Vattenfall takes minority stake in Fermi Energia

01 June 2021

Swedish state-owned energy company Vattenfall has signed an agreement with the Estonian nuclear energy start-up company Fermi Energia in order to become a minority shareholder of the company with a seed investment of EUR1 million (USD1.2 million). Fermi Energia is studying the deployment of small modular reactors (SMRs) in Estonia.

Kalev Kallemets (left), CEO of Fermi Energia, and Torbjörn Wahlborg, head of the Generation business area at Vattenfall, after the signing of the agreement in Stockholm that makes Vattenfall a minority owner of Fermi Energia (Image: Fermi Energia)

In November 2020, Vattenfall and Fermi Energia signed a Letter of Intent to further expand their cooperation on small modular reactors (SMRs). Vattenfall - which operates seven reactors in Sweden and three in Germany - had previously participated in a feasibility study by Fermi Energia to explore the possibilities for the deployment of such reactors in Estonia.

Vattenfall said it has now "accepted the opportunity to become a minority shareholder of approximately 6% ownership".

Under the agreement of that Letter of Intent, Vattenfall is studying the potential for the deployment of SMRs in Estonia, especially addressing costing and constructability aspects, supply chain, operations/personnel/maintenance, and new-build financing structure.

"With this minority investment, Vattenfall can contribute our know-how and work jointly on feasibility studies about costing, supply chain and capabilities to construct and operate SMR technology," said Torbjörn Wahlborg, Senior Vice President Generation at Vattenfall. "Innovative and fossil free future nuclear generation such as SMRs seems very promising for Estonia, which has the highest average CO2 emissions per generated kWh of electricity among all EU member states."

He added: "With an investment, Vattenfall will further broaden and strengthen the relationship with Fermi Energia. Vattenfall sees potential in Fermi Energia's business model and the company's prospects to succeed with its 2026 objective to submit an application for a Decision in Principle for the deployment of SMR technology in Estonia."

The extended collaboration will further explore the maturity of SMR technology and the prospects for deployment of one or several such reactors in Estonia until 2035. In addition to Vattenfall, the initiative involves other European energy companies, including Finnish power company Fortum and Belgian engineering firm Tractebel. "All participants gain practical SMR technology insights and contribute their own experience," Fermi Energia said.

"Fermi Energia considers true decarbonisation of the economy impossible without reliable, affordable low-carbon power supply from nuclear energy," said Fermi Energia CEO Kalev Kallemets. "For Estonia, only SMRs as currently developed in the US, Canada and UK are suitable. The excellent safety record of multiple nuclear power plants by Vattenfall and its mission of 'fossil free living within one generation' proves that Vattenfall is the right partner for us to move forward with SMR deployment.

"Thanks to Vattenfall's investment, we can increase the team and develop competencies, continue to inform the public in the field of nuclear energy, conduct training programmes and research to support the Estonian government in reaching a knowledge-based decision to introduce nuclear energy. In the coming years, together with Vattenfall, we will organise several studies on the use of SMRs, visits to stations and training courses, which will benefit both Estonia and Sweden."

Fermi Energia was founded by Estonian energy and nuclear energy professionals to develop deployment of SMRs in Estonia. In July 2019, the company launched a feasibility study on the suitability of SMRs for Estonia's electricity supply and climate goals beyond 2030, following a financing round from investors and shareholders. It selected four SMR designs to be included in the feasibility study: Moltex Energy SSR-W300, Terrestrial Energy IMSR-400, GE Hitachi BWRX-300 and NuScale SMR.

In April this year, the Estonian government formally approved the formation of a nuclear energy working group (NEPIO) tasked with analysing the possibility of introducing nuclear energy in Estonia. Headed by Environment Minister Tõnis Mölder, the NEPIO will present its conclusions and proposals to the government by September 2022 at the latest.

Researched and written by World Nuclear News