Finland will start a much-delayed nuclear power plant, bringing a respite to the electricity market
Essi Lehto and Nora Buli
HELSINKI (Reuters) – Finland’s long-delayed Olkiluoto 3 nuclear reactor started pilot production on Saturday, according to operator TVO, supplying electricity to the national grid is expected to reduce the need to import electricity over time and lead to lower prices.
The 1.6 gigawatt (GW) reactor, originally scheduled to open in 2009, is the first new nuclear power plant in more than four decades and the first in Europe in almost 15 years, plagued by technological problems.
Olkiluoto 3 started test production with more than 0.1 gigawatts, a small part of its capacity, and it is planned to increase it to full, normal electricity production by the end of July.
“OL3 will significantly improve Finland’s electricity self-sufficiency and help achieve carbon neutrality targets,” Teollisuuden Voima (TVO) says in a press release.
When fully operational, it is expected to cover 14% of Finland’s electricity needs, which will reduce the need to import from Russia, Sweden and Norway.
“Olkiluoto 3 will reduce Finland’s import dependence and make it a cheaper price zone,” Alexander Esser, an economist at Aurora Energy Research, told Reuters.
In recent years, Finland’s net electricity imports averaged 13 terawatt hours (TWh), which should fall to 5-8 terawatt hours by 2025 when Olkiluoto 3 is in use, Esser said.
Nuclear power is still controversial in Europe, with some countries, such as Germany, abandoning reactors for safety reasons, while others, such as France and Britain, are discussing new developments.
TVO is owned by the electricity company Fortum and smaller energy and forestry companies.
Finland is the only Nordic country with a large electricity shortage, says Marius Holm Rennesund, a partner at Oslo’s consulting company Theman.
Thema predicts that Finnish wholesale electricity prices will fall to 60 euros per megawatt hour (MWh) in 2023 from the forecast average of 2022 euros / MWh in 2022, although the expected decline will also come from a decrease in gas.
In 2024, wholesale electricity prices in Finland will continue to fall to 45 euros / MWh, Rennesund said.
(Reported by Essi Lehto in Helsinki and Nora Buli in Oslo; editor Terje Solsvik)