Professor: No power but heavy losses from Olkiluoto 3
Construction delays at the Olkiluoto 3 reactor will probably lead to losses of 1.5 billion euros for Finnish power company Teollisuuden Voima (TVO). This is based on calculations by an energy economy expert at the Lappeenranta University of Technology.
A shortfall in electricity sales caused by the delay is primarily to blame.
The third reactor at Finland’s Olkiluoto nuclear power plant should have been on stream by 2009. Now the latest start-up date is given as 2015, following a long list of construction setbacks. The plant is being built as a turn-key project by French manufacturer Areva. Its German partner Siemens pulled out of the project when problems began to mount up.
Olkiluoto 3 was purchased with a so-called lump sum, so a six-year delay in start up means extra expenditure for TVO. The reactor is not yet generating electricity but costs keep on rolling. TVO is owned by majority-state-owned utility Fortum and Pohjolan Voima, a consortium of Finnish forestry and energy firms.
”Teollisuuden Voima faces the same problems as any house builder. If the house is not ready, money still has to be repaid to the bank. Around 200 to 300 million euros annually have to be paid in addition to interest,” calculates Professor Esa Vakkilainen at the Faculty of Technology at the Lappeenranta University of Technology.
A six-year delay means a loss to TVO in the region of 1.2 to 1.8 billion euros, an issue the company refuses to discuss. Both sides are currently engaged in an arbitration battle for costs.
Cost price for electricity rising
According to Vakkilainen’s sums, every unproduced megawatt hour costs TVO around 19 euros.
The cost price of electricity generated by the new plant will be around 40 euros – that is twice as much as the company’s current price.
In any case, Vakkilainen believes Olkiluoto will be able to generate cheap power for its customers as the market price could eventually top 60 euros.
Longer repayment time
TVO estimates Olkiluoto 3 will have an operating life of 60 years. Construction costs were estimated at three billion euros when the license to build was acquired. At that time, repayment time was put at 12 years. This calculation is no longer valid, according to Vakkilainen.
“We are talking about even an additional five years in repayment time,” he says.
TVO could recoup its losses if it were to win the current international arbitration battle with manufacturer Areva. However, a decision is not expected for some years. Areva is demanding 1.9 billion euros from TVO while TVO wants 1.4 billion euros in compensation from Areva.
Meanwhile the promise of cheap nuclear power remains elusive. Earlier this month TVO announced a loss of 11 million euros for the first half of this year. This is a five-fold increase over last year. TVO said the loss is primarily due to its nuclear power sector.
Latest in: News
April unemployment at 8.8%
The unemployment rate in Finland declined slightly in April to 8.8%, down from March, but still higher than a year previously.
Company exploiting foreign workers up for Helsinki contract
Work-safety inspections this year at about 20 small and medium-sized cleaning companies that employ immigrant workers have discovered problems at every firm checked. Yle has found that the City of Helsinki is considering contracting services from a company that was determined to have employment rules violations.
Spanish nurses leaving Vaasa
Five of eight Spanish nurses recruited to work in Vaasa's city hospital have decided to quit the jobs they took up in October and leave the country. The reasons they cite include the high cost of living, the cold climate, and the difficulty of the Finnish language.
Toxic spill in Helsinki's Mätäjoki River
A chemical discharge into Helsinki's Mätäjoki River has killed fish and possibly wiped out years of efforts to revive spawning grounds for endangered species.
Sikh bus driver fights for right to wear turban
Managing diversity in Finnish workplaces is raising new issues for employers, unions and workers themselves. One Sikh bus driver in Vantaa is currently fighting to set a precedent allowing him to wear a turban.
Veolia drivers to return to work
Bus drivers working for the Veolia company will return to work on Tuesday, bringing their week-long work stoppage to an end.
Finnish traffic cops set to miss out on Gumball speeding fine jackpot
Several contestants in the Gumball rally were stopped for speeding on Monday, on the Turku-Helsinki leg of their unorthodox race. Police say that despite their concerns, the drivers are likely to escape Finland’s hefty income-based fines.
Yle News building its freelance database
Yle News is building up a database of freelance journalists for occasional work in radio, television and online news production.
Jolla to sell new phone this year
A mobile firm founded by former Nokia employees is set to put a new smartphone on sale by the end of the year. The company, Jolla, was set up to continue working on an open source Linux-based smartphone when Nokia announced it was switching to the Windows Phone operating system.
Decline in church membership will cost jobs
In order to cope with decreasing membership, the Evangelical Lutheran Church will be forced to reduce its staff significantly in coming years. Many congregations are facing dire financial circumstances due to the reduction in the tax revenue that flows as a result of membership.
