Released September 09, 2009 | GALWAY, IRELAND
en
Researched by Industrial Info Resources (Sugar Land, Texas)--French company Areva SA (EPA:CEI) (Paris, France) has told the Finnish nuclear power company Teollisuuden Voima Oy (TVO) (Eurajoki) that it will complete construction of the Olkiluoto 3 nuclear power plant only after TVO issues contracts for requested modifications and has agreed to proposals that have been made.
Areva claims that the modifications and proposals were necessary because of TVO's failure to follow standard industry practices involving the management of the project. However, TVO claims that Areva has not informed the firm of the threatened stoppage of work and has not presented any conditions for continuation of construction work on the project.
According to Areva, work on the reactor is more than 80% complete, with initial preparations under way for the placement of the reactor dome. Civil work on the main buildings is approaching 73% completion.
The Olkiluoto 3 power plant has been plagued by problems since the first license application was made in 2000. At that that time, the plant was scheduled to be commissioned in May 2009, a date later moved to summer 2011 and then postponed again to June 2012. Construction of the 1,720-megawatt European Pressurized Water Reactor (EPR) was initially set to be completed by Areva NP, a joint venture of Areva and Siemens AG (NYSE:SI) (Munich, Germany).
However, in January Siemens pulled out of the agreement, forcing Areva to make a payment of $2.85 billion to Siemens under a previous arrangement, adding to the financial woes of Areva over the project. Onsite, Areva faced construction problems such as waterlogged concrete, flaws in pipes, and faulty welds. The Finnish Radiation and Nuclear Safety Authority is also reportedly unhappy with some aspects pertaining to the design of the plant's control systems.
The initial contract to build the nuclear power plant was worth $4.27 billion and awarded to the Areva-Siemens consortium in 2003. However, the series of problems and disagreements have forced Areva to make several financial provisions to meet increasing costs, and the company now expects to incur a loss of $4.3 billion from the project.
In addition to the financial rewards that Areva expected to make from the project, the contract was important to the firm's plans of developing commercial reactor technology and developing an increasing share of the global nuclear market. Areva is attempting to become the leader in the design of nuclear reactors for the next generation of power plants, and the contract for the Olkiluoto 3 reactor represented the first order placed for a nuclear reactor in Western Europe since the Chernobyl disaster in 1986.
Areva is also involved in the construction of an EPR-based nuclear power plant in Flamanville, France, for Électricité de France SA (EPA:EDF) (EDF) (Paris, France). Construction work for this plant began in 2006, with the first concrete pouring taking place in December 2007. Areva reports that work is 65% complete at this facility. However, with the delays at the Olkiluoto plant causing concerns and the French Autorité de Sûreté Nucléaire calling a halt to concrete pouring last summer because of "insufficient project administration," EDF was forced to issue a statement in June to confirm that the project was on time and budget.
In November 2007, Areva signed a contract for a further two EPR reactors, this time in China for China Guangdong Nuclear Power Group (Shenzhen, China) for the Taishin 1 and 2 units. Areva reports that these projects are 30% complete, with preparations under way for the first concrete pouring.
View Project Report - 079900041 079900041 088001068
Industrial Info Resources (IIR) is the leading provider of global market intelligence specializing in the industrial process, heavy manufacturing and energy related markets. For more than 26 years, Industrial Info has provided plant and project opportunity databases, market forecasts, high resolution maps, and daily industry news.
Areva claims that the modifications and proposals were necessary because of TVO's failure to follow standard industry practices involving the management of the project. However, TVO claims that Areva has not informed the firm of the threatened stoppage of work and has not presented any conditions for continuation of construction work on the project.
According to Areva, work on the reactor is more than 80% complete, with initial preparations under way for the placement of the reactor dome. Civil work on the main buildings is approaching 73% completion.
The Olkiluoto 3 power plant has been plagued by problems since the first license application was made in 2000. At that that time, the plant was scheduled to be commissioned in May 2009, a date later moved to summer 2011 and then postponed again to June 2012. Construction of the 1,720-megawatt European Pressurized Water Reactor (EPR) was initially set to be completed by Areva NP, a joint venture of Areva and Siemens AG (NYSE:SI) (Munich, Germany).
However, in January Siemens pulled out of the agreement, forcing Areva to make a payment of $2.85 billion to Siemens under a previous arrangement, adding to the financial woes of Areva over the project. Onsite, Areva faced construction problems such as waterlogged concrete, flaws in pipes, and faulty welds. The Finnish Radiation and Nuclear Safety Authority is also reportedly unhappy with some aspects pertaining to the design of the plant's control systems.
The initial contract to build the nuclear power plant was worth $4.27 billion and awarded to the Areva-Siemens consortium in 2003. However, the series of problems and disagreements have forced Areva to make several financial provisions to meet increasing costs, and the company now expects to incur a loss of $4.3 billion from the project.
In addition to the financial rewards that Areva expected to make from the project, the contract was important to the firm's plans of developing commercial reactor technology and developing an increasing share of the global nuclear market. Areva is attempting to become the leader in the design of nuclear reactors for the next generation of power plants, and the contract for the Olkiluoto 3 reactor represented the first order placed for a nuclear reactor in Western Europe since the Chernobyl disaster in 1986.
Areva is also involved in the construction of an EPR-based nuclear power plant in Flamanville, France, for Électricité de France SA (EPA:EDF) (EDF) (Paris, France). Construction work for this plant began in 2006, with the first concrete pouring taking place in December 2007. Areva reports that work is 65% complete at this facility. However, with the delays at the Olkiluoto plant causing concerns and the French Autorité de Sûreté Nucléaire calling a halt to concrete pouring last summer because of "insufficient project administration," EDF was forced to issue a statement in June to confirm that the project was on time and budget.
In November 2007, Areva signed a contract for a further two EPR reactors, this time in China for China Guangdong Nuclear Power Group (Shenzhen, China) for the Taishin 1 and 2 units. Areva reports that these projects are 30% complete, with preparations under way for the first concrete pouring.
View Project Report - 079900041 079900041 088001068
Industrial Info Resources (IIR) is the leading provider of global market intelligence specializing in the industrial process, heavy manufacturing and energy related markets. For more than 26 years, Industrial Info has provided plant and project opportunity databases, market forecasts, high resolution maps, and daily industry news.
