Small Modular Reactors in Poland – first approach to the topic

I am returning to my blog, after months of break. I have been busy with the strictly scientific writing, and I discover every day, over and over again, that I have a finite amount of energy and focus. I keep circling around the topic of business models and business structures in the energy sector. I’ve read a lot of annual reports published by companies from the energy sector, and I have learnt a lot. Something like a year ago, when I essentially stopped blogging regularly, I would say I was all about renewable energy and about the ‘let’s save the planet’ thing. Now, I am much less sectarian. Warren Buffett is right: studying corporate reports is eye-opening. One of my re-discoveries as I have been looking inside businesses is that we can collectively do only the things which we know how to do, and therefore which we have practiced and learnt how to do. The rest is marketing slogans, applied to control crowds of useful idiots, by steering their outrage at their own existence. Therefore, now, when somebody approaches me with the ‘let’s save the planet’ story, I ask politely: “My friend, do you know how to save the planet? As a matter of fact, do you know how to save any planet? How many planets have you saved so far? How can you substantiate your claims?”.

Yet, bullshit put aside, energy transition is interesting. I think we are experiencing a somehow unprecedented multitude of energy sources. We have fossil fuels under many forms. We have wind. We have at least two different forms of solar: the photovoltaic and the concentrated solar power (CSP). We have nuclear coming in three sizes: the L (large scale reactors), the M (Small Modular Reactors), and the S (microreactors).

Another thing which I learnt from the comparative reading of corporate reports, on the one hand, and scientific articles, on the other hand, is that published social science is lagging far behind real-life. Just to give a quick example, many of my fellow scientists are firmly convinced that the development of solar farms is a technological breakthrough, and on the path of that breakthrough, the champions of planet-saving change struggle to keep their head above the water when fighting the villains of status quo. No. The business of solar farms is among the fastest growing businesses in the world, and in my home Europe, and in my even more intimate home Poland. The bulk of that business is based on well-known technologies, tested to the point of being officially certified for use in big power systems. The business is mostly about acquiring the really attractive solar assets, and possibly about trading them subsequently to someone else. Solar assets are land, in the first place. The solar installation is cheap and easy to build. The hard part is to acquire land, which: a) is acceptably close to consumers of energy b) is withing reach of bulk connection points in the power grid c) is abnormally cheap and, at the same time, there are no legal problems coming with it.

There are two technologies in the energy sector which somehow fascinate me with their economics: Small Modular Reactors (SMRs) and hydrogen. The former has recently started to grow very fast, after years of seemingly sterile discussions. In my home country, Poland, two different projects of SMR have been initiated. Hydrogen, on the other hand, is fascinating because it evolves so slowly, in spite of great hopes.

I am focusing on the SMRs, as my government has significantly changed the national energy policy in that respect. You can consult to know more. Suddenly, the development of SMRs has become a national priority. Two projects are on the table:

  1. Project #1, based on a technology called VOYAGR ( ). This is a joint-venture between the Polish mining company  KGHM ( ) and the U.S.-based company NuScale Power ( )

In 2022, the Polish government significantly modified the national energy policy, by putting strong emphasis on distributed energy resources, and, among them, an even stronger emphasis on Small Modular Reactors ( Two projects are currently on the table:

For the sake of simplicity, these two projects will be further labelled by the names of the respective technologies involved, i.e. VOYAGR and BWRX-300. They display very different degrees of institutional development. The VOYAGR project seems to be stuck at the level of preliminary formalities. In the annual report of KGHM for 2022, we can read that “”On  14  February  2022,  KGHM  signed  the  Early  Works  Agreement  with  NuScale  Power,  LLC  (the  nuclear  technology provider), representing the first step in the implementation of SMR technology within the KGHM Group’s business operations.  On 20 April 2022, KGHM and TAURON Polska Energia S.A.  signed a letter of intent on cooperation in the scope of construction of low-emission energy sources, including using small modular nuclear reactors (SMRs). On 8 July 2022, the Company submitted the first application concerning the safety assessment of the small modular reactor technology considered by the Company to the  State Atomic  Agency.  On  6  September  2022,  KGHM  Polska  Miedź  S.A.  and  SN  Nuclearelectrica  SA  signed  a memorandum on cooperation on the development of SMR. A preliminary site assessment report for the SMR reactor is currently being developed“. In a later presentation by KGHM, dating from April 2023 ( ), we can read that ” KGHM plans to build a small modular light water nuclear unit with a capacity of up to 500 MW by 2030. In 2021, KGHM Polska Miedź S.A. established a Nuclear Energy Department and in February 2022 a contract was signed with NuScale Power, LLC (“NuScale”) to commence work on implementing the SMR technology in Poland.

Additionally, in April 2022, KGHM signed a letter of intent with Tauron Polska Energia S.A. regarding research, development and future investment projects with respect to the construction of energy generation sources utilising SMR nuclear power technology ( ).

As regards the provider of technology in the VOYAGR project, namely NuScale Power Corp., there is a trace of cooperation with KGHM since September 2021, when both parties signed a first memorandum of understanding ( ). On February 14th, 2022, a further going agreement was signed, to initiate the Deployment of the First Small Modular Reactor in Poland ( ). Finally, on September 12th, 2022, the parties signed a task order to further this cooperation ( ). Since then, no significant further development has been communicated to the public. NuScale Power owns 87 patents pending in Europe.

As regards the BWRX-300 project, there has been more institutional development. In December 2021, GE Hitachi Nuclear Energy, BWXT Canada and Synthos Green Energy announced their intention to Support Deployment of Small Modular Reactors in Poland ( ).

In June 2022, PKN Orlen SA and Synthos Green Energy SA formed a new entity, Orlen Synthos Green Energy sp z o.o. (KRS 0000975672), with an initial paid-in equity of 20 000 000 PLN, 50% from each of the partners. In November 2022, Synthos Green Energy SA and GE-Hitachi Nuclear Energy International LLC formed a new entity, BWRX Europe sp. z o.o. (KRS 0001004329), with an initial paid-in equity of 2 000 000 PLN, 50% from each of the partners. In March 2023, GE Hitachi Nuclear Energy (GEH), Tennessee Valley Authority (TVA), Ontario Power Generation (OPG) and Synthos Green Energy (SGE) announced they are forming a consortium to advance the global deployment of the GEH BWRX-300 small modular reactor ( ).

On April 21st, 2023, Orlen Synthos Green Energy sp z o.o. formed 19 affiliate entities, each as a limited liability partnership (PL: sp. z o.o.), each with an initial paid-in equity of 500 000 PLN, for the purposes of developing 19 local installations of the BWRX-300 technology:

  1. BWRX-300 Tarnobrzeg (KRS 0001031820)
  2. BWRX-300 Stalowa Wola (KRS 0001032414)
  3. BWRX-300 Nowa Huta (KRS 0001031830)
  4. BWRX-300 Ostrołęka (KRS 0001031827)
  5. BWRX-300 Połaniec (KRS 0001032980)
  6. BWRX-300 Bełchatów (KRS 0001031650)
  7. BWRX-300 Dąbrowa Górnicza (KRS 0001032435)
  8. BWRX-300 Grudziądz (KRS 0001031818)
  9. BWRX-300 Kozienice (KRS 0001032027)
  10. BWRX-300 Kujawy (KRS 0001032386)
  11. BWRX-300 Łaziska (KRS 0001032519)
  12. BWRX-300 Łódź (KRS 0001031895)
  13. BWRX-300 Pomorze (KRS 0001032683)
  14. BWRX-300 Poznań (KRS 0001031631)
  15. BWRX-300 Rybnik (KRS 0001032520)
  16. BWRX-300 Stawy Monowskie (KRS 0001031321)
  17. BWRX-300 Warszawa (KRS 0001032415)
  18. BWRX-300 Warta (KRS 0001032686)
  19. BWRX-300 Włocławek (KRS 0001031647)

GE-Hitachi Nuclear owns 181 patents pending in Europe.

According to recent research (Asuega, Limb & Quinn 2023[1]), the capital cost of constructing a small modular reactor is between $3 985 and $4 844 per 1 kW of electrical power. The BWRX-300 reactor has a nominal power of 300 MW, whence a unitary capital cost between $1,2 bln and $1,45 bln. Therefore, the total capital cost of 19 local deployments in the BWRX-300 technology in Poland can be estimated between $22,72 bln and 27,61 bln. The state-controlled company PKN Orlen, one of the two involved in the project from the Polish side, has currently a total equity of $33,4 bln. As regards the VOYAGR project, and if its Polish partner, KGHM, is to be held to their word of implementing an SMR of 500 MW, their capital needs for the venture will be somewhere between $2 bln and $2,42 bln for the reactor alone, with present equity of $7,15 bln.

The deployment of SMRs in Poland is vital to national security and therefore the Polish government takes a fully understandable care of controlling the flow of information on that topic. Nevertheless, with full respect for the security concerns, the deployment of SMRs in Poland means a huge absorption of capital by the Polish energy sector. It is important to start an informed public discussion about institutional vehicles for that capital flow, which, by its sheer size, will be disruptive for the capital market no matter what exact solutions will emerge. It is to bear in mind that deploying Small Modular Reactors in Poland spells breakthrough technological change. None of the technologies involved, i.e. VOYAGR and BWRX-300, has ever been fully implemented with conclusive results. Generally, SMR projects across the world are at the stage of optimal site selection (Liu et al. 2022[2]).

Such a discussion should be combined with economic research and elucidate, among others and not exclusively, the following questions:

  1. How predictable is the budget of the whole SMR programme in Poland? According to literature, nuclear projects notoriously go over budget and over schedule, even with otherwise much better-tested technologies (Mignacca & Locatelli 2020[3]; Mignacca et al. 2020[4]).
  2. Will those new investments be financed mostly with equity or mostly with corporate debt? What exact “debt to equity” ratio is to expect?
  3. How will be the required equity raised?
  4. How will the necessary borrowing be orchestrated?
  5. How will the SMR programme coexist with offshore wind projects conducted by the Polish partners of both projects? Literature suggests that the Levelized Cost of Energy (LCOE) from SMRs might not necessarily be competitive as compared to offshore wind (Fattahi et al. 2022[5]).
  6. What will be the involvement of the government, both fiscal and monetary?
  7. What will be the impact of SMRs on their local markets of energy? Just to illustrate the importance of the question, we can mention the two BWRX-300 reactors are planned in the Podkarpackie voivodship, namely in Tarnobrzeg and in Stalowa Wola. Once completed, they will add 600 MW of power to the voivodship-wide energy market, which will be a game changer for the local economy.

[1] Asuega, A., Limb, B. J., & Quinn, J. C. (2023). Techno-economic analysis of advanced small modular nuclear reactors. Applied Energy, 334, 120669.

[2] Liu, Y., Huang, G., Chen, J., Zhang, X., Zheng, X., & Zhai, M. (2022). Development of an optimization-aided small modular reactor siting model–A case study of Saskatchewan, Canada. Applied Energy, 305, 117867.

[3] Mignacca, B., & Locatelli, G. (2020). Economics and finance of Small Modular Reactors: A systematic review and research agenda. Renewable and Sustainable Energy Reviews, 118, 109519.

[4] Mignacca, B., Locatelli, G., & Sainati, T. (2020). Deeds not words: Barriers and remedies for Small Modular nuclear Reactors. Energy, 206, 118137.

[5] Fattahi, A., Sijm, J., Van den Broek, M., Gordón, R. M., Dieguez, M. S., & Faaij, A. (2022). Analyzing the techno-economic role of nuclear power in the Dutch net-zero energy system transition. Advances in Applied Energy, 7, 100103.