Polish firms set to secure a larger share of nuclear construction as time runs out for Czech suppliers

Polish Prime Minister Donald Tusk is demanding that supplies from Polish companies for the construction of a nuclear power plant in Poland reach around $14 billion. Poland’s first nuclear units are expected to cost approximately $49 billion. Put simply, Polish firms are therefore expected to account for just under 30% of the construction. The share of domestic companies in nuclear power plant construction is also a key issue in the Czech Republic, where an EPC contract with KHNP is due to be signed in the coming weeks. 

Poland, like the Czech Republic, is at the stage of preparing the construction of new nuclear units. While Poland’s first reactor is to be built by US company Westinghouse, Czech utility ČEZ has selected South Korean company KHNP.

In both countries, the involvement of domestic companies in the construction of nuclear units is an important issue. Donald Tusk is now seeking to support Poland’s nuclear industry and, in connection with the current geopolitical situation, is calling for greater support for domestic companies.

In this context, the Polish prime minister also addressed the construction of Poland’s first nuclear power plant. At a business conference, he said that supplies from domestic industry should reach approximately $14 billion. At an estimated cost of $49 billion, this represents a share of around 30%.

The Polish prime minister cited securing a 30% share for domestic suppliers as an example of a plan under which Poland is to “brutally protect” its interests and those of Polish companies.

Support for national interests forms part of a broader response to the policies and public statements of US President Donald Trump. The Polish prime minister himself described the current period as the end of “naive globalism”, which began with Donald Trump’s return to the presidency.

The project for Poland’s first nuclear power plant is necessarily dependent on technology from the United States. The contract was awarded to US company Westinghouse at the end of 2023.

The share of domestic supplies is also the main issue in the Czech Republic

In the Czech Republic, too, the share of domestic suppliers is the most widely discussed issue. While Industry Minister Lukáš Vlček insists that a 60% share can be achieved, reports from suppliers are not particularly encouraging.

Moreover, the signing of the contract between ČEZ and KHNP is approaching and should take place within the next few weeks, if not in the coming days. Time is therefore running out to negotiate binding contracts between Czech suppliers and KHNP.

Minister Vlček had previously demanded that, by the time the EPC contract is signed, domestic suppliers should already be contractually secured for 30% of the total value of supplies. After the EPC contract is signed, it will be more difficult to compel KHNP to involve Czech suppliers in the construction. If the EPC contract did not address the share of domestic companies at all, KHNP would probably not have to involve domestic suppliers.

"We have confirmed with our Korean partners in negotiations the target of 60% involvement of Czech industry in the construction, and I also put forward a requirement for a transparent definition of approximately 30% involvement of Czech industry at the signing of the EPC contract, including guarantees from the Korean side, for example in the form of agreements to conclude future contracts or other arrangements," said Minister of Industry and Trade Lukáš Vlček at the end of February.

It now appears, moreover, that even the Industry and Trade Minister’s 30% target will not be met. As KHNP Vice President for the Czech Republic Harry Chang said in an interview with E15, binding contracts with subcontractors will be signed only after the contract with ČEZ is signed.

Minister Lukáš Vlček’s latest statements also suggest that the key to achieving the desired share for Czech companies lies in what will be included in the total volume of supplies. According to the minister, the total volume of supplies must also include investments in “transport infrastructure, housing infrastructure, culture, sport, integrated rescue system capacity and medical care”. Supplies by domestic companies during the operation of the nuclear power plants must likewise be counted, the minister said in an Interview ČT24 programme.

However, it is at least doubtful that the Czech nuclear industry envisaged such a broadly defined involvement of industry in the construction of the units. According to a previously published document by the Czech Energy Alliance, Czech industry could account for up to half the value of supplies for the nuclear island, the main part of a nuclear power plant. So far, however, discussion has focused only on the supply of the turbine, or possibly the entire turbine island, to be supplied by Plzeň-based Doosan Škoda Power, which has South Korean owners.