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Olkiluoto nuclear plant – a shining example of folly of nuclear costs

ENERGY: Nuclear Does Not Make Economic Sense Say Studies Australia.to 14 February 2010   by Julio Godoy
“…….Actually, there is a new nuclear power plant that serves as a warning example of the risks involved in such a project: the nuclear power plant of Olkiluoto 3 in Finland, under construction since 2004.

Although the plant was supposed to have started delivering electricity in May 2009, its completion was postponed several times in the past two years. On Feb. 11, the 3 project manager Jouni Silvennoinen announced in Helsinki that the plant’s start ”may be pushed back further than June 2012, which is the current deadline confirmed by the equipment manufacturer.”

The manufacturer is the French state-owned company AREVA. The plant was ordered by the Finnish company TVO.Olkiluoto 3 is also facing an explosion of construction costs. Initially, it was estimated that the plant’s construction would cost three billion euros (4.1) û but now the bills amount to well over 5.3 billion euros (7.2 billion dollars). How much the plant is actually going to cost remains unclear.These costs must be added to the revenues losses TVO had budgeted as electricity sales, but which were never realised due to the non operation of the plant…..

The Citibank paper, referring to the Olkiluoto 3 plant, points out that cost overruns and time slippages of even a fraction seen by TVO and AREVA would be more than enough to destroy the equity value of a developer’s investment ”unless these costs can be passed through somehow”, an euphemism for state subsidies.

”Given the scale of these costs, a construction programme that goes badly wrong could seriously damage the finances of even the largest utility companies,” the Citibank survey says.

The Citibank survey concludes that without taxpayers money there is ”little if any prospect that new nuclear stations will be built à by the private sector unless developers can lay off substantial elements of the three major risks. Financing guarantees, minimum power prices, and/or government-backed power off-take agreements may all be needed if stations are to be built.”

ENERGY: Nuclear Does Not Make Economic Sense Say Studies

February 15, 2010 - Posted by Christina Macpherson | business and costs, Finland | antinuclear, AREVA, nuclear, nuclear costs, nuclear spin