EOn withdraws from Fennovoima

24 October 2012

Germany's EOn is to sell its 34% stake in the Fennovoima new build project as part of a move to divest its businesses in Finland and refocus its Nordic operations on Sweden and Denmark.

Fennovoima was established in 2006 as a project company primarily owned by industrial power consumers and resellers, in line with the 'Finnish model' for financing nuclear power plant projects. While EOn Kärnkraft Finland has a major stake of 34%, the rest is held by Voimaosakeyhtiö SF which counts 67 organizations as its shareholders.

Following a strategic review, EOn has now said that it will sell its stake.

EOn Sverige CEO Jonas Abrahamsson said, "EOn has decided to focus its resources, capabilities and investments in the Nordic region on existing operations in mainly Sweden and Denmark. We are therefore initiating the process of divesting our businesses and assets in Finland."

As well as its stake in Fennovoima, EOn's Finnish operations include power distribution company EOn Kainnu Oy, natural gas supplier Karhu Voima Oy and electricity company EOn Suomi Oy. It also has a 20% stake in gas supplier Gasum Oy.

Abrahamsson added, "I realize the special importance of the Fennovoima project to Finland, and we will support the other shareholder, Voimaosakeyhtiö SF, in finding a way forward for the project." He noted, "We will now focus on continuing our ambitious investment program in Sweden including renewable generation and smart grids, as well as concluding our remaining large modernization and safety upgrade project at the Oskarshamn 2 nuclear power plant."

Since its founding, Fennovoima has selected the Hanhikivi peninsula in the Pyhäjoki municipality on Finland's western coast as the site of a new nuclear power plant, a decision-in-principle for which was granted by the government in 2010. Earlier this year, Areva submitted a bid for the construction of an EPR reactor there, while Toshiba put in a bid for an ABWR plant. Operation of the Hanhikivi 1 plant (or FH1 for short) is pencilled in to begin around 2020.

EOn's decision to withdraw from the Fennovoima project follows its recent decision to drop nuclear new build plans in the UK. In March, both EOn and RWE announced that, as the result of separate strategic reviews, they had decided not to continue with their Horizon Nuclear Power joint venture. Horizon had been planning to build up to 6600 MWe of new nuclear capacity at Wylfa and Oldbury.

The decision to sell their respective stakes in Horizon was prompted not by any lack of faith in the UK new build program but from changes in both EOn and RWE's strategic directions against a background of financial constraints in their home markets. As well as the global financial crisis, both companies' 2011 financial results were hit by Germany's abrupt change in nuclear policy following the Fukushima accident which forced the immediate closure of some German plants and reduced the operating lives of the remainder.

Researched and written
by World Nuclear News