Hanhikivi agreements

23 December 2013

Fennovoima has firmed up its selection of Rosatom to supply a nuclear power plant at the new Hanhikivi site, but a final investment decision remains to be made.

A round of agreements was announced on 21 December as the result of exclusive negotiations between Fennovoima and Rosatom that began in July. The Russian supplier said the deals "define areas of cooperation... the terms of liability and the ratio of shares in the project." Another agreement between Fennovoima and TVEL covers the nuclear fuel required by the plant.

On offer is a single-unit nuclear power plant using a Gidropress-designed AES-2006 VVER pressurized water reactor. It would produce 1200 MWe at Hanhikivi near the municipality of Pyhajoki on Finland's west coast.

Rosatom will take a stake of 34%, the major share previously held by Germany's EOn, and will support the project by arranging debt finance for the plant's construction. Rosatom has not announced what it would do with its share of electricity the plant will produce.

In November, 46 of Fennovoima's 60 shareholders agreed to continue with the project. They will each take power from the plant at cost price in proportion to their ownership. Fennovoima explained this non-profit business model and confidently stated the cost of power for its shareholders would be "less than €50 ($68.50) per MWh" when it starts operation in 2024.

Fennovoima said it would take the final investment decision in February 2014. It already has the government decision-in-principle it needs to start construction, but did not say when construction might actually start. The stated operation date of 2024 indicates a few years' wait.

Hanhikivi would be sixth nuclear reactor generating power in Finland and, along with Olkiluoto 3, could take nuclear to a share of power generation of around 50%. A further reactor is proposed at Okliluoto that could push the share higher still.

Researched and written
by World Nuclear News

Filed under: New build, Contracts, Russia, Finland