Finns are pragmatic people who love their country, but also recognize its geographic limitations.
“Finland is a very cold and dark country. Electricity is very important to us. We are a kind of island in Europe, we have take care of ourselves. No one will help us if we run out of power.”
Way back in 2003, the Finns made a deal with a consortium led by Areva and Siemens to be the lead customer for the newly developed European Pressurized Reactor (EPR), an unproven design that includes the latest bells and whistles and meets all of the requirements that the EU has layered onto nuclear power plant designs during the past several decades. That new plant began construction at Olkiluoto and has experienced stridently-publicized cost and schedule problems ever since.
Some might think that such an experience would sour a small country like Finland on all nuclear energy technology, but those people would have forgotten the Finnish imperatives represented in the quote above. It is a cold, dark country where survival depends on having a reliable, affordable source of energy.
Hard nosed Finns have done the math and understand the options. They took the right lessons from Olkiluoto and did not abandon nuclear energy technology, they abandoned western European nuclear technology suppliers who had allowed their skills to atrophy and who had accepted suboptimal design requirements in an attempt to appease what they thought the EU regulators wanted them to do. Instead, the Finns chose Rosatom, a Russian nuclear power plant supplier that has been engineering and building nuclear power plants consistently for several decades.
Rosatom will supply a reactor with the model designation of AES-2006, a VVER (Russian for pressurized water reactor (PWR)) that meets all Finnish nuclear standards and also meets all international safety requirements. Here are some selected design basis bullet points of the AES-2006.
- Minimizing risks and improving operational characteristics by adopting proven technical approaches and by using equipment similar or identical to that used at existing plants
- Improving system and equipment characteristics by abandoning excessive conservatism and optimizing design margins
- Ensuring required level of safety, also in case of a beyond design basis accident, by selecting reasonable configuation of safety systems including active and passive elements to make possible more extensive use of diversity principle and to reduce the influence of human error
- using serial equipment and reducing equipment variety
- Minimizing expenditures for research and development performed to justify design solutions
In contrast with the recently announced arrangement for Hinkley Point C — a “35-year guaranteed, inflation-indexed “strike price” of £92.50 (€110) per MWh” –, which was the end result of an excruciating negotiation process, the deal that is being arranged for the new nuclear plant in Finland is expected to have a substantially lower price.
The plant will cost roughly €6 billion and will deliver electricity at “no more than €50 per MWh”, says Pekka Ottavainen, Chairman of Voimaosakeyhtiö, the cooperative of Finnish companies that own Fennovoima, in an interview with Energy Post.
Voimaosakeyhtiö is not a for-profit company; it is a uniquely Finnish energy business organization called a mankala.
The Mankala-principle denotes a company where the joint owners are obligated to answer for the costs in proportion to their ownership in the company, and the ownership gives the joint owners the right to the produced electricity. This means that the shares don’t equal dividend. Instead of making a profit, the purpose of the company is to produce affordable energy for the owners.
(Puikkonen, Ilkka, Cooperative Mankala-Companies — The Acceptability of the Company Form in EC Competition Law, Helsinki Law Review 2010, p. 140)
A mankala is similar to a cooperative that is familiar to American farming communities; it’s structure and purpose is nearly identical to the electric cooperatives that were initially developed during The Depression and remain a fixture in many American rural areas. The shareholders in a mankala are bound together in recognition that electricity can be supplied much more economically by cooperating together than by engaging in destructive competition.
In farming, infrastructure elements like grain elevators and marketplaces are often owned by a cooperative because they are subject to a recognized “economy of scale” that makes it silly for each farmer to try to run his own small scale infrastructure. Similar arguments exist in power generation; there is significant cost-saving and service-enhancing potential available by properly sizing generation systems and sharing the costs fairly among the power users.
Voimaosakeyhtiö’s participating shareholders have committed themselves to purchasing varying amounts of the power that will be generated by the Fennovoima project. Total commitments so far cover a little more than half of the plant’s design output. Rosatom, the plant vendor, will retain an ownership stake that allows it to sell approximately 35% of the plant’s output.
It is a competitive project model that should serve as an example to other vendors. It has the potential for demonstrating the real value of nuclear fission energy to provide reliable, clean, affordable power, even in a remote, cold, dark part of Europe. The “free market” is not always the best choice for providing electricity, a manufactured product that is an essential part of modern technological living.