Wednesday, May 29, 2024
HomeNuclearFinnish group drops nuclear power plant deal with Rosatom

Finnish group drops nuclear power plant deal with Rosatom

The Finnish-led consortium, Fennovoima abandoned a contract with Russian group Rosatom to build Finland’s third nuclear power plant citing risks related to the war in Ukraine.

“In recent years, significant supplier delays have continued and increased,” says the press statement of Fennovoima issued on Monday, underlining that the war in Ukraine has exacerbated the risks of the project. The termination of the supply contract took effect immediately.

“Unfortunately, the termination of the plant delivery is expected to have a significant impact on Fennovoima’s employees,” said Joachim Specht, CEO of Fennovoima adding that the impacts are also expected to affect all actors in the supply chain and the Pyhäjoki area.

Rosatom was apparently caught off-guard. The group said in a statement that the project had been progressing and they has scrupulously fulfilled all obligations, including preparing the key documents required by the regulator to issue a construction licence. Rosatom said it might take the matter to court.

The Hanhikivi 1 project was approved by the Finnish government in September 2014. Fennovoima, the license applicant and operator of the plant, is majority-owned by Voimaosakeyhtiö SF, a Finnish company with shareholders including major Finnish corporations and several local energy companies. Rosatom owns a 34 per cent stake in the Hanhikivi 1 project through its subsidiary RAOS Voima Oy, responsible for the design, construction, installation and commissioning of the power plant.

The proposed 7–7.5 billion euros project would have been constructed in the Hanhikivi peninsula in Pyhäjoki Northern Finland. Once operational, the 1,200-megawatt Russian-designed reactor was expected to produce approximately one-tenth of Finland’s electricity need.

The project had been delayed several times and the construction permit had not yet been granted. Earthworks started in the main pit in 2021 and would have continued during 2022 as part of preparations for the construction phase of the power plant, which was expected to begin in the summer of 2023. Electricity production was expected to start in 2029.

Following Russia’s military intervention in Ukraine, Finland’s Minister for Economic Affairs Mika Lintila told the parliament that he would not be granting a building permit for the Hanhikivi plant as things stand.

In March, Fennovoima said that although the nuclear sector has not been included in the sanction packages yet, discussions are ongoing and the current decided sanctions are expected to impact the Hanhikivi 1 project.

The project, which employed 450 people, had been one of the major industrial projects involving Russian-supplied VVER-1200 reactors in the European Union besides the Paks II power plant project in Hungary.

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