EU Commission to investigate Poland's nuclear power plant state aid

In September 2024, Poland informed the Commission of its plan to support the state-owned company Polskie Elektrownie Jądrowe (PEJ) in the construction of the nuclear power plant. The plant is expected to start operations in the second half of 2030, with a capacity of up to 3750 MW.

The total investment cost is estimated at around 45 billion euros (192 billion PLN). The plant is intended to increase energy security for Poland and neighboring countries, assist in decarbonizing the energy sector, and diversify Poland’s energy mix.

Poland plans to support this investment through: an equity injection of approximately 14 billion euros covering 30% of the project’s costs, state guarantees for 100% of the debt taken by PEJ to finance the project, and a two-way contract for difference (CfD) that ensures stable revenue over the plant’s 60-year operational life.

This type of contract guarantees the purchase of the electricity produced at a fixed price for the duration of the agreement.

Based on a preliminary assessment, the Commission has concluded that the support package is necessary and has an incentivizing effect, as the beneficiary would not proceed with the project without public support.

However, the Commission has concerns about whether the measure fully complies with EU state aid rules. As a result, it has decided to launch a formal investigation.

The Commission notes that since there are three different forms of support (equity, guarantees, and the contract for differences), which collectively reduce the risk, it is important to ensure that the total aid granted does not exceed what is absolutely necessary.

In particular, the Commission will examine whether the 60-year duration of the contract for differences is justified, considering the other two forms of support, and whether there may have been other companies interested in undertaking the project, which could have led to a smaller amount of aid.

The Commission will also assess the impact of the aid package on competition in the electricity market and whether it is limited to the minimum required. It will evaluate whether the contract for differences sufficiently encourages the plant to "operate and participate efficiently in the electricity markets, within its technical capacity."

"This is important to minimise market distortions, facilitate the integration of renewables, and allow the electricity system to move towards decarbonization," the Commission stated.

The start of the investigation gives Poland and other interested parties the opportunity to submit comments. This does not prejudge the outcome of the inquiry.

Under the Treaty on the Functioning of the European Union, Member States have the freedom to determine their energy mix, the conditions for utilizing their energy resources, and the overall structure of their energy supply. The decision to promote nuclear energy is within national competence.