28.01.2009 Lauri Myllyvirta

The Finnish buyer of Olkiluoto 3 power plant, TVO, is asking for EUR2.4 bln as a reimbursement for the 38 month delay of Olkiluoto 3 reactor. Areva-Siemens is claiming one billion from TVO. The claims from TVO come on top of cost overruns that Areva and Siemens have already incurred, amounting roughly to 1.5 bln.

Whatever happens in the arbitration process, it is clear that at least one side will suffer enormous losses in the Olkiluoto 3 project. In future nuclear projects, reactor vendors will not provide utilities with the kind of protection from cost overruns that was included in the Olkiluoto plant contract and that is going to scare away a lot of potential investors.

Reliance on the risky nuclear adventure of TVO will cost Finnish electricity consumers three billion euros, or EUR600 per person, and they have no one to claim damages from. Had the nuclear project been abandoned, there would have been plenty of time to construct a corresponding amount of renewable generation capacity. Unlike the nuclear industry, the renewable energy industry has a track record of delivering plants in time and within budget.