(Updates with comments CEO starting from second paragraph.)
Nov. 25 (Bloomberg) -- PGE SA, Poland’s largest power utility, is looking at the Baltic Sea coast to build a nuclear plant to take advantage of ample cooling-water supplies and to boost power production in the region.
PGE shortlisted the northern Polish towns of Choczewo, Gaski and Zarnowiec as sites for a 3,000-megawatt plant, Chief Executive Officer Tomasz Zadroga told reporters in Warsaw today.
Poland, which relies on coal for 90 percent of its power production, is building the plant to cut carbon-dioxide emissions as utilities look to options including gas-fired power plants and renewable energy sources before they start paying for CO2 permits after 2012.
The region has a “deficit of installed capacity and it has favorable cooling conditions” because using sea water to cool reactors is cheaper than lake water, said Zadroga.
PGE, which plans to build the first unit in 2020, will pick the final location and select the technology in 2013. It will announce the public tender for the supplier next month, Zadroga said.
The company has already signed agreements with GE-Hitachi Nuclear Energy Ltd., Westinghouse Electric Co. LLC and France’s Areva SA to study their solutions.
The Warsaw-based utility plans to have a minimum 51 percent stake in the project and may invite one or more partners to take over the remaining shares, the CEO said. He declined to say whether the partners could be KGHM Polska Miedz SA, Poland’s biggest energy consumer, or Polish power distributors such as Tauron Polska Energia SA or Enea SA.
State-controlled PGE, which on its website estimates the cost of the plant at as much as 55 billion zloty ($16 billion), won’t seek funding from the government, Zadroga told reporters today. State guarantees, although they cut the cost of financing, “aren’t crucial,” he said.
“Our rating is only one notch below the country so the difference in the cost of funding isn’t big,” the CEO said. PGE is rated at A3 by Moody’s Investors Service, compared with Poland’s A2 rating.
KPMG was picked as financial adviser to help PGE choose the funding structure, Marzena Piszczek, the chief financial officer of PGE’s nuclear unit, said at the conference.
--Editors: James M. Gomez, Douglas Lytle
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