Plant Operation

TVO To Restructure As Pressure Mounts From Subsidised Energy And Olkiluoto-3

By Lubomir Mitev
9 January 2015

TVO To Restructure As Pressure Mounts From Subsidised Energy And Olkiluoto-3
The Olkiluoto-3 nuclear reactor under construction in Finland.

9 Jan (NucNet): Finnish utility Teollisuuden Voima Oy (TVO), which owns and operates the Olkiluoto nuclear power station, is to restructure its operations in an effort to find savings of €15 million a year, saying it is coming under pressure from subsidised energy sources.

The company said it will begin a six-week consultation process with employees to find ways to improve “cost efficiency”.

It also said delays to the Olkiluoto-3 EPR reactor project have caused “remarkable” additional costs leading to the need to start with these “regrettable” measures.

According to preliminary estimates, the planned restructuring will include job cuts of up to 110 staff. The cuts will exclude staff who operate the Olkiluoto nuclear power station, safety engineers and those authorised by Finland’s nuclear regulator to work for the company.

A TVO spokesman told NucNet the consultation process is required by Finnish law and will include discussions between employer and employees about how to achieve the necessary restructuring with the least possible effect on the staff.

TVO also said it will transfer support functions such as communications from Posiva, the organisation responsible for the final disposal of spent nuclear fuel. TVO is a majority shareholder in Posiva, together with the utility Fortum Oyj.

The transfer, which will affect 30 of Posiva’s 100 employees, is aimed at achieving further efficiency gains, TVO said.

TVO’s chief executive, Jarmo Tanhua, said the restructuring is necessary because the company’s competitiveness has weakened due to a drop in electricity market prices and an increase in nuclear power production costs.

TVO told NucNet today it is finding it difficult to sell its electricity at market prices, which are around €30 per megawatt-hour (MWh), according to Nord Pool Spot market data, while other energy sources are being subsidised at levels of around €115 per MWh.There are no subsidies for nuclear in Finland.

Cost increases have also resulted from TVO being asked to contribute more to Finland’s nuclear waste fund and having to implement increased and improved security measures at Olkiluoto. There are plans for new “small” taxes on nuclear energy being discussed in Finland’s parliament, which could result in even higher costs, TVO said.

Olkiluoto-3 is an Areva EPR nuclear unit expected to become operational in 2018, nine years behind schedule. In October 2014, the Areva-Siemens consortium building the unit increased an arbitration claim against TVO to €3.5 billion in cost overruns for the project. TVO’s counterclaim is for €2.3 billion.

TVO, Areva and Siemens are in arbitration proceedings at the International Chamber of Commerce in Stockholm to try to resolve their financial disputes over the reactor.

Finland has four commercially operational nuclear reactors – two at Olkiluoto and two at Loviisa. According to the BP statistical review of world energy, they generated 20.7 percent of Finland’s energy in 2013.

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