The end of Fennovoima NPP project?

As predicted earlier this year, the Fennovoima project might end due to economic reasons.

Since this, several small shareholders have left the project, but the last nail in the coffin was an announcement from E.On to leave it as well. There are now about 40% shares for sale, but no buyer in sight. More shareholders are leaving, so all signs show this is the end of the project to build a 7th reactor in Finland.

It looks like the Fennovoima nuclear power company is in a deep trouble. The biggest shareholder, E.On announced in October they will leave the project. With 34% share, this leaves too big hole to fill by the Finnish shareholders.

A few weeks earlier they have fired two key persons in their organization: The chain of events which led to this, started very soon after Fennovoima announced they selected Pyhäjoki as the location where to build the plant. First shareholders to leave were Jyväskylä and Åland utilities, earlier this spring.

6 more shareholders left the Fennovoima-project in September 2012 and two have diminished their share of the project. This represents 10% loss of capital from the Finnish side. Fennovoima announced it was not able to sell the shares of those companies, so their names are still visible on the Fennovoima website. At that point E.On did not confirm whether to leave or continue in the project.

Fennovoima received offers from Toshiba and Areva earlier this year. The price was not announced, not even to the shareholders. Preliminary price (5 years earlier) was to be 4-5 billion Euros. The current knowledge of nuclear reactor prices varies between 7.2 to 9 billion Euros. According to an old Citigroup analysis, the economy says "no" to nuclear power.

In Kemi, the city council started a process to pull the city owned power company out of Fennovoima. The company bought shares without asking the owner, now as Fennovoima wants more money for planning and later for construction, the city budget does not allow this amount to be spent in the project. Another process was completed recently in Kemi, to prevent this kind of risk investments without permission. It's likely this initiative will go through, said a member of the Kemi city council. And if yes, then a small group of investors, mainly small power companies in the north, called "pohjois-Suomen Voima Oy" will collapse. In Kuopio, a similar political process to leave Fennovoima, was initiated earlier in summer 2012.

Fennovoima is still not legally qualified to construct the plant, as the preliminary permission is not valid if the company has no plan for nuclear waste repository. So far, there is no room for Fennovoima's waste in the Onkalo repository in Olkiluoto.

Earlier in October 2012 there were speculations the state-owned Fortum Oy might buy out the remaining shares and move the project to Loviisa. Pyhäjoki is not technically suitable site for a big nuclear plant.

Matti Adolfsen, Kemi, Finland