The company said in a statement that Rosatom has sufficient resources and the necessary organisational flexibility to fulfil its contractual obligations “even in a difficult current environment”.
It said the project suffered some early delays, which is not unusual with complex nuclear construction projects, but has progressed with the finalisation of the plant design. At the end of 2021 RAOS Project delivered various key documents on schedule including a preliminary safety analysis report and a technical safety assessment of the design, demonstrating that the plant meets standards.
Accordinng to Raos Project, Rosatom is implementing several nuclear new build projects in Russia and abroad, including in China, India, Bangladesh, Belarus and Turkey. They involve 15 AES-2006 pressurised water reactor units of essentially the same type that was planned for Hanhikivi-1. In China and in India, six reactors with similar technology have “generated power with high reliability already for several years”.
Rosatom recently made similar criticisms of the cancellation, saying the decision was taken “without any detailed consultation with the project’s shareholders”.
Finnish energy company Fennovoima terminated its EPC contract with Raos Project citing “significant delays”, the company’s “inability to deliver the project” and worsening risks as a result of the war in Ukraine.
“There have been significant and growing delays during the last years,” Fennovoima said in a statement. “The war in Ukraine has worsened the risks for the project. Raos has been unable to mitigate any of the risks.”
Fennovoima did not say how the decision will impact construction at the Hanhikivi site, in northern Finland, where preparatory excavation work resumed in 2021 after a break of several years following revisions to the site boundaries.
In April 2021, Fennovoima said commercial operation of Hanhikvi-1 was likely to begin a year later than originally planned in 2029. It said total investment costs for the project had increased from €6.5-€7bn to €7-€7.5bn.
Hanhikivi-1 is a joint project between the Fennovoima consortium of Finnish utilities and Raos Voima. Finland’s Voimaosakeyhtiö SF, a consortium which includes industrial and trading companies and local energy utilities, holds a 66% stake in the project.
The decision to terminate the EPC contract with Raos Project was not made lightly, said Fennovoima chairman Esa Härmälä. “In a such a large project there are significant complexities and decisions are made only after thorough considerations. We fully acknowledge the negative impacts and will do our best to mitigate them.”
Hanhikivi-1 is being built using the ‘Mankala’ principle, a business model used in the Finnish electricity sector. Shareholders are responsible for the fixed costs of the power company, including servicing of debt. In return, shareholders have the right to buy the electricity produced, at cost, in accordance with their respective share in the company. Industrial shareholders use the electricity for themselves and electric companies sell it to customers.