Polskie Elektrownie Jądrowe (PEJ), Poland’s designated entity tasked with developing the country’s first nuclear plant in Pomerania, has signed an engineering services contract with a Westinghouse-Bechtel consortium, allowing site-specific work to begin on the AP1000 power plant.
The companies announced the “historic” contract on Sept. 27, one week after nuclear technology giant Westinghouse and global engineering firm Bechtel formalized a partnership to design and build Poland’s inaugural AP1000 nuclear plant. The agreements mark significant milestones toward the commercial operation of the much-watched reactor project, which is geared to meet Poland’s goal to begin nuclear power generation in 2033.
Heavyweight Consortium for a Pioneering Project
PEJ has said that it has favored a consortium model “from the beginning,” because it provides an opportunity to take advantage of the “unique competence and experience” Westinghouse and Bechtel gained during the construction of the Vogtle expansion, a twin-AP1000 reactor project that is nearing completion in the U.S.
Bechtel, which joined the Vogtle expansion project, in Georgia in 2017, has notably designed, built, or provided services to 80 nuclear reactors in the U.S. and 150 worldwide, across all major reactor designs. “This is a team with demonstrated ability to deliver on large nuclear energy projects,” said David Durham, president for Energy Systems at Westinghouse. “The fleet experience we have earned with our advanced, proven AP1000 technology, including a 100% complete design and construction lessons learned, will serve Poland well as it seeks decarbonization and increased energy security.”
Under the 18-month engineering services contract, Westinghouse and Bechtel will jointly design the nuclear plant, though these activities will also involve Poland’s domestic industry, PEJ said. “Nearly 2 million man-hours and the support of the industry’s top professionals have been envisaged for this goal,” it noted.
The design/engineering documentation portion of the contract entails “the main components of the power plant, i.e. the nuclear island, the turbine island and the associated installations and auxiliary equipment, as well as administrative buildings and infrastructure related to the safety of the facility,” the entity said on Wednesday. “The primary objective of the conceptual design/engineering is to define the requirements and design/engineering criteria, and specify norms and standards in accordance with which the Polish nuclear project will be executed.” The engineering work at this stage will result “in more than 400 final deliverables,” it added.
The Pomeranian project will be based on Westinghouse and Bechtel’s experience in building Vogtle Unit 4, which is scheduled to be placed in service during the late fourth quarter of 2023 or the first quarter of 2024, PEJ noted. While Vogtle Unit 3 became the first newly constructed nuclear unit in the U.S. in more than 30 years to enter operation on July 31, Vogtle 4 has “introduced improvements” over Vogtle 3, PEJ said.
A Contract Designed to Ensure Performance, Smooth and Safe Operations and Maintenance
PEJ said provisions in the engineering services contract signed on Wednesday will also “regulate cooperation during the processes of obtaining further permits.” These include the development of technical specifications for the planned nuclear plant’s preliminary design. The specifications will reflect “elements of the installation used, so that [they comply] with the required performance parameters,” it noted.
However, the contract is also poised to become “the basis for another contract covering the next phase of construction of the first nuclear power plant in Poland,” it added. “The developed results will be the basis for the preparation of documentation for the purpose of obtaining a construction permit for the power plant, so as to further execute the nuclear power plant project in Pomerania based on the highest Polish and European safety standards and norms. In addition, the contract provides for an evaluation of the proposed radiological protection solutions and safety analyses planned in accordance with the requirements of the Atomic Law.”
In another significant set of provisions, the contract will support trips by Polish employees to the U.S. to help them “improve key competencies in the design/engineering and safe operation of the latest generation of reactors,” PEJ said. “In this way, the selected engineers will also be involved in executing the end results stipulated in the contract. In addition, they will gain the necessary experience coming directly from working with both Westinghouse and Bechtel.” This aspect “is particularly important from the perspective of both the investor and the government,” the entity underscored.
Treading Carefully to Ensure Continued Progress on a Planned Nuclear Expansion
Poland chose Westinghouse technology for its first large-scale nuclear plant in November 2022 amid a fierce international contest that included some of the world’s most prominent large nuclear plant vendors. As POWER has reported in detail, the project is pivotal to Poland’s broader energy plans, which are motivated by energy security concerns prompted by Russia’s aggression in Ukraine, and a rapidly expanding demand for energy from industry, including several special economic zones.
Poland has indicated it could support the construction of about 6 GW to 9 GW of large-scale, pressurized water Gen III and III+ nuclear reactor designs, “zero-emission sources” that the government projects could “account for half of the installed capacity in 2040.” The country’s February 2021 energy policy calls for its first nuclear power reactor to begin construction in 2026 and be completed by 2033.
Shortly after the Polish government’s resolution selecting Westinghouse AP1000 technology for the Pomerania plant in November 2022, PEJ signed a cooperation agreement with Westinghouse in December 2022. In February 2023, Westinghouse and PEJ concluded a contract for pre-design work. Poland had awaited a formal deal cementing terms between Westinghouse and Bechtel before formalizing the crucial engineering services contract on Wednesday.
However, the project has in tandem marked critical progress on the regulatory front. PEJ last week received a decision on environmental conditions from Poland’s General Director for Environmental Protection for the Pomerania project. The decision is a “key permit obtained in the investment process,” PEJ explained. “[S]ubsequent administrative approvals, including the location decision and the construction permit, must be consistent with the terms and conditions contained in the decision on environmental conditions,” it noted. PEJ submitted its Environmental Impact Assessment Report for a nuclear plant at the site in March 2022. In addition, Poland has wrapped up national consultations as well as consultations with 14 neighboring countries related to the project’s environmental conditions.
Nuclear Technology Legal Dispute Headed for Arbitration
A second nuclear project is reportedly under development, led by ZE PAK, one of Poland’s largest private energy groups, PGE Polska Grupa Energetyczna (PGE), a massive integrated energy firm majority-owned by Poland’s government, and South Korea’s Korea Hydro & Nuclear Power (KHNP). While the status of that project is unclear, KHNP has pursued a nuclear project based on APR1400 technology for a site in Pątnów, central Poland.
The APR1400 is a two-loop, evolutionary pressurized water reactor (PWR) design, evolved from Korea Electric Power Corp.’s (KEPCO’s) OPR1000 Korean Standard Nuclear Power Plant design and Combustion Engineering’s (now Westinghouse’s) System 80+ design. While developed for use in South Korea, KHNP in 2010 sold four APR1400 reactors to the United Arab Emirates (UAE). Three of these reactors (at Barakah) are already connected to the grid.
Westinghouse, however, has legally disputed aspects of the APR1400’s technology licensing. According to the Cranberry Township, Pennsylvania-headquartered firm, KEPCO’s Advanced Power Reactor (APR) and its variants (APR1000, APR1400, and OPR1000) are “derived from, based on, and incorporates technology” licensed to KEPCO and KHNP by Westinghouse’s “predecessor-in-interest” Combustion Engineering. Westinghouse notes it acquired Combustion Engineering in 2000, assuming the role of the System 80 and System 80+ licensor under a 1997 license agreement.
In October 2022, Westinghouse filed a complaint with the U.S. District Court for the District of Columbia, seeking injunctive relief against KHNP after it learned that KEPCO was poised to enter into a memorandum of intent (MOI) with the Polish government to deliver APR1400 nuclear plants, as well as potential deals with the Czech Republic and Saudi Arabia. In the complaint, Westinghouse asserted that KHNP’s delivery of technical information regarding South Korean reactor designs outside South Korea constitutes a “retransfer of the technology” licensed to the South Korean entities.
Westinghouse urged the federal court to rule that the APR1400 is subject to review by the U.S. Department of Energy under Part 810 of Title 10 under the Code of Federal Regulations, which implements provisions of the Atomic Energy Act. The company noted that as part of a 10-year business cooperation agreement signed in 2010, Westinghouse and KEPCO sought and received specific DOE authorization under Part 810 for KEPCO’s supply of APR1400 reactors to the UAE. “Although Poland does not require specific authorization under Part 810, Westinghouse—as the U.S. exporter and licensor of the Licensed Technology that would be retransferred to Poland as incorporated in APR1400—still must comply with Part 810 reporting requirements,” its complaint alleged.
But on Nov. 29, 2022, KEPCO and KHNP urged the court to dismiss the case, or as an alternative, compel arbitration—essentially requiring Westinghouse to participate in resolving the dispute. KEPCO in its response pointedly suggested that Westinghouse’s complaint was factually deficient—“the chief being that the planned technology transfer at issue does not incorporate Westinghouse’s licensed technology or any derivative thereof.”
However, Westinghouse’s bigger legal problem, it argued, is that “the very same 1997 License Agreement that gives Westinghouse the right to seek to compel Defendants’ compliance with the Part 810 regulations also requires that any disputes between the parties be submitted to binding arbitration in the Republic of Korea.” And, “through incorporation of the applicable International Arbitration Rules of the Korean Commercial Arbitration Board, Westinghouse and Defendants also agreed to delegate any question of arbitrability to the arbitrator.”
KEPCO and KHNP said that they filed a request for arbitration with the Korean Commercial Arbitration Board in October 2022. “Westinghouse has fully participated in the arbitration,” they noted.
On Sept. 18, U.S. District Court Judge Amit Mehta found for the South Korean companies and dismissed the case. In a nine-page memorandum opinion, Mehta ruled that Westinghouse lacked a “private cause of action to enforce Part 810” and therefore “failed to state a claim under the Declaratory Judgement Act.”
However, Westinghouse Energy Systems’ head Durham, on Sept. 19 told POWER that Westinghouse intends to appeal the decision given its larger implications for nuclear technology exports. “Westinghouse’s dispute with KEPCO/KHNP crosses multiple jurisdictions and covers two issues: compliance with U.S. nuclear technology export control requirements; and KEPCO/KHNP’s long-standing obligations to comply with Westinghouse’s intellectual property rights that they agreed to contractually,” Durham said.
“The use of Westinghouse intellectual property outside of Korea is the principal dispute between the parties,” he said. “The decision by the U.S. District Court merely holds that export control enforcement resides with the U.S. government.”
Durham also noted that the decision will have “no bearing” on the ongoing South Korean arbitration proceeding against KEPCO/KHNP “involving KEPCO/KHNP’s non-allowed transfer of Westinghouse’s intellectual property outside Korea.” Westinghouse continues to be “committed to protecting our intellectual property and we fully expect to be successful in the arbitration on all issues,” he noted. “The arbitration panel has confirmed that a final ruling is not expected until late 2025.”