Gas, CO2 price surge makes nuclear attractive, says PGE CEO

Smoke and steam billow from Belchatow Power Station, Europe's largest coal-fired power plant, operated by PGE Group, at night near Belchatow, Poland December 5, 2018. REUTERS/Kacper Pempel//File Photo

WARSAW, Nov 23 (Reuters) - This year's price surge on the gas and carbon markets makes nuclear power projects attractive and could alter plans to invest in new gas generation, the chief executive of Poland's biggest utility PGE (PGE.WA) said on Wednesday.

To phase out coal and lower its carbon emissions, Poland plans to build nuclear plants, which demand much greater upfront investments than fossil fuel generation.

"The price of gas has increased by five times and CO2 three times and this changes the economics of projects and the thinking about nuclear energy. The parameters of investments in nuclear are approaching those of gas," Wojciech Dabrowski told a news conference.

Private companies, including PGE and another Polish utility ZE PAK (ZEEP.WA), in October signed a letter of intent with Korea Hydro & Nuclear Power (KHNP) to assess the viability of building four 1,400-megawatt nuclear reactors.

Dabrowski said that pursuing a nuclear project would require changes to the company's strategy that could affect current plans to invest in gas-fired power plants.

He also said that PGE was analysing the impact on its investment capacity of the government's plan to curb energy prices.

The government wants state-controlled energy companies to have minimal profits in 2023 and to shoulder the burden of keeping household bills low. It plans to introduce a cap on the margins of power utilities.

European Union energy ministers meanwhile have been arguing over EU-wide plans for a gas price cap they will debate on Thursday to try to soften the burden of prices , which reached a peak in August and have since retreated, on households and business.

Reporting by Marek Strzelecki, writing by Alan Charlish and Anna Koper, Editing by Louise Heavens and Barbara Lewis

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