R 081520Z DEC 09
FM AMEMBASSY HELSINKI
TO SECSTATE WASHDC 5315

UNCLAS HELSINKI 000464 
 
 
E.O. 12958: N/A 
TAGS: TRGY ENRG FI
SUBJECT: MORE DELAYS FOR FINLAND'S NEW NUCLEAR REACTOR 
 
REF: HELSINKI 450 
 
 ¶1. SUMMARY: As the Government of Finland (GOF) deals with 
repeated delays in the construction of the fifth nuclear 
power plant, it also debates the future of nuclear power in 
Finland.  The completion of Finland's fifth nuclear reactor 
has been delayed to Summer or Autumn 2012.  Ministry of 
Employment and Economy (TEM) officials blame for the delay 
reactor supplier Areva's late submissions of appropriate 
documentation and insufficient welding techniques; those 
delays have reportedly resulted in cost overruns doubling the 
costs from EUR3 billion to EUR5.3 billion.  Despite these 
construction problems, both the GOF and public opinion 
towards new nuclear plants remains steady.  Nuclear energy 
remains an important source of carbon-free baseload energy, 
and the TEM will likely approve at least one of the three 
applications pending for Finland's sixth nuclear reactor. 
Parliament, as well, looks poised to approve at least one new 
reactor despite divisions among coalition members.  As 
Finland struggles to meet its ambitious emission targets, 
nuclear energy will remain an increasingly attractive option. 
 END SUMMARY. 
 
FINLAND'S FIFTH NUCLEAR REACTOR SUFFERS REPEATED PROBLEMS 
--------------------------------------------- ------------ 
 
¶2. The completion of Finland's fifth nuclear reactor, 
Olikiluoto 3 (OLK 3), has been delayed once again due to 
Finnish Nuclear Regulatory Agency's (STUK) fresh concerns 
over insufficient welding techniques by Areva - the French 
company supplying the reactor - and an overall back-up in the 
work schedule from prior delays.   Areva's revised start-up 
date for the new nuclear plant is Summer 2012, almost 3 years 
beyond the original 2009 date.  In a meeting with Econoff, 
TEM Deputy Director General for the Energy Department, Riku 
Huttunen, was more pessimistic, not expecting the plant to 
come on-line until Autumn 2012. 
 
¶3.  Huttunen emphasized that ongoing construction delays have 
more to due with Areva's late submission of planning 
documents to appropriate Finnish authorities, than with any 
serious flaw in the European Pressurized Reactor (EPR) model. 
  He downplayed press reports about tensions between Areva 
and Finnish utility Teollisuuden Voima Oy (TVO), noting that 
construction continues while the companies work out their 
differences.  Huttunen added that the GOF believes Areva is 
unfairly shifting the blame to Finland.  Finland went public 
with these concerns on November 2 when Finnish, UK and French 
regulators issued a joint statement questioning Areva's EPR 
control and instrumentation. 
 
 
¶4. Delays have nearly doubled OLK 3's costs from EUR3 billion 
to an estimated EUR5.3 billion, and TVO and Areva (along with 
Areva's German partner Siemens) are in continued arbitration 
over who pays for the cost overruns. Areva originally claimed 
TVO was responsible for EUR1 billion in additional costs. On 
April 2009, TVO filed a counterclaim via the International 
Chamber of Commerce for EUR1.4 billion. 
 
SUPPORT FOR NEW REACTORS REMAINS SIGNIFICANT 
-------------------------------------------- 
 
¶5. Despite the delays, Huttunen insists that both GOF and 
public opinion regarding nuclear reactor construction in 
general has not changed. A October Gallup poll showed 31% of 
Finns favor new nuclear reactors, down slightly from 38% in 
September.  Huttunen pointed out that local officials, with 
the backing of their constituents, still lobby to bring 
nuclear reactor construction - and the subsequent employment 
and revenue - to their municipalities. 
 
¶6. Problems with OLK3 have not scuttled proposed plans for 
construction of a sixth reactor: TVO and Finnish companies 
Fennovoima and Fortum all have construction applications 
pending with TEM.  Media reports state that within the next 
several months TEM Minister Mauri Pekkarinen likely will 
grant a Decision-in-Principle to at least one of the 
companies.   On November 25, Prime Minister Vanhanen publicly 
stated that while his government might approve one additional 
plant, it would not approve three. 
 
PARLIAMENT DIVIDED OVER NUMBER OF NEW REACTORS 
--------------------------------------------- - 
 
¶7. Parliament, as well, looks poised to approve at least one 
new reactor despite divisions within the governing four-party 
coalition.  The Centre party wants to approve only one 
application, while the National Coalition Party (NCP) 
supports granting all three.  According to NCP leader and 
Finance Minister Jyrki Katainen, two of the new reactors 
would replace two of Fortum's existing plants, producing in 
principle only one additional reactor in Finland.  The Green 
Party has opposed any increase in nuclear energy production, 
but also has stated it would not break with the coalition 
government over nuclear issues, as they have done in the 
 
past. 
 
¶8. One nuclear issue on which Parliament appears unified is 
the continued ban on exporting excess nuclear-generated 
electricity to its neighbors.  Huttunen confirmed that there 
is little GOF support for producing excess nuclear energy and 
subsequent waste for the benefit of its neighbors, most 
notably Russia (even though the Nordic electricity market 
already allows this in practice at limited levels). 
 
"NUCLEAR OPTIONS" CONSIDERED IN CLIMATE PLANS 
--------------------------------------------- 
 
¶9. On November 20, the Government unveiled its long-term 
climate and energy policy report, which it plans to present 
at the Copenhagen Climate Summit (REFTEL). The report 
examines four possible paths Finland could take to achieve an 
80 percent reduction in emissions by 2050. The pathways take 
into account factors such as economic growth, transportation 
needs, energy consumption and use of nuclear power.  The 
different scenarios range from the Eco-Efficiency model in 
which Finland uses 100 percent renewable energy to the 
Industrial Society model which relies heavily on nuclear 
energy (envisioning a tripling of Finland's capacity).  The 
GOF hopes the report will generate discussion on how Finland 
should prepare for climate challenges, as well as create the 
policy conditions necessary to encourage clean technology 
investments.  The government solicited public input regarding 
the pathways, and asserts that the preferred option was one 
of the middle-of-the-road paths that foresees nuclear power 
increasing slightly to one-fifth of Finland's production. 
 
¶10. COMMENT: The GOF's current climate strategy - drafted 
before the current recession hit - foresees a significant 
reduction in GDP as Finland acts to meet its EU-mandated 
emissions targets.  GOF officials expect that clean tech and 
renewable energy both will lift Finland out of the recession 
and help it meet its emissions targets.  Maintaining status 
quo on nuclear energy (roughly one-fifth of energy 
production) could prove difficult, e.g., given that the 
recession has hit the paper industry hard and consequently 
sharply reduced Finland's biomass supplies.  As Finland looks 
to 2020 and beyond to 2050, among the main political parties 
there is a broad consensus to act ambitiously.  Where the 
consensus might breakdown, particularly during the upcoming 
parliamentary election campaign, is what energy configuration 
will best meet those goals. END COMMENT. 
ORECK