Escalating a dispute between the companies as to who is to blame for the schedule slippage, Areva said Monday it will not proceed with work on the delayed Olkiluoto nuclear reactor project in Finland until Finnish utility TVO makes unspecified changes to the project.
Areva, the French government-owned nuclear giant, made that disclosure in a financial statement for the first half of 2009.
The financial risks of nuclear power were cast into sharp relief on Monday as Areva, the French state-owned group, revealed new provisions on its troubled Finnish reactor project that virtually wiped out interim operating profits.
The ongoing saga between Areva and Finland is now more like an episode of Desperate Housewives than a sitcom, however. Or maybe Law and Order: Nuclear Intent.
Last September, I reported that “Finnish plant’s cost overruns to $6.66 billion.” Then in February we had a radioactivity-free kind of meltdown:
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.
Areva made clear in May it wasn’t going to keep swallowing the price escalation risk — see “Areva has acknowledged that the cost of a new reactor today would be as much as 6 billion euros, or $8 billion, double the price offered to the Finns.”
And things got so bad for the French nuclear giant that for Canada, “Areva’s bid came in at $23.6 billion, with two 1,600-megawatt reactors costing $7.8 billion and the rest of the plant costing $15.8 billion. It works out to $7,375 per kilowatt,” but even that bid — not the highest! — was “deemed non-compliant, however, likely because Areva wouldn’t guarantee the price” (see Nuclear Bombshell: $26 Billion cost “” $10,800 per kilowatt! “” killed Ontario nuclear bid).
Here’s more from the Energy Daily story:
Areva also revealed that it is setting aside $788 million in additional funds to cover recently incurred and potential future losses at Olkiluoto…..
Delays at Olkiluoto have been unfortunate for the nuclear industry as a whole, which has watched the Finnish project with interest as the first new reactor to be built in a western country in years. It is also a high-profile project for Areva as the first commercial deployment of its EPR reactor, although France’s national utility, EDF, has since begun to build another EPR in Flamanville, France.
Areva and TVO have blamed each other for various aspects of delays at Olkiluoto, which began when a contractor had problems pouring cement to specification. But the two companies signed a new agreement in June 2008 revising their respective roles under a plan to accelerate the project.
But on Monday Areva said “the specific measures for speeding up the work, agreed upon and jointly announced in June 2008, have for the most part not been implemented by TVO.
“Furthermore, additional modifications imposed unilaterally by TVO and carried out by AREVA are not backed up by the requisite contract amendments,” Areva continued.
In order to make TVO “face up to its responsibilities,” Areva said it has proposed “methods of execution for the final phases of the project that are in accordance with standard industry practices for the construction of turnkey power plants.
“AREVA will only commence the final phases of the construction when TVO has agreed upon the proposals that have been made or issued contract amendments that provide for the requested modifications, both in terms of costs and time lines,” the French company said.
TVO could not be reached late Monday for comment.
All this makes one look forward to what might happen if a truly litigous country had a major nuclear Renaissance — say, 100 nukes costing, say, $1 trillion fueled by, say, taxpayer money (see “The nuclear bomb in the Senate stimulus plan” and Lamar Alexander (R-TN) calls nuclear “the cheap clean energy solution,” renews GOP call for 100 new nukes, which would cost some $1 trillion).
- What do you get when you buy a nuke? You get a lot of delays and rate increases”¦.
- An introduction to nuclear power