Released April 06, 2009 | GALWAY, IRELAND
en
Researched by Industrial Info Resources (Sugar Land, Texas)--Timo Rajala, CEO of Finnish energy company Pohjolan Voima Oyj (Helsinki), is of the opinion that the government should grant building permits to all three companies that have submitted applications to set up the next nuclear power plant in Finland.
Among the three firms seeking permits are two power companies: Teollisuuden Voima Oyj (TVO) (Helsinki) and Fortum Oyj (HEL:FUM1V) (Espoo, Finland). The third is a consortium known as Fennovoima Oy (Helsinki), which includes energy utilities Rauman Energia Oy (Rauma, Finland) and Katterno Group (Jakobstad, Finland), stainless steel producer Outokumpu Oyj (HEL:OUT1V) (Espoo, Finland), mining and smelting company Boliden AB (STO:BOL) (Stockholm, Sweden), and electricity supplier E.ON Suomi (Helsinki, Finland), a subsidiary of E.ON AG (OTC:EONGY) (Dusseldorf, Germany).
Rajala believes that since each company's ability and readiness to start work will differ, granting the permits will not mean that all three projects will be under development simultaneously. He is confident that "natural selection" will decide which projects are likely to take off. The CEO of Fortum, Mikael Lilius, shares a similar opinion. He too has suggested that all three applicants should be granted construction permits. He remarked that since there are three willing nuclear power developers, the government should take advantage of the fact and welcome the investment.
TVO already operates the Olkiluoto nuclear power plant, located on Olkiluoto Island. It includes two boiling water reactors of 860 megawatts (MW) each, while the third unit with the country's first evolutionary power reactor is still under construction. TVO is currently seeking permission to set up a fourth reactor on Olkiluoto.
Fortum owns and operates Finland's first nuclear power plant at Loviisa. It consists of two VVER-440 pressurized water reactors of 510 MW each. Fortum has submitted an application to the Finnish government seeking permission to set up a third unit at Loviisa. The capacity of the proposed unit would be 1,000-1,800 MW and would be set up by 2020. The plant would have a service life of at least 60 years and would cost between $5 billion and $8 billion. The plant would generate both heat and power. In April 2008, Fortum submitted an environmental impact assessment report to Finland's Ministry of Employment and Economy.
Fennovoima's lack of existing infrastructure and experience in the nuclear power sector puts it at a slight disadvantage. The consortium has indicated interest in setting up a nuclear power plant at one of three possible locations.
All three companies now await the decision of the government, which intends to issue a decision-in-principle to only one project. A decision-in-principle is issued when the proposal satisfies the government that the project will benefit Finnish society. The proposal is then forwarded to the parliament for approval.
If TVO's proposal is approved, the company is likely to select a Finnish company as the engineering, procurement, and construction (EPC) contractor instead of once again selecting French company Areva SA (EPA:CEI) (Paris). Development of TVO's third reactor at Olkiluoto was meant to showcase Areva's new European pressurized reactor technology and to represent the resurgence of nuclear power after the Chernobyl disaster of 1986. However, Areva will not be able to complete the 1,600-MW plant in early 2009 as promised and has announced 2012 as the new deadline for the project. Areva and Siemens Power Generation (Munich, Germany), a subsidiary of Siemens AG (NYSE:SI) (Munich), had signed the contract with TVO for the turnkey project. Areva was designated as the leader of the consortium and is supplying the first fuel core, a digital control system, the nuclear island, civil works and balance of plant. Siemens is supplying the turbine generator set and will also build the turbine island.
The project has experienced huge cost overruns. Costs have now been estimated to reach $6 billion, 50% more than the original estimate. Olkiluoto 3 has thus become a showcase for the delays, cost overruns and other hassles that critics believe afflict every nuclear power project. The chances of Areva getting involved in financial conflicts with TVO are very high. Keeping this experience in mind, the chances of TVO hiring Areva as the EPC contractor for Olkiluoto 4, if the project is approved, are rather low. TVO may purchase the reactor and other equipment from Areva, but the association between the two companies for the project is likely to end there.
View Project File - 79900019 79900041 79900076 79900079 79900080 79900081 79900082
Industrial Info Resources (IIR) is a marketing information service specializing in industrial process, energy and financial related markets with products and services ranging from industry news, analytics, forecasting, plant and project databases, as well as multimedia services.
Among the three firms seeking permits are two power companies: Teollisuuden Voima Oyj (TVO) (Helsinki) and Fortum Oyj (HEL:FUM1V) (Espoo, Finland). The third is a consortium known as Fennovoima Oy (Helsinki), which includes energy utilities Rauman Energia Oy (Rauma, Finland) and Katterno Group (Jakobstad, Finland), stainless steel producer Outokumpu Oyj (HEL:OUT1V) (Espoo, Finland), mining and smelting company Boliden AB (STO:BOL) (Stockholm, Sweden), and electricity supplier E.ON Suomi (Helsinki, Finland), a subsidiary of E.ON AG (OTC:EONGY) (Dusseldorf, Germany).
Rajala believes that since each company's ability and readiness to start work will differ, granting the permits will not mean that all three projects will be under development simultaneously. He is confident that "natural selection" will decide which projects are likely to take off. The CEO of Fortum, Mikael Lilius, shares a similar opinion. He too has suggested that all three applicants should be granted construction permits. He remarked that since there are three willing nuclear power developers, the government should take advantage of the fact and welcome the investment.
TVO already operates the Olkiluoto nuclear power plant, located on Olkiluoto Island. It includes two boiling water reactors of 860 megawatts (MW) each, while the third unit with the country's first evolutionary power reactor is still under construction. TVO is currently seeking permission to set up a fourth reactor on Olkiluoto.
Fortum owns and operates Finland's first nuclear power plant at Loviisa. It consists of two VVER-440 pressurized water reactors of 510 MW each. Fortum has submitted an application to the Finnish government seeking permission to set up a third unit at Loviisa. The capacity of the proposed unit would be 1,000-1,800 MW and would be set up by 2020. The plant would have a service life of at least 60 years and would cost between $5 billion and $8 billion. The plant would generate both heat and power. In April 2008, Fortum submitted an environmental impact assessment report to Finland's Ministry of Employment and Economy.
Fennovoima's lack of existing infrastructure and experience in the nuclear power sector puts it at a slight disadvantage. The consortium has indicated interest in setting up a nuclear power plant at one of three possible locations.
All three companies now await the decision of the government, which intends to issue a decision-in-principle to only one project. A decision-in-principle is issued when the proposal satisfies the government that the project will benefit Finnish society. The proposal is then forwarded to the parliament for approval.
If TVO's proposal is approved, the company is likely to select a Finnish company as the engineering, procurement, and construction (EPC) contractor instead of once again selecting French company Areva SA (EPA:CEI) (Paris). Development of TVO's third reactor at Olkiluoto was meant to showcase Areva's new European pressurized reactor technology and to represent the resurgence of nuclear power after the Chernobyl disaster of 1986. However, Areva will not be able to complete the 1,600-MW plant in early 2009 as promised and has announced 2012 as the new deadline for the project. Areva and Siemens Power Generation (Munich, Germany), a subsidiary of Siemens AG (NYSE:SI) (Munich), had signed the contract with TVO for the turnkey project. Areva was designated as the leader of the consortium and is supplying the first fuel core, a digital control system, the nuclear island, civil works and balance of plant. Siemens is supplying the turbine generator set and will also build the turbine island.
The project has experienced huge cost overruns. Costs have now been estimated to reach $6 billion, 50% more than the original estimate. Olkiluoto 3 has thus become a showcase for the delays, cost overruns and other hassles that critics believe afflict every nuclear power project. The chances of Areva getting involved in financial conflicts with TVO are very high. Keeping this experience in mind, the chances of TVO hiring Areva as the EPC contractor for Olkiluoto 4, if the project is approved, are rather low. TVO may purchase the reactor and other equipment from Areva, but the association between the two companies for the project is likely to end there.
View Project File - 79900019 79900041 79900076 79900079 79900080 79900081 79900082
Industrial Info Resources (IIR) is a marketing information service specializing in industrial process, energy and financial related markets with products and services ranging from industry news, analytics, forecasting, plant and project databases, as well as multimedia services.
