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Nuclear meltdown in Finland

By Joe Romm on February 2, 2009 at 4:41 pm

"Nuclear meltdown in Finland"

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This is the radioactivity-free kind of meltdown, as Helsingin Sanomat reported:

The Finnish nuclear power company Teollisuuden Voima (TVO) is seeking damages of EUR 2,400 million from the consortium of Areva and Siemens for delays in the construction of Finland’s fifth nuclear reactor in Olkiluoto.

Makes one look forward to what might happen if a truly litigous country had a major nuclear Renaissance fueled by, say, taxpayer money (see The nuclear bomb in the Senate stimulus plan).

The Finnish newspaper has a great photo of “The Olkiluoto III nuclear reactor construction site in December 2008.”

Here are more details on the meltdown between the partners in this debacle:

Areva and Siemens reported some time ago that the nuclear reactor project would be completed 38 months behind schedule, in 2012. According to the contract signed with TVO, the reactor was to have been ready for commissioning in 2009.

TVO signed an agreement for the third Olkiluoto plant in December 2003. The price of the reactor was in excess of EUR 3 billion, making it among Finland’s largest-ever individual industrial investments.

According to the Siemens statement: “Since the reasons for the delay are disputed by the parties, the supplier consortium filed a request for arbitration in December 2008 against TVO demanding an extension of time for construction and approximately EUR 1 billion for outstanding payments and additional compensation.”

“TVO has not yet filed its response to the request for arbitration, but has alleged in pre-arbitral correspondence that it is entitled to delay damages from the supplier consortium of approximately EUR 2.4 billion.”

The contract for the 1600 MW European Pressurized water Reactor (EPR) at Olkiluoto, the first of a new breed of nuclear plants, was made at a fixed price.

Areva and Siemens are building the facility as a turnkey project for TVO.

I think that last sentence may have a typo from a bad translation. The word “turnkey” seems to have an extra “n” (see “Turkey’s only bidder for first nuclear plant offers a price of 21 cents per kilowatt-hour“).

The Siemens share of the venture is 27%, and hence the company’s liability for the claim by TVO would be in the region of EUR 700 million, while Areva would be liable to pay EUR 1.7 billion.

Guess this will get settled in Really Large Claims Court. I can hardly wait for the inevitable string of such lawsuits in this country if we go down this path (see “Warning to taxpayers, investors — Part 2: Nukes may become troubled assets, ruin credit ratings“).

For more on the Finnish nuclear meltdown, see Satanic nukes? Finnish plant’s cost overruns to $6.66 billion and the Washington Monthly article Bad Reactors.

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14 Responses to Nuclear meltdown in Finland

  1. paulm says:

    Whats going to happen to the Nuclear plants on the coast as we face higher sea levels and storm surges (and more storms and more extreme heat waves).

    Has anyone gone back of the risk assessments that were done for these plants and recalculated them now with the new climate change effects?

    Scary!

  2. paulm says:

    Nuclear Melt Down in UK….will we have a major Nuclear indecent soon? Probably.

    We can’t check everything, admits atomic safety chief after 14-year leak
    • Campaigners furious that discharges stayed secret
    • Lawyers allege 11 breaches of radioactive disposal

    The most senior figure in nuclear safety has defended the regulation of an atomic power station barely 50 miles from the centre of London that leaked radioactive material for 14 years.

  3. Barry says:

    WHOOPS!

    Or as we in the pacific NW spell it: WPPSS.

    For those who don’t live here, we’ve been there and done that. Now we have laws to prevent nukes from returning to bankrupt us again.

    As a 2006 WaPo article summed up: “Whoops indeed. Construction of the five plants — only one of which ever produced electricity, none of which was then needed — led to what, at the time, was the country’s largest municipal bond default. Consumers across the Northwest are still paying for Whoops in their monthly electricity bills — a catastrophe that in one five-year stretch pushed up electricity rates by about 600 percent.”

    The one plant that was built cost $400m to build…was a disaster…then cost another $400m to decommission.

    Build them at your financial peril.

  4. jorleh says:

    Fine, my summer cottage is situated twenty miles away Olkiluoto at the Baltic Sea. This new unit 1600 MW is third on the place, the first two, 1000 MW each of them, were built over thirty years ago without any big problems.

  5. Kaj Luukko says:

    The final cost estimation for Olkiluoto III nuclear plant is 4,5 billion €,

    To “replace” the plant by wind power would cost about 8,7 billion €.

    So what is your point?

    You may try a Google-translation for this:
    http://planeetta.wordpress.com/2009/02/01/olkiluodon-tappiot-syy-luopua-uusista-reaktorihankkeista/

  6. Thanks for not publishing my comment. I guess this blog can’t admit it when it doesn’t know a word such as turnkey as well as allow a link that shows the number of lawsuits involved with wind farms. My comment wasn’t even insulting. I guess the truth hurts more…

    [JR: Do you really think I don't know the word "turnkey"? But rather than consider your comment too insulting to run, I realize it's to self defining not to run. I was making a friggin' joke, but you nuclear folks have no sense of humor, I guess.

    Yes, windfarms get lawsuits -- many of them funded by big energy. And yet we seem to be building vast amounts of wind power in this country and not bloody many nuclear plants.]

  7. I was making a friggin’ joke, but you nuclear folks have no sense of humor, I guess.

    When it comes to nuclear energy, all you ever do is complain and bash the technology, you never listen to any of our criticisms, and you repeat the same old junk time and time again. And you say we have no sense of humor with you?

    windfarms get lawsuits — many of them funded by big energy.

    “Big energy”? Like who? Do you have any evidence to back that up?

    And yet we seem to be building vast amounts of wind power in this country and not bloody many nuclear plants.

    How about you let us know when wind power in the U.S. actually generates one percent of the electricity in the country? Then I would say you could start bragging.

    There are no insults in this comment, it challenges your comment, and it’s on topic. Looks like it’s grounds for deletion on this blog … (there’s my sense of humor). :-)

  8. Barry says:

    Kaj,

    Even if your numbers are correct for wind cost, the “costs” of the nuke are far greater than the cost to just build it.

    You have to buy fuel, run it, decommission it and store the waste for thousands of years. You also have the billions in hidden subsidies that IEA nations dump into nuke research…government insurance coverage…and repository funding. Then there are other important costs like impacts on global warming, human health, energy security, water supply, space requirements, wildlife, water pollution, reliability and sustainability.

    If you want to talk costs of the two energy sources you should discuss total lifetime costs. Studies that i’ve seen that take this into account, show wind far less expensive in total costs than nukes.

    Here is a recent one: http://news-service.stanford.edu/news/2009/january7/power-010709.html

    Why choose nukes when better and cheaper overall options are available?

  9. paulm: Did you forget already or intentionally that coal contains uranium and that coal fired power plants put 100 to 400 times as much radiation out where it can get you as nuclear plants do? Did you forget already or intentionally that natural background radiation is 1000 times what you get from nuclear power? Did you forget already or intentionally that you get more radiation from dental and medical X-rays than you get from nuclear power plants? Did you forget already or intentionally that nuclear fuel is recyclable, so there is no reason for “all that” nuclear fuel to be wasted?

    Did you forget already or intentionally that nuclear power containment buildings are built like “furherbunkers”? Containment buildings are indestructible. Not even the ocean can hurt them.

  10. Finland could have installed 1600/27=59.3 or 60 Hyperion factory built nuclear power plants for 60 times $60 Million = $3600 Million = $3.6 Billion. There would have been zero problems because the on-site work is not beyond ordinary construction. I received the following from Hyperion sales:

    From: Jim Jones at hyperionpowergeneration.com
    To: Edward Greisch
    Date: Tuesday, February 3, 2009 2:27 PM
    Subject: Re: $.05 to .06 per KWh

    Assume HPM costs $30M and plant side doubles it:

    $60M divided by 25,000kw = $2,400/kw
    $2,400/kw divided by 5 years = $480/KWyr
    $480/KWyr divided by 8760 hours = $.0547945/KWhr (Call it 5 and half cents per KWhr)

    OR

    $60M divided by 20,000 homes = $3,000/home
    $3,000/home divided by 5 years = $600/home/year
    $600/home/year divided by 12 months = $50/home/month (How’s that for an electric bill?)

    Jim

  11. Barry: You don’t buy fuel every day for a nuclear power plant. The fuel is built in to the reactor and is part of the building cost. You remove and RECYCLE the fuel once every 10 years. Sensible people don’t throw perfectly recyclable fuel away. The USA has been forced by politics and coal company propaganda to waste almost all of the energy available in its supply of nuclear fuel. With recycling, the cost of nuclear fuel may as well be zero. The components of fuel that are removed during recycling are:
    1. Very small, like tens of pounds per year.
    2. Very valuable. They are the gamma ray sources that your doctor uses to cure you of cancer.

  12. Joe Romm: Every time you dis nuclear, you are working for the coal industry and shooting yourself in the foot. What the coal companies know that most people don’t:

    As long as you keep messing around with wind, solar, geothermal and wave power, the coal industry is safe. There is no way wind, solar, geothermal and wave power can replace coal, and they know it. Hydrogen fusion could, if it worked. Hydrogen fusion has been “hopeful” for half a century so far. I don’t expect that to change any time soon.

    If you quit being afraid of nuclear, the coal industry is doomed. Every time you argue in favor of wind, solar, geothermal and wave power, or against nuclear, King Coal is happy. ONLY nuclear power can put coal out of business. Nuclear power HAS put coal out of business in France. France uses 30 year old American technology. So here is the deal: Keep being afraid of all things nuclear and die either when [not if] civilization collapses or when H2S comes out of the ocean and Homo “Sapiens” goes extinct. OR: Get over your paranoia and kick the coal habit and live. Which do you choose? I put quotation marks around “Sapiens” because it is not clear that most of us have enough brains to avoid extinction when it is clearly predicted and the safe path has been pointed out. Nuclear is the safe path.

    PS: Nuclear is the cheapest and safest source of electricity. Nuclear life cycle CO2 output is the lowest per kilowatt hour because it takes a huge number of windmills or solar collectors or wave machines or whatever to produce the same power as a nuclear power plant. All of those windmills or whatever have manufacturing processes that make CO2. Hydro power requires an enormous amount of concrete. The first step in making concrete is heating limestone to drive off the CO2. That is one of the sources of CO2 from hydro power. The price for electricity for the various sources of power include the total life cycle costs. The cost to build the reactor is not much different from the cost to build a coal fired power plant and the money comes from the same source. See the next post of mine. Whoever would pay for the reactor is the same person who would pay for the coal burner. LOOK at the price for the electricity. It is the total life cycle cost. Nuclear is the cheapest and the only full time replacement for coal. Nuclear power would be much cheaper than it is if nuclear were allowed to be as unsafe as the other sources of power. Nuclear power plants are self-insured. Tax money is NOT involved and would not be mentioned if it were not for the civil disturbances caused by coal company shills, alias protesters. The nuclear industry needs and deserves protection from people who are obviously either mentally ill or very misinformed. When tax money is mentioned with respect to nuclear power, the money is the extra money that is wasted because of pointless protests.

    I DO NOT work for the Nuclear Regulatory Commission. I am a retired Department of the Army scientist and engineer. I have never worked for the nuclear power industry.

  13. crf says:

    It is amazing that Nuclear advocates dance around and around the maypole, oblivious to reality. Nuclear has a track record of high costs and delays in completing projects. It’s reality. Nuclear has complicated regulatory and staffing issues that automatically increase its costs compared to current ways of generating electricity. It’s reality. That the fraction of power delivered by Nuclear plants in this country is too low for some people’s liking isn’t because of a vast green conspiracy. Environmentalists have never set energy policy in this country, or any country, to an appreciable degree. Capitalists (rightly) and government policy have the most power. And the simple FACT is that it has been up to now cheaper and less risky and more cost-certain to build and run coal and gas plants, so that is what is built. It’s economics. There is real, well-functioning, fairly well regulated free market around coal and gas technology (apart from carbon taxes). Lots of companies, lots of innovation, lots of workers, technology transfer.

    Nuclear advocates ought to first complain about the lack of carbon taxes or the equivalent. If there were a real financial cost placed on the emitters of carbon dioxide, then nuclear plants would become more attractive for capitalists to invest in. Then we would see all the technologies, especially carbon-lessening tech, compete on a more level legal playing field for investment dollars.

    Nuclear advocates also ought to care more deeply about how nuclear industry is regulated worldwide, and how it is financed. There are many regulators, too many companies for such a small industry, excessive amounts of national pride damning productivity and efficiency concerns, and it all seems very inefficient to me. The cost of nuclear, the (necessarily) small number of companies, and the illiquid way information and capital flows about the nuclear industry makes it unattractive to capitalists without a government holding their hands to manage the risk (and there is nothing wrong with that, as it stands). This Finland plant is an example: either the companies or the government or both are going to burned. Someone is going up in smoke. Investors don’t like the risk of going up in smoke.

    Joe is not anti-nuclear. Read his posts: he believes nuclear power is important, will remain important, and, in the long term, will become much more important. What Joe Romm points out, to the consternation of some, is the reality of the nuclear industry today. Not unicorns. Just the reality. It isn’t close to being able to largely reduce carbon emissions in the near term for an acceptable price, when compared to other measures, especially, for example, new gas plants rather than new coal plants, efficiency, smart grids and increasing renewables.

    I am very pro-nuclear. And I disagree to some degree with Joe’s conclusions about the “self-limiting nature” of the industry. But I am very pro-reality. I think it could make a big difference in, for example, 20 years, if western governments (and perhaps russia and china) came up with a consistent way of developing, regulating and financing the industry. It has been mismanaged up ’til now, which explains its high costs and realitively low (compared to its promise) penetration into electricity markets.

  14. Eino Hinsala says:

    So the Finnish reactor will be done late and cost more than expected.

    Sounds like it will still run clean and reliably like other reactors when done. It will not pollute the air when completed.

    The power is still needed and it will pay for itself.

    It will last a long time, use little fuel and if built right need little fixing.

    A few years after it’s running, the cost overruns will be forgotten.