Impact of Hanhikivi 1 licensing delay remains unclear

17 October 2017

Although the delay in receiving the construction licence for the Hanhikivi 1 nuclear power plant will not affect the cost of the project, its impact on the commissioning schedule will become clearer later this year, Fennovoima CEO Toni Hemminki told journalists last week. The company began excavation work at the site in Pyhäjoki in northern Finland in January last year.

Hanhikivi 1 site - panoramic - 460 (WP)
Ground works under way at the Hanhikivi 1 site (Image: WNN)

Fennovoima submitted its 250-page construction licence application to Finland's Ministry of Employment and the Economy for the planned Hanhikivi 1 project in June 2015. The application sets out details of the plant location, the reactor type, the main safety systems, nuclear waste management, financing of the project and Fennovoima's organisation, the company said.

Last month, Fennovoima said it now expects to receive the construction licence for its planned Hanhikivi 1 plant in 2019, instead of the previously scheduled 2018. The review of documentation related to its application is taking longer than originally envisaged, the company said.

Speaking at Fennovoima's headquarters in Helsinki on 10 October, Hemminki said the licence delay will not affect the cost of the project as the plant is being constructed by Russia's Rosatom under a fixed-price contract signed in December 2013. The company still expects the plant to start up in 2024, he said, adding it will be able to comment further once discussions with the supplier have been completed later this year.

Jorma Aurela, chief engineer at the energy department at the Ministry of Employment & the Economy, said the same day there had been "some fluctuation" with the construction licence schedule. "We now expect that first Fennovoima's supplier - Rosatom - will have a unanimous opinion of what the schedule will be. Then they will deliver it to Stuk [the Finnish Radiation and Nuclear Safety Authority] and they will then tell us when they think they will have their statement and their safety review," he said. "It will not be many weeks after this that we can go to the government and present the construction licence [application]." This is expected to be in 2019, he noted.

The Hanhikivi 1 project is expected to cost €6.7 billion, with about one-quarter of this provided by equity contributions from the project shareholders. The remainder will be provided through debt financing, of which half was agreed with Rosatom in 2015. The other half is under negotiation and will mainly be covered by Export Credit Agency guarantee financing instruments.

Hemminki said the project will have a significant impact on the national economy. Citing a research paper from Finland's Technical Research Centre, he said the plant, once in operation, will increase the gross national product by over 0.25%. The impact on the Finnish economy will be €500 million annually, while the municipality of Pyhäjoki - where the plant is located - will receive some €4.2 million per year in real estate taxes.

Minna Forsström, Fennovoima's director of the Hanhikivi 1 project, said that during 2017 and 2018, the company will focus on the review and delivery of construction licence documentation. The Russian partners in the project have played a big role in producing the construction licence application documents, which Fennovoima then reviews and delivers to Stuk. Stuk then reviews them, making comments and additional requirements before approving them. Stuk will submit a safety assessment for the project to the Ministry of Economics, which will consider this together with statements from various stakeholders, authorities and the public. It will then propose approval of the construction licence to the government, which will then grant the licence.

Fennovoima will also start the production of long-lead items for the plant and the development of the supply chain, Forsström said. However, she noted that Fennovoima has no target for localisation from the Finnish supply chain. Meanwhile, preparatory works at the construction site will continue.

Progress at construction site

Fennovoima began excavation work at the Hanhikivi site in Pyhäjoki, which is in northern Finland, in January last year and aims to complete infrastructure work by the end of this year. More than 118,000 cubic meters of topsoil have been removed from the site so far. Plant excavation is currently at -2 meters and will eventually be -7 to -16 meters. Construction of the plant - based on a Russian-designed 1200 MWe AES-2006 VVER - can only start once the construction licence has been issued.

Hanhikivi site works - October 2017 - 460
Excavation works for the plant's reactor building (Image: WNN)

Jouni Sipiläinen, Fennovoima's construction director, said there will be €400-500 million of investments at the site before plant construction actually begins. Speaking to journalists at the construction site on 10 October, Sipiläinen said the company had already completed the 4 kilometer long Hanhikiventie Road, which links the plant construction site to the main road running through the area. Construction of the training building and security gate building has also been completed. The first few of 21 two-story accommodation buildings have also been built, as have two concrete mixing plants.

Work on an administration building, costing over €10 million, is also under way. Once completed in early 2020, Fennovoima will move its headquarters from Helsinki to the Hanhikivi 1 site.

Although just one reactor is planned for the Hanhikivi 1 plant, an area of land has been reserved for a second unit, should the company decide to expand it.

Fennovoima owns the Hanhikivi project, in which a 34% stake is held by RAOS Voima Oy, the Finnish subsidiary set up in 2014 by Russian state nuclear corporation Rosatom for the purpose of buying a share in the company. Russia's Titan-2 is the main contractor for the project. In line with its shareholding in Fennovoima, Rosatom will receive one-third of the electricity production of Hanhikivi 1 at cost price (€50 per MWh).

Finnish energy scene

Nuclear's share of Finnish electricity production is expected to increase from its current 30% to 36%-37% when the Olkiluoto 3 EPR starts up in 2019, said Liisa Heikinheimo, deputy director general of the energy department at the Ministry of Employment & the Economy. When the Hanhikivi 1 plant is commissioned, this will increase to 40%-45%, depending on whether the two VVER-440 units at Loviisa are permitted to operate beyond 2027 and 2030, respectively.

Chief engineer Aurela noted that Finnish energy demand has declined from around 90 TWh to 80 TWh over the past decade. Meanwhile, electricity imports have increased due to delays in bringing Olkiluoto 3 on line. Imports are expected to continue rising as the country shuts down coal-fired plants in line with its plan to end coal use by 2020. Hydro power is expected to continue providing 10-15% of Finland's electricity.

Researched and written
by World Nuclear News