The European Commission has confirmed its approval of a large state aid package to support the construction of Poland’s first nuclear reactor. The project, based on Westinghouse’s AP1000 technology, is expected to cost a total of EUR42bn ($47bn), according to Polish authorities. The public support will include an equity injection of about EUR14bn, state guarantees covering 100% of the debt incurred, and a two-way contract for difference (CfD) providing revenue stability over a 40-year period.
A major nuclear project under EU scrutiny
The agreement was formalised in May 2023 between Westinghouse, construction group Bechtel, and the public operator Polskie Elektrownie Jądrowe (PEJ), which is fully owned by the Polish State Treasury. A decision-in-principle from the Polish Ministry of Climate and Environment was issued in July 2024. The first reactor, located at the Lubiatowo-Kopalino site in northern Poland, is scheduled to begin commercial operations in 2033.
The Commission launched a formal investigation in December 2024 to assess whether the measures complied with EU state aid rules. Following its review, Brussels concluded that the support plan met requirements for necessity, proportionality and non-distortion of market competition. Poland agreed to several modifications, including reducing the CfD duration from 60 to 40 years and adopting a strike price based on a discounted cash flow model.
Strict conditions on transparency and market independence
As part of Poland’s commitments, at least 70% of the plant’s annual electricity output will be sold on organised power markets — including day-ahead, intraday and futures segments — throughout the lifetime of the plant. The remainder may be sold via auctions conducted under objective, transparent, and non-discriminatory rules.
Additionally, PEJ will be required to remain legally and functionally independent from other major electricity market players in Poland. This condition aims to reduce market concentration risks and prevent public aid from being passed on to final consumers.
Towards signing the construction contract
With the European Commission’s approval, the project is moving into a new phase. The government now plans to transfer the required state budget funds to PEJ to proceed according to schedule. The final construction contract between PEJ and the American consortium is expected to be signed soon.
