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Nuclear Reactors 427 - Problems With The European Pressurized Reactor Being Constructed At Olkiluoto Finland

       The Olkiluoto Nuclear Power Plant is located on the southwest coast of Finland. It has two operational boiling water reactors that each generate eight hundred and sixty megawatts of electricity. A third reactor is under construction at Olkiluoto. This reactor is based on the European Pressurized Reactor (EPR) design. Areva, the French nuclear reactor construction company is building the EPR at Olkiluoto. The Olkiluoto EPR is one of the first two such reactors to be constructed. The other is being constructed in Flamanville, France. Both have encountered serious problems with cost and construction schedules.

       Construction of the Olkiluoto EPR began in 2005. It was supposed to be completed by 2009 but is now slated to be operational by 2018. The original estimated cost was about four billion dollars but now the cost is estimated to be over eight billion dollars. When completed it will supply sixteen hundred megawatts of power. The project was undertaken for the Finnish utility Teollisuuden Voima Oyj (TVO) by Areva NP which was a joint subsidiary of the German company Siemens and the French company Areva. Siemens stopped working on nuclear projects in 2011.

       TVO and Areva are locked in a bitter arbitration dispute over who will pay for the cost overruns. Areva is asking for three billion six hundred thousand dollars and TVO is asking for two billion seven hundred and sixty million dollars.

       Yesterday, the giant French utility EDF and Areva announced that they had signed binding agreements for EDF to buy the reactor construction business from Areva. Areva's reactor business has had serious financial problems recently. The agreed upon price is two billion seven hundred thousand dollars. EDF intends to create a new company called New NP to continue the reactor construction business that it is buying from Areva. It has been reported that New NP will not be responsible for any financial liabilities connected to the EPR reactor being constructed at Olkiluoto.

       TVO expressed "alarm" over the sale of the Areva reactor business to EDF. The senior vice president of TVO sent out an email that said, "TVO is alarmed about the evolution of the restructuring of the French nuclear industry, and considers that the separation of project ownership from the resources needed for the completion and commissioning of OL3 (reactor) is not appropriate behavior from a nuclear technology vendor."

       TVO is afraid that if technical experts and other resources are transferred from Areva to the New NP company, Areva will not have adequate expertise and funds to complete the Olkiluoto EPR project. In September, TVO took the matter to a French commercial court. They are asking for guarantees that the EPR project at Olkiluoto will not be delayed yet again. Areva promised that the project would be completed on the new schedule and said that tests of equipment at Olkiluoto would begin in 2017.

       In addition to all the problems mentioned above, there is now additional concern about the French decision to shut down twenty nuclear power plants in France because of the discovery of substandard components which were supplied by a French foundry and a Japanese nuclear supplier. Investigation of components supplied to the Olkiluoto EPR project could result in more delays and cost overruns.

Olkiluoto Nuclear Power Plant (Hannu Huovila/ TVO)

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