Fennovoima ends Hanhikivi 1 licensing process

24 May 2022

Fennovoima has withdrawn its construction licence application for the planned Hanhikivi 1 nuclear power plant project at Pyhäjoki in northern Finland. The move follows the company's termination of the plant's engineering, procurement and construction (EPC) contract with Russia's RAOS Project earlier this month.

The Hanhikivi 1 construction site (Image: TEM)

Fennovoima signed the plant supply contract for Hanhikivi with Rusatom Overseas - Rosatom's nuclear power plant exports subsidiary - in December 2013. Rosatom offered to build a plant using a 1200 MWe AES-2006 VVER under a fixed-price contract. The Hanhikivi project is owned by Fennovoima, majority owned (66%) by Voimaosakeyhtiö SF, a Finnish company with shareholders including major Finnish corporations and several local energy companies. The remaining 34% is held by RAOS Voima Oy, the Finnish subsidiary set up in 2014 by Rosatom for the purpose of buying a share in the company.

Fennovoima submitted its construction licence application to Finland's Ministry of Economic Affairs and Employment (TEM) for the Hanhikivi plant in June 2015, with updated versions submitted in August 2015 and April 2021. In January this year, Fennovoima said that licensing work had progressed "to the homestretch", with the final licensing materials expected to be submitted to the nuclear regulator over the next couple of months.

However, on 2 May Fennovoima announced its decision to terminate the EPC contract "due to RAOS Project's significant delays and inability to deliver the project. There have been significant and growing delays during the last years. The war in Ukraine has worsened the risks for the project. RAOS has been unable to mitigate any of the risks."

Fennovoima has now informed TEM cancelled that it has cancelled its application to construct the Hanhikivi 1 plant. The ministry said the government may issue a formal decision in the coming weeks to end the administrative measures for processing the application.

"Works at the Pyhäjoki site related to the EPC contract have stopped, and Fennovoima is now focusing on maintaining safety and security in the short and long term," the company said. "Some works within the Fennovoima's scope will be completed during the upcoming weeks.

"As announced previously, Fennovoima expects significant impact from the EPC contract termination decision and has therefore kicked-off change negotiation for all its employees that are expected to last until 21 June 2022."

On 6 May, RAOS Project said it has "no other choice but to defend ourselves and demand compensation" for the "unlawful termination" of the Hanhikivi I project. It added that it is ready to discuss "possible options for the project to recommence when conditions permit".

Researched and written by World Nuclear News