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POLAND

(updated on Dec. 2004¹)

1.  ENERGY, ECONOMIC AND ELECTRICITY INFORMATION

1.1.  General overview

1.1.1.  Geographic features

The Republic of Poland is located in Central Europe and is bordered by Belarus 605 km, Czech Republic 658 km, Germany 456 km, Lithuania 91 km, Russia (Kaliningrad) 206 km, Slovakia 444 km and Ukraine 428 km. Its area is 312,685 km2, mostly a flat plain with mountains along the southern border. The highest point is mount Rysy, 2,499 m above the sea level.

The population amounted at the level of 38,180 million of inhabitants as of June 30, 2004. Poland consists of 16 administrative regions (voivodships). The capital city, Warsaw, is located in the east-central part of the country and has a population of about 1.7 million. Other major cities include Lodz (779 thousand of inhabitants) and Krakow (758 thousand of inhabitants).

In accordance with the Constitution of April 2, 1997, Poland is a democratic, parliamentary republic based on a three-power system: executive (President, Government); legislative (Sejm, Senat); and judicial. The President is elected by general election. Prime Minister and, upon her/his recommendations, the Ministers, who constitute the Government, are being nominated by the President. The Government and its program need to receive votes of confidence by the Parliament. The Parliament, also elected in general elections, consists of the lower chamber, the Sejm (460 seats), and the upper chamber, the Senate (100 seats). Judicial power is vested to independent courts with the Supreme Court on top of the judicial system. The Constitutional Tribunal safeguards the compliance of legislative and executive acts with the Constitution. The Sejm and the Senate, presided by the Speakers, form the National Assembly. The Supreme Chamber of Control (NIK), the chief organ of state auditing, is subordinated to the Sejm. The Provincial Governors (Voivodas) represent the government and the state administration in the provinces.

Poland joined the NATO partnership for Peace in 1994 and the Organization for Economic Cooperation and Development (OECD) in 1996. In 1998 Poland became a member of the North Atlantic Treaty Organization (NATO). In May 2004, Poland became a member of the EU. Poland is a member of the United Nations Organization, the United Nations Industrial Development Organizations (UNIDO), the United Nations Educational, Scientific and Cultural Organization (UNESCO), the International Monetary Fund (IMF), the World Bank, OECD (however, Poland has not been given a membership of the NEA/OECD), the Convention for the Protection of Intellectual Rights, the World Trade Organization (WTO), the European Bank for Reconstruction and Development (EBRD) and other international bodies.

The country inherited from the past regime severe environmental degradation, particularly as a result of energy production. The main energy-related environmental problems are air pollution from burning coal and lignite in power and district heating plants and water pollution related to coal mine dumping of saline water into the Vistula and Odra rivers. The situation has improved since 1989 because of the decline of heavy industry, increased environmental protection activities in accordance with the international agreements and EU standards. Nonetheless, air pollution remains a serious problem, especially as sulfur dioxide and nitrogen oxide emissions from coal-fired power plants are concerned.

1.1.2.  Population

Poland, after the change of the political system suffers from declining population. This situation is caused by several phenomena, out of which the fall of birth rate is overwhelming. The Central Statistical Office of Poland is forecasting a further decrease over the next 25 years. It is expected that in 2030 the number of inhabitants of Poland will only be about 35.7 million. It will cause certain problems to the national economy because of a growing number of elderly people.

TABLE 1. INFORMATION ON POPULATION

 Source: World Bank World Development Indicators

1.1.3.  Gross Domestic Product

Under the previous regime, Poland's economy was ineffective. Since 1989, after the change of the old political system there began the restructuring process of the Polish economy which was accompanied by the dissolution of the Eastern bloc, the downfall of the Soviet Union, a deep economic crisis in the countries of the region, the dissolving of Comecon - the Council on Mutual Economic Assistance, and by the end of the 1990s, the economic crisis in Russia - all resulting in the loss of traditional target markets and cooperation relations, a fall of economies in the countries affected (limited export opportunities for Polish goods and services, growing expansion of foreign goods into the Polish market, imbalanced exchange in the foreign trade). This resulted in a short lasted fall of the Polish economy in the years 1990-93.

Since that time positive results of the restructuring have been noted. Inflation dropped to approx. 3,3 % (2004), market shortages disappeared, and the range and quality of products improved. A number of new types of services were created (e.g. consulting, advertising, accounting, broking agencies, private notaries), the value of the zloty (PLN) appreciated, a denomination of the zloty took place in 1995 (10.000 old zlotys = 1 new zloty), the exchange rate was freed and requirements of the International Monetary Fund for convertibility of the national currency were met. In addition, Poland's foreign trade was geographically reoriented from Comecon towards OECD markets. The Polish currency has become convertible to hard currency in 2000. The Warsaw Stock Exchange was opened in October 1996, it became a regular member of the International Federation of Stock Exchanges (FIBV).

Over the transition period the structure of the national economy has changed: the share of industry in GDP generation decreased from 44.9% in 1990 to 23.7% in 2004; and that of agriculture from 7.2% to 2,9 %. The share of services increased from 37.5% up to over 50%. Since 1992, the Polish economy has been showing a stable rise,. The growth goes along with a decline in the average number of employees in the national economy, which indicates a significant improvement in labor productivity. However, in the labor market this situation ha resulted in a disadvantageous rise of the unemployment level to 19,1 % in 2004.

TABLE 2. GROSS DOMESTIC PRODUCT (GDP)

Source: World Bank World Development Indicators

1.1.3.  Estimated energy reserves

Poland is one of the largest coal producers in the world. Most of the proved coal reserves, estimated at around 20 billion tons, are located in the Upper Silesian coal basin. Only about 33% of Poland's natural gas needs is being supplied by domestic sources, the remaining 67% is imported from Russia (via Belarus and Ukraine). Oil reserves are insignificant and are sufficient for only about 4% of current demand. The vast bulk of oil and liquid fuels is therefore imported either from Russia or from the North Sea and Arab countries. There are no uranium ore in Poland. Potential hydro power capacities are estimated at 14 TWh of yearly electricity production.

TABLE 3. PRIMARY ENERGY RESOURCES (as of 31.12.2003)

1.1.4.  Energy statistics

Statistical energy data for Poland show a moderate growth of energy consumption over the past 15 years despite a substantial growth of GDP. This is a result of the market oriented transformation, resulting in a change of the national economy structure, as well as the implementation of new energy efficient technologies in the Poland's economy, owing to the inflow of foreign investments based on the modern technology.

TABLE 4. BASIC ENERGY INDICATORS FOR POLAND

Source: IAEA Energy and Economic Database
 

TABLE 5. ELECTRICITY PRODUCTION AND CAPACITY

TABLE 6. ENERGY RELATED RATIOS

Source: IAEA Energy and Economic Database
 

1.2.  Energy policy

On January 4, 2005, the Government of Poland adopted a document on updated energy policy of Poland to 2025. The new policy is in line with the energy policy of the European Union. Main goals of the policy are the following:

• Assuring the energy security of the country;
• Assuring growths of competitiveness and energy efficiency of the national economy;
• Protecting the environment against negative impact of the energy sector.

The general goals of the energy policy are to be achieved, inter alia, by:

• enhancing by the legal and regulatory instruments a balanced structure of the primary energy supply with preferences to use domestic coal and lignite resources to the extent which is harmonized with the ecological requirements;
• further implementation of competitive markets of electricity and gas in accordance with the European Union energy policy;
• assuring a rational level of energy costs in the national economy through improving its energy efficiency, also in the energy sector;
• legal enforcement of the role of local governments in preparing and implementing local plans for electricity, gas and district heat supply;
• improving the present system of promotion of generation of electricity and heat by renewable sources and in cogeneration mode by the introduction "green certificates" and allowing for their trade;
• balancing interests of energy consumers and suppliers in order to improve security and quality of energy supply;
• using the regulatory as well as the restructuring instruments, in companies being still owned by the State Treasury, for building a market oriented structure of economically sound energy enterprises.

For the first time since the change of Poland's national economy, the following statement on nuclear energy has appeared in the energy policy document of Poland:

"Regarding the necessity of diversification of primary energy carriers and limitation of emission of greenhouse gases to the atmosphere, the introduction of nuclear energy into the Polish energy system is justifiable. However, the implementation of nuclear power will need a public acceptance. The forecasts show a necessity to get electricity generated by nuclear power plants already in the second decade of the century. Therefore, taking into consideration the necessary lead time for preparation and construction of the first NPP in Poland, it is an inevitable need for launching a public debate of that issue as soon as possible."

The energy policy document refers to general forecasts of primary and final energy harmonized with the general forecast of the national economy development. Forecasts up to the year 2025 show that electricity consumption will grow by ca. 90%.

1.3.  Electricity sector

Hard coal and lignite are the basic fuels for the power generating industry in Poland. In 2004, coal and lignite were used to generate 97% of the domestic electricity. The total installed capacity amounts to 34.5 thousand MW , and gross electricity generation to 145 TWh. Hydropower plants refer to about six per cent of the installed capacity (mainly in pumped storage power stations). In October 1995, CENTREL (the system formed by Polish, Czech, Hungarian, Slovak and German VEAG electric power systems started synchronous operation with the UCTE network. Since May 2001, Poland has been a fully authorized member of UCTE and since November 2001 - an associated member of ETSO.

In 2004 the installed capacity (gross) in Poland amounted to 34.5 GW. The current structure of the electricity generation plants is the following:

Power demand in 2004:

Source: Energy Market Agency SA (http://www.are.waw.pl)

Domestic electricity production gross reached the level 154.1 TWh (net 140.1 TWh}. Export - import balance was positive (9.3 TWh) because of the increased export to Skandinavian countries. Electricity generated in cogeneration with heat (CHP) amounted at 32.8 TWh.

The Polish power sector is needs a huge modernization and refurbishment effort in order to create an economically efficient industry capable to meet demand requirements. Generation capacity construction in Poland over the past 30 years, has resulted in an aging system that is becoming an increasingly serious problem. More than half of the current capacity was built in the 1970s. Approximately 60% of the capacity are more than 15 years old, and 40% is more than 20 years old. More than 1.5 GWe has been in operation for more than 30 years.

Electricity consumption by final customers 12.7 TWh)has started to grow which may reflect the end of the transformation effect when there have been used the structural reserves of electricity use efficiency.

Generation plants are owned by several power generation companies:

The transmission network is owned by Polish Power Grid Co by operated by PSE Operator Co as a separate legal body, in accordance with the EU law.

The distribution grids are being owned and operated by distribution companies: ENEA, ENERGA, ENION, ENERGIAPRO, STOEN, GZE and other smaller companies to be soon consolidated. According to the EU Directive 2003/54/EC distribution companies by July 1, 2007, are to create distribution system operators, also as independent legally companies.

For the near future the power sector in Poland will meet several challenges related to:

• Environment protection because of the domination of coal and lignite in the fuel mix for the power sector;
• Necessity to diversify the structure of the primary energy for power generating;
• Dissolving of PPAs concluded between generators and PSE and settlement of related stranded costs;
• Investment financing in the competitive electricity market.

According to the EU requirements there has been implemented a competitive electricity market based on regulated TPA (third party access) which consists of three segments:

• Bilateral contracts between eligible consumers and suppliers (generators and traders);
• Spot transactions on the Polish Power Exchange;
• Balancing transaction on the Balancing Market being run by the Transmission System Operator (PSE-Operator).

The pace of the power sector development will depend on the economic conditions, especially the possibilities of financing the necessary investments in the competitive energy market environment. The share of gas fired plants will grow with a pace harmonizing the growth rate of gas prices and environment protection requirements, especially related to CO₂ emission limits. There will be a growth of electricity generation from renewable sources, forced by the EU requirements, but not to the extent that would substantially influence the energy balance. It will be extremely difficult for Poland to fulfill the ecological requirements of the Accession Treaty concerning SO₂ and NO_x emissions.

For economic reasons, in any development scenario there is a strong need for nuclear power plants to be put in operation as soon as possible. Unfortunately, because of the necessary lead time for acquiring social acceptance and preparatory works of nuclear investments. The first NPP in Poland is scheduled only for the years 2020-2022.

2.  NUCLEAR POWER SITUATION

2.1.  Historical development

Poland has an unfortunate history of the nuclear power industry development. Under the previous regime construction of the first Polish NPP in Zarnowiec (north of Poland) started in 1982 but then it was stopped in 1992. The decision to stop the construction was caused mainly by the Chernobyl accident, when the Polish society was almost totally against that plant, and also by the change of the political system that resulted in a huge shock to the national economy and the break of the inherent cooperation between COMECON countries in building nuclear power plants in member countries. The withdrawal from the nuclear program generated about $US 1.5 billion losses. After that event the issues related to the nuclear power has been treated as non-existing in Poland.

Nowadays, when serious ecological problems of the Polish power industry have to be solved, the approach of the majority of Polish politicians and also the Polish public has positively changed. The latest polls show that there is more people accepting the nuclear technology than the contestants. Almost all components of the nuclear power infrastructure that were being prepared for the NPP Zarnowiec have been lost. The only part which survived is the Atomic Energy Law and the organizations responsible for nuclear and radiological safety.

2.2.  Current policy considerations

Based on the new energy policy, where there are statements about a necessity to revive the nuclear power issue, many organizations in Poland and abroad have shown their interest to participate in the development of nuclear industry in Poland. The State is not going to finance the construction of the NPPs, but, in accordance with the EU law, is obliged to organize legal framework for acquiring private investors. Such provisions exist in the energy law, according to which the President of the Energy Regulatory Authority is obliged to announce an open tender for new generating sources in case when there is no market supply of new sources. This procedure probably will be applied for choosing the investor for the first NPP in Poland.

2.3.  Suppliers of NPPs

At present, there are no Polish entities able to supply NPPs. However, many companies in Poland can cooperate in manufacturing NPPs' equipment, and also in construction works. Some companies have already been engaged for construction of the new Finnish NPP.

2.4.  Operation of NPPs

As yet, there is no NPP in operation in Poland.

2.5.  Fuel cycle and waste management

The only facility of the back-end of nuclear fuel cycle exists in Rózan. This is a near-surface repository for short-lived radioactive waste. Every year it received about 300 m3 of solidified, compacted low and medium level radiation waste from medicine, industry, research and the research reactor in Swierk. Because some tritium releases were observed, it was decided to close the site. At the moment there is no permanent storage facility for high radioactive waste. The Government will resume work started in 1994 to develop a new storage facility for low and medium level radioactive waste and plans to identify storage options for radioactive waste and spent fuel in deep geological formations.

2.6.  Research and development

There exist in Poland several research institutes related to nuclear energy. The most important are following:

The A. Soltan Institute for Nuclear Studies at Swierk-Otwock which comprises six research departments located in Swierk, three in Warsaw and one in Lódz plus the establishment for nuclear equipment (ZdAJ, manufacturer of medical accelerators and other instruments). The Institute is a state owned institution and carries out pure and applied research on subatomic (i.e. the elementary particles) and nuclear physics, hot plasma physics and related fields. It also produces specialized equipment for various applications (notably for medicine and environmental protection).

The Institute of Nuclear Chemistry and Technology (INCT), Warsaw, is specializing in radiation chemistry and technology, application of nuclear methods in material and process engineering, design and production of instruments based on nuclear techniques, radio-analytical techniques and environmental research. Basic research is focused on radiochemistry, chemistry of isotopes, physical chemistry of separation processes, cellular radiobiology and radiation chemistry.

The Institute of Atomic Energy, Otwock-Swierk, equipped with 30 MWth MARIA research reactor is dealing with reactor physics and nuclear engineering, nuclear safety, radiation protection, radioactive waste management, application of nuclear techniques in industry, science, environmental protection, condensed state physics, and computing techniques. It is also a producer of unique specialized equipment. The Institute is also equipped with devices for the identification of nuclear materials.

The Central Laboratory for Radiological Protection (CLRP), Warsaw, carries out works in the field of monitoring environmental radioactivity; personal dosimetry, controlling the use of radioactive sources, research on mechanisms of influence of radiation to biological organisms, behaviour of radionuclides in the environment; development of dosimetric methods, calibration, control and standardization of dosimetric equipment and training for radiological protection officers.

The H. Niewodniczanski Institute of Nuclear Physics, Kraków, is specialized in theoretical and experimental research in the following fields: high energy and elementary particle physics, physics of the structure of the nucleus and of nuclear reaction mechanisms, studies of the structure, interactions and properties of condensed matter, applications of nuclear methods in geophysics, radiochemistry, medicine, biology, environmental physics and materials engineering. The Institute of Nuclear Physics in Krakow now belongs to the institutions working under the Polish Academy of Sciences.

The Faculty of Physics and Applied Computer Science of the University of Science and Technology AGH in Krakow, is involved in theoretical and experimental aspects of elementary particles physics, solid state physics, theoretical and computing physics, nuclear electronics, radiation detectors, X-ray fluorescence and microdosimetry, hydrology and gas chromatography, nuclear geophysics, effective energy conversion, medical physics and industrial radiometry. The research programs are carried out in close collaboration with many international laboratories and centers (e.g. DESY, CERN).

The Nofer Institute of Occupational Medicine (NIOM), Lódz, has as primary task to conduct R&D activities and provide expertise on health hazards arising from occupational and environmental exposure to noxious agents. The multidisciplinary nature of the research performed at NIOM makes it possible to address complex environmental and health related problems.

2.7.  International co-operation and initiatives

Poland cooperates with many international organizations dealing partially or fully with nuclear issues. first of all with the IAEA. With 66 TC projects implemented over the period from 1976 to 2004 Poland has benefited greatly from the Agency's technical assistance program. During the period 1993-2004, around US$ 11,8 million worth of assistance was provided through 34 national TC projects. Poland also actively participated in regional and interregional TC projects. In that period financial assistance of around US$ 2.5 million was delivered using extra-budgetary resources from donor countries, including Japan, USA, EU and others. The Agency technical assistance covered a very broad spectrum of fields, ranging from energy planning, radiation protection, nuclear safety, decommissioning of the EWA research reactor, to many practical applications in physics, chemistry, medicine, hydrology and environmental protection. This permitted the upgrading of the technical infrastructures of the main research nuclear institutions that were involved in the activities. In the last decade the Agency program resulted in successful and sustainable applications.

2.8.  Human resources development

Since the collapse of the former nuclear development program in Poland the human resources for the nuclear industry have practically disappeared. Most of the specialists that had been trained within the program have changed their professional profiles, some emigrated and got jobs abroad. The new perspectives for the nuclear power in Poland will create needs for education of the key personnel necessary to develop the nuclear infrastructure and for the first and next NPPs. Only one technical university has maintained the nuclear power specialty at engineering courses (Silesian Technology University). An education program is now being prepared.

3.  NATIONAL LAWS AND REGULATIONS

3.1.  Atomic Energy Law

The Atomic Energy Act adopted on 29 November 2000 defines the activities related to peaceful use of atomic energy, the duties of the head of the organization conducting these activities, the authorities competent on safety and radiation protection and the principles of third party liability for nuclear damage. According to the Act licenses are issued by, or notification made to, the President of the NAEA. License for medical X-ray equipment up to 300 kV is issued by the sanitary inspector of the Provincial Governor (wojewoda) or by the military sanitary inspector in case of entities under the Ministry for National Defence.

In January 2002, a number of implementing decrees to the new Atomic Law of November 2000 was issued. The new law provides for a clearer separation of responsibilities between the National Atomic Energy Agency (NAEA) (which is the regulatory authority) and the operators of nuclear facilities as those at the Swierk nuclear center. The new act creates the framework for the introduction of Euratom safeguards.

In 2004 the Atomic Law was amended and entered into force on 1 May 2004. All the regulations implementing the amended Atomic Law, except those concerning matters connected with medical uses of atomic energy, have already entered into force. Presently a new amendment, arising from the necessity of implementing the European Union Council Directive on the control of high activity sealed radioactive sources, is under preparation.

3.2.  Energy Law

The Energy Law of 10 April 1997 defines the principles of the development of the state energy policy, principles and terms of supply and use of fuels and energy, including heat, and operation of energy enterprises. It also determines the competent organs in issues of the fuel and energy economy. The purpose of the act is the creation of conditions providing for sustainable development of the country, energy security, efficient and rational use of fuels and energy, development of competition, counteracting negative consequences of the existence of natural monopolies, consideration of requirements concerning the protection of the natural environment and obligations stemming from international agreements and protection of consumer interests and rationalization of costs.

As a result of applying the provision of this act, a free competitive market has been created for the production and trade in electric energy, with all issues relating to the energy economy to be supervised by the Energy Regulatory Authority.

The act consists of provisions on:

-
• Obligations of energy enterprises which deal with the transmission and distribution of fuels or energy;
• Supplying fuels and energy;
• Supplying fuels and energy by natural monopolists - Chapter 2, Article 7;
• Providing transmission grid services,
• Resolving disputes between an energy enterprise and the customer;
• Emergency supply of fuels and energy;
• Obligations of keeping fuel reserves
• Development of unconventional energy sources, including renewable energy;
• Guidelines for the state energy policy;
• Tasks of the President of the Energy Regulatory Authority;
• Licensing energy enterprises
• Rules of price creation - tariffs
• Energy efficiency issues.

The Energy Law has significantly differentiated the roles in respect of energy management. On public administration organs, it has imposed the obligation to prepare the energy policy. Communes have been granted the right to decide on how local energy needs shall be covered.

According to the Energy Law, a license is required to conduct business activities in the following areas:

• Production of fuels (with the exception of solid fuels) and energy, provided that generation of electric energy in the sources equals or exceeds the capacity of 5 MW; production of gaseous fuels from the liquid gas; generation of heat in the sources of the capacity equal or exceeding 1 MW;
• Storage of gaseous and liquid fuels excluding local storage of liquid gas in the installations of capacity below 1 MJ/sec,
• Transmission and distribution of fuels and energy with the exception of heat if the capacity ordered by customers does not exceed 1 MW;
• Trade of fuels and energy with some exclusions.

Upon granting a license, the President of Energy Regulatory Authority verifies whether the business activity conforms to the public interest and the state energy policy. The license may be granted to an applicant who has its registered office or place of residence in Poland (upon the day of Poland's accession to the EU - in the territory of an EU Member State), is in possession of relevant funds and technical capabilities, and will ensure the employment of personnel with relevant professional qualifications.

3.3.  Main governmental organizations responsible for the development of the nuclear program

The Ministry of Economy and Labor is responsible for assuring the energy security and also for the peaceful uses of atomic energy. The Ministry is controlling all the scientific entities acting in the nuclear/atomic field (except universities and the Institute of Nuclear Physics in Krakow).

The National Atomic Energy Agency (NAEA), functioning under the Ministry of Environment, is the regulatory body responsible for nuclear and radiation safety. At the same time is the main liaison body for technical cooperation matters with the IAEA. The NAEA is advised on R&D and nuclear policy matters by the Council for Atomic Energy Matters, having as members about 40 eminent Polish scientists, heads of Institutes and University professors.

The Energy Regulatory Office is the regulatory body responsible for granting licences for energy related activities in accordance with the energy law, energy tariff setting, and supervising the electricity, gas and district heat markets.

REFERENCES

Appendix 1

INTERNATIONAL, MULTILATERAL AND BILATERAl AGREEMENTS

Multilateral Agreements

Safeguards Agreements

Appendix 2

DIRECTORY OF THE MAIN ORGANIZATIONS, INSTITUTIONS AND COMPANIES INVOLVED IN NUCLEAR POWER RELATED ACTIVITIES

All necessary information on can be found on the following web-sites:

Department of Energy Security, Ministry of Economy and Labor (Ministerstwo Gospodarki i Pracy) http://www.mgip.gov.pl

National Atomic Energy Agency (Panstwowa Agencja Atomistyki) http://www.paa.gov.pl

Energy Regulatory Office (Urzad Regulacji Energetyki) http://www.ure.gov.pl

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1. The statistical tables in this profile have been updated with data as of the end of 2007 from IAEA databases, namely the Power Reactor Information System (PRIS) and Energy and Economic Data Bank (EEDB), and the World Bank's World Development Indicators (WDI).