The last one in Finland is almost a decade late, and the participating companies are now embroiled in multibillion-euro lawsuits. The current one in the UK has caused intense ructions at the top of one of Europe’s largest utilities and piled huge pressure on the French and British governments.
So it hardly seems like the most auspicious moment for Finland to build a nuclear power plant.
But Fennovoima, the company behind the project worth up to €7bn, is bullish. The 1,200 megawatt power plant — known as Hanhikivi 1 and due to be completed by 2024 — could provide Finland with about 10 per cent of its electricity, boost the country’s economic growth, and be a boon for a group of local companies as well as Russia’s Rosatom.
Fennovoima thinks it can avoid the problems that have dogged the Olkiluoto 3 nuclear project in Finland and Hinkley Point in the UK. Unlike the former, Rosatom is not just a supplier but also a big shareholder, with a 34 per cent stake in Fennovoima. And the cost of the proposed new Finnish reactor is well below the £18bn (€24bn) estimate for Hinkley Point, even if the UK plant is bigger, at 3,200MW.
“There are challenges. But we hope that we can show the way for others,” says Minttu Hietamäki, a nuclear engineer at Fennovoima, which hopes to secure a construction licence for Hanhikivi in 2018.
It comes at a critical time for Finland and the rest of Europe in the search for the right energy policy. Like most countries, Finland is looking to boost considerably its share of renewable energy — in its case, mostly from wood-based biomass — and wants nuclear power, not coal, to play the anchor role despite the Fukushima disaster in Japan in 2011. But the extraordinary problems at Olkiluoto have cast doubts over Finland’s ability to manage such projects, while Fennovoima was hit by a farcical hunt for European investors for Hanhikivi.
And all of that is not counting the furore surrounding the participation of Rosatom, the Russian state-controlled nuclear company. As well as providing the reactor and serving as the main shareholder in Fennovoima, Rosatom is also supplying all the finance and the atomic fuel.
Worries about Russian involvement almost brought down the previous Finnish coalition government. The Green party left the administration, accusing its former partners, some of whom are still in power, of pursuing a policy of “Finlandisation” — an extremely loaded term locally meaning the accommodation of Russian views in Finnish policy.
Toni Hemminki, Fennovoima’s chief executive, argues that the accusations of “Finlandisation” are nonsense because Rosatom provided the most attractive offer, not least because it will provide cheap financing. Unlike France’s Areva, which is struggling with its new European pressurised reactor technology at Olkiluoto and Flamanville in France, Rosatom has built more than 50 of its so-called water-water reactors. “It gives them credibility,” adds Mr Hemminki.
The deal is also of huge importance to Rosatom and its international ambitions to play a leading role in any revival of nuclear power outside the former Soviet Union. Finland is not just in the EU but it is also home to the “strictest regulator in the world”, says Roman Dyukarev, director of corporate communications for Rosatom Energy International, the company’s overseas business.
He argues that the risk — unlike in the other recent western European nuclear projects — is “minimal because we know what we are doing — we never stopped building nuclear power plants”.
He also claims that worrying about the geopolitics is pointless as Fennovoima is a “100-year project” — although as he notes, exactly 100 years ago Finland was part of Tsarist Russia.
Rosatom’s international business already has a $110bn order backlog relating to nuclear power, including more than 30 reactors. It is looking for growth in countries such as Jordan, Turkey, Egypt, Bangladesh and India.
If the Russian side of the project has been stable since Rosatom joined in 2013, the Finnish side has been anything but. A requirement that at least 60 per cent of Fennovoima’s shares be owned by EU companies reached a slapstick conclusion last year when Finland’s government rejected the participation of a mysterious Croatian company with alleged links to Moscow. “There was a lot of hassle. I’m not proud of it,” says Minna Forsström, the project director at Fennovoima.
The situation was rescued by the late participation of Fortum, Finland’s main utility. More than 20 Finnish companies — mostly local utilities but also steelmaker Rautaruukki — are shareholders. Under the Finnish model commonly used in building power plants, investors will each receive their own share of the electricity from Hanhikivi at cost — so, for instance, Rosatom will get 34 per cent of the power generated and is able to use it or sell it on.
Several challenges remain. Diplomatic relations with Russia remain tense, and could get more so if Finland decides to join Nato. However, Ms Forsström notes that Russia has always maintained its energy supply, including to Ukraine, even after Moscow’s annexation of Crimea in 2014.
She adds that having Rosatom as a shareholder as well as a supplier should help too. “It’s a kind of marriage. It’s hard to do the dirty laundry outside. It motivates the supplier too as there’s a common [financial] interest,” she adds.
Possible changes in safety requirements are the biggest potential problem, according to Ms Hietamäki. The reactor is designed to withstand a direct aircraft crash and still have its safety systems work, due to two separate one-metre thick concrete walls. But regulators are exacting with Fennovoima, holding about 30 meetings a month with the company.
More worrying to some Finnish shareholders is something entirely different: how subsidised renewable power is hurting the maths of the nuclear project. Standard & Poor’s last month downgraded the credit rating of TVO, the company behind Olkiluoto, as its cost of production is expected to be above future power prices. One Fennovoima shareholder says: “If this carries on, we’ll have done all this hard work for nothing. Making the sums on nuclear work right now isn’t the easiest thing.”
[–] RamblinRambo [S] ago