Fortum enters nuclear energy race

Helsinki Energy offered partnership in district heating

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Fortum, an energy company half-owned by the state, submitted an application to the government on Thursday for the construction of a new nuclear reactor. Fortum would like to build its new facility on the island of Hästholmen in Loviisa on Finland’s south coast, which is the location of two of Finland’s existing four commercial reactors.
     Fortum wants to build Finland’s sixth reactor. Applications for a new one have also been submitted by TVO (which is building Finland’s fifth reactor on the west coast, in Olkiluoto, where the other two existing reactors are located) and by Fennovoima, which is offering three possible locations for a reactor: Simo, Pyhjäjoki, and Ruotsinpyhtää.
     
Political debate on a sixth reactor is expected to start in earnest in the coming autumn. The government hopes to bring the matter before Parliament early next year, so that the matter might be dealt with in good time before Parliamentary elections in 2011.
     Minister of Economic Affairs Mauri Pekkarinen (Centre Party) said on Thursday that the government will make a proposal to Parliament on the nuclear applications in December this year at the earliest, and in mid-February next year at the latest.
     
Fortum delayed submitting its application as long as it could. Its position in the upcoming competition is not considered to be very strong, as it already controls a large proportion of Finland’s nuclear generating capacity. In addition to the two units in Loviisa, it has a 25 per cent stake in the two existing reactors in Olkiluoto, owned by TVO, as well as the third Olikiluoto reactor, which is now being built.
     Newcomer Fennovoima is seen to be in a fairly strong position, as it would bring nuclear capacity to the metal and steel industry - to companies such as Outokumpu and Rautaruukki, which are not shareholders of TVO.
     
When the third unit at Olkiluoto is completed, Fortum will own 43 per cent of Finnish nuclear generating capacity, and the forest industry company UPM will have a 23 per cent share.
     Two other paper manufacturers, Stora Enso and M-real, own a total of 11 per cent. Helsinki Energy will own about ten per cent of Finland’s nuclear electricity when Olkiluoto 3 is finished.
     
Fortum CEO Mikael Lilius emphasised on Thursday that in addition to electricity, the Loviisa 3 reactor could also provide district heating for the Helsinki region. Water heated by the reactor is currently pumped unutilised into the sea.
     Lilius says that this would lead to a six per cent cut in Finland’s carbon emissions, by eliminating the use of coal and natural gas in electricity and district heat production in the Helsinki region.
     The amount of heat involved is so big that the whole Helsinki metropolitan area should be brought into the system.
     Lilius offered Helsinki Energy and other players cooperation in such a project.
     
Piped heat to Helsinki is not likely to be a very serious trump card in the competition, as Helsinki Energy is not very interested in it.
     The utility’s CEO Seppo Ruhonen said last year that a district heat pipeline from Loviisa, branching out to different parts of the Helsinki region, would be very expensive. He feels that a more cost-effective system for the environment would be an increased use of biomass as fuel.

More on this subject:
 NEWS ANALYSIS: Fortum rides high on windfall profits from emissions trade

Previously in HS International Edition:
  Pekkarinen´s comments on nuclear power take ministry and Fennovoima by surprise (25.4.2008)
  Fortum holding back nuclear application (15.1.2009)
  Technology industry wants two more nuclear reactors (24.4.2008)

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