OSGE applies for the first Contract for Difference for small modular reactors in the EU

Orlen Synthos Green Energy (OSGE) has requested the Minister of Energy of Poland to initiate work on a support scheme for the construction of a fleet of GE Vernova Hitachi BWRX-300 small modular reactors. The company applies for a Contract for Difference for 14 units across three locations.

OSGE’s application is a key step in developing a support scheme for 14 SMR units in three locations developed by OSGE in Poland: Włocławek, Stawy Monowskie near Oświęcim, and Stalowa Wola. Based on OSGE’s submission, the government will prepare documentation for the European Commission’s notification.

The units listed in the application are the first phase of a broader OSGE program, which ultimately includes the construction of 26 BWRX-300 units in line with the principal decisions obtained by the company from the Polish government.

“The Contract for Difference for 14 units will enable us to build a fleet of BWRX-300 reactors in Poland. Thanks to economies of scale, standardization and modularization, we will reduce unit cost and, as a result, create a cost-attractive electricity generation model for both individual and industrial customers,” said Rafał Kasprów, CEO of OSGE. “At the same time, the approval of the Contract for Difference will be a significant step toward building a robust SMR supply chain in Poland,” he added.

OSGE has obtained decisions in principle for all locations indicated in the application. For two projects – Włocławek and Stawy Monowskie – the General Director for Environmental Protection (GDOŚ) has already issued decisions defining the scope of the environmental impact assessment report, while for Stalowa Wola project the relevant application has been submitted. OSGE has also obtained grid connection conditions issued by Polskie Sieci Elektroenergetyczne S.A. for the Stawy Monowskie site.

According to OSGE’s assumptions, the first BWRX-300 unit will be commissioned in 2032 in Włocławek. The capacity of SMR designed by GE Vernova Hitachi and locations selected by OSGE fit well into the Polish power system, minimizing the costs associated with grid connection.

The fact that CfD is currently a natural instrument of support for SMR projects was recently highlighted by the Government Plenipotentiary for Strategic Energy Infrastructure, Wojciech Wrochna, during the presentation of the updated Polish Nuclear Power Programme (PPEJ).

“I think that a Contract for Difference is nowadays a requirement,” said Wojciech Wrochna when asked about state’s support for SMRs. “The National Energy and Climate Plan clearly indicates the development of a support model for small-scale nuclear projects as one of its measures. Based on this, a dedicated support model for SMRs will be prepared, and the SMR roadmap will define available support mechanisms. We know what is available, as the EU state aid rules or EU regulations determine what is possible: namely a Contract for Difference and potentially state guarantees,” the government plenipotentiary added during a press conference on 12 June.

OSGE’s application includes a detailed justification and calculations developed in cooperation with partners experienced in similar applications notified to the European Commission. For nearly 12-month work involving entities such as KPMG’s experts from the United Kingdom and the Czech Republic (engaged, among others, in preparing notification documentation for the Dukovany II NPP project in the Czech Republic) and ETARA (the Swedish government’s advisors on support instruments for development of new nuclear projects), comprehensive documentation necessary for a successful notification process at the European Commission was developed. Following the submission, the company expects active cooperation with the government and a swift start of dialogue.

“The recent example of Polskie Elektrownie Jądrowe has shown that a Contract for Difference for a nuclear project can be notified by the European Commission very efficiently. In that process the fact that the application was prepared very professionally by the Polish government and approved by the Commission without the need for modifications has been equally important. We are confident that our case will be similar, especially given the growing support and positive attitude toward SMR projects in Brussels”, said Bartosz Fijałkowski, Vice President of the Management Board of OSGE.

A Contract for Difference (CfD) is a support mechanism in which two parties settle the difference between a predetermined strike price and the current market price of a given asset – in case of energy, the price of electricity. When market prices are below the reference price, the positive difference is paid to the producer. If market prices exceed the reference price, the difference is paid to the supporting party. In the energy sector, a CfD acts as a price stabilization mechanism.

About Orlen Synthos Green Energy
ORLEN Synthos Green Energy (OSGE) was established by SGE S.A. and ORLEN S.A. The company plays a leading role in the deployment of modular nuclear reactors in Poland, aiming to contribute to the effective decarbonisation of the power generation, heating and industrial sectors. OSGE’s mission is to build a fleet of BWRX-300 reactors designed by GE Vernova Hitachi Nuclear Energy, which will become an important part of the country’s energy mix, providing households and industry with stable zero-carbon electricity. OSGE’s project in Poland is part of a broader European fleet deployment led by SGE. For more information, visit X (Twitter) platform @ORLEN_Synthos and LinkedIn.

For more information, contact:

Mariusz Ilnicki
+48 668 48 36 73 
mariusz.ilnicki@osge.com