupy less than 100 hectares, as shown in Annex 1. The Footprint of Large-Scale NPPs, SMRs and Microreactors.  

In a Member State, where land use is constrained by urbanisation, agriculture and other factors, SMRs are considerably more land-efficient than other clean energy technologies. This benefit is often overlooked in financial cost comparisons between clean energy technologies but should be acknowledged as a societal benefit. From coal to nuclear pathway and the recent Ministries’ communication on possible localisations confirms that former coal power plants sites could be repurposed for SMRs. The updated PPEJ proposal also highlights district heating, where SMRs could offer several solutions decarbonize Poland’s district heating system.  

CATF recommends that the PPEJ be supplemented with mechanisms to better coordinate government actions related to the development of SMRs. It is essential to establish a clear and coherent regulatory pathway for SMRs that reflects their dual role in providing both electricity and process or district heat.  The current version of the PPEJ lacks strategic assumptions, regulatory provisions, as well as environmental and technical analysis regarding the use of heat generated by SMRs. 

Recommendation 3: Establish synergies between gigawatt-scale nuclear power plants and small modular reactors 

SMRs can provide energy and power for applications where traditional plants are too massive for the demand or where sites lack the infrastructure to support a large unit. This includes smaller, isolated areas, smaller grids, sites with limited water and acreage, and industrial applications. SMRs are expected to be attractive options for replacing aging, retiring fossil fuel plants, or for providing additional clean energy for industry. In addition, SMRs can be coupled with other energy sources, including renewables and fossil energy, to leverage resources and produce higher efficiencies and multiple energy end-products while increasing grid stability and security.⁴ Some advanced SMR designs can produce a higher temperature process heat for either more efficient electricity generation or industrial applications. 

The updated nuclear strategy document would benefit from clearly outlining the approach to integrating SMRs into Poland’s energy strategy. It should cover: 

• SMR capacity to come forward by 2040

• Expand on the potential government support for SMR projects

• Types of applications to be supported by the State (e.g., electricity generation, district heating, industrial steam, hydrogen production)

• Harmonisation of infrastructure development plans

• Planning/scheduling licensing slots due to limited resources within the regulatory body PAA

• Supply chains integration into local context

• Possible financial mechanisms based on Power Purchase Agreements and Contracts for Difference

• Integrated planning the construction of the New Radioactive Waste Surface Repository as well preparations for the construction of the Deep Radioactive Waste Repository (GSOP) for all types of reactors planned for deployment in Poland. 

Recommendation 4: Present a clear vision for development of the second nuclear power plant – EJ2 

Although the Polish Nuclear Power Program (PPEJ) refers to the development of a second nuclear power plant (EJ2), it does not provide a clearly defined development pathway. This lack of specificity may hinder coordination, delay implementation, and increase perceived risk for stakeholders and investors.  

CATF recommends that the Polish Nuclear Power Program (PPEJ) be expanded to include a coherent strategy for the financing, management, and implementation of the second nuclear power plant project (EJ2), which should encompass the following elements:  

• Clear designation of a project leader 

• A preferred financing model that is compliant with EU regulations

• Identification of a priority site and an indicative implementation timeline including selection of technology provider

• Integration with the national electricity grid, district heating systems, and national decarbonization plans

• A description of the current state of infrastructure preparedness to accommodate nuclear-generated electricity and heat, along with a preliminary assessment of the scale of necessary investments

From an investor’s perspective, the absence of a detailed, government-backed roadmap for EJ2 increases uncertainty regarding timelines and revenue streams. A comprehensive and transparent strategy would not only improve coordination across government agencies but also reduce investment risk, thereby making the project more attractive to both domestic and international capital. 

Recommendation 5: Abandon plans for reprocessing of nuclear spent fuel 

The document indicates that Poland is considering the reprocessing of spent nuclear fuel. CATF strongly advises against pursuing this option. 

Reprocessing increases the risk of creating a so-called plutonium economy, which carries significant proliferation risks and could directly impact security in Poland and across Europe. A key feature of a plutonium-based system is the industrial-scale separation and transport of plutonium, which heightens the risk of proliferation—namely, the unauthorized acquisition of this material for military purposes. Moreover, the development of technologies required to close the nuclear fuel cycle is both time-consuming and costly, potentially delaying the overall timeline of Poland’s nuclear energy program. 

Recommendation 6. Strengthen cross-regional and international collaboration 

Poland should actively engage with neighbouring countries in the region to form strategic partnerships that can enhance the collective capabilities of the CEE region. These partnerships would allow for a cohesive framework to be in place, and share best practices, regulatory standards, and technological advancements in the region. CEE regional collaboration would also facilitate the development of a coordinated supply chain for SMRs and other technologies, ensuring a more efficient and resilient nuclear infrastructure across the region. 

Poland could also position itself as a leader and hub for nuclear skills and services, to attract and cultivate expertise in nuclear technology. This can be achieved by fostering educational and training programs in collaboration with regional partners and academic institutions and therefore building a skilled workforce that supports both domestic and regional nuclear projects.  

Going a step forward, Poland could pursue partnerships with global leading nuclear energy nations and organisations (such as International Framework for Nuclear Energy Cooperation), engaging in joint research initiatives, technology exchanges, and collaborative safety assessments. These efforts will not only enhance Poland’s technological capabilities but also contribute to the development of a robust and interconnected global nuclear energy community. 

By strengthening these collaborative efforts, Poland can drive innovation, improve project efficiencies, and ensure a more secure and sustainable nuclear energy future. 

Conclusion 

CATF welcomes the proposed update of the Polish Nuclear Power Program (PPEJ) as a timely and necessary step toward strengthening Poland’s energy security and decarbonisation efforts. We believe that incorporating a clear, actionable vision for the development of both large-scale and small nuclear technologies grounded in sound financing model, regulatory clarity, and system integration will be critical to the program’s success. At the same time, avoiding proliferation risks by excluding spent fuel reprocessing aligns with international best practices and reinforces Poland’s role as a responsible leader in the clean energy transition. Together, these recommendations can help ensure that Poland’s nuclear strategy delivers lasting climate, economic, and security benefits. 

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Annex 

Annex 1. The Footprint of Large-Scale NPPs, SMRs and Microreactors