Fortum’s Feasibility Study: Paving the Way for New Nuclear Build in the Nordics

Petra Lundström, Executive Vice President, Nuclear Generation

 At Fortum, we are currently conducting a comprehensive two-year feasibility study focused on the commercial, technological, societal and regulatory prerequisites for new nuclear in Finland and Sweden. Our mid-term results have provided valuable insights where we have identified a viable market presence for both large-scale and small modular reactors.

Throughout our study, we have evaluated 11 reactor types, gaining a deeper understanding of reactor designs and vendor capabilities. Both Small Modular Reactors (SMRs) and large reactors show potential for commissioning by the mid-2030s.

While SMRs offer the advantage of shorter construction times, they are expected to have extended preparation and licensing times, since most of them are still in early design phase. Conversely, large reactors are readily available in the market but come with a longer construction phase. To ensure successful deployment within the set time frame and budget, it is crucial that the reactor design undergoes minimal changes compared to the standard design. This principle applies to both nuclear and non-nuclear requirements, regardless of whether the reactors are large-scale or SMRs.

A Fleet Approach

Adopting a fleet approach is crucial for achieving competitive nuclear power production. The strategy of constructing reactors in series can substantially reduce the average electricity cost over time. This approach necessitates the construction of identical reactor designs with minimal modifications. There are also advantages to constructing multiple reactors at the same location. At present, single-unit sites that only supply electricity seem to pose economic challenges, particularly for small modular reactors, except if co-generation of power and heat is used. The fleet principle is equally applicable to both large and small modular reactors.

In addition to a fleet approach, efficient risk-sharing between public and private sectors should yield the most beneficial outcomes for the Nordic region. The benefits of nuclear are indisputable in providing clean and stable electricity at scale to decarbonize our industries and societies, and in providing regional energy independence irrespective of geopolitical shifts. However, the current market’s uncertainty and volatility do not sufficiently encourage investments in new nuclear projects. To make new nuclear power competitive, stable income mechanisms are essential.

Nuclear projects are notably capital-intensive and require substantial upfront investment. Significant capital expenditure is needed before any revenue can be generated from production. A risk-sharing approach involving the generation company, vendor, potential customers, and the state could significantly lower the cost of capital and enhance the economic viability of new power plants.

Next Steps

As we move forward, we will identify potential sites for new builds. These sites will undergo further investigation to facilitate more detailed business planning. Financing and de-risking the different phases of the project is also a crucial next step. Vendor evaluation will entail comprehensive analysis of the designs, with the goal of narrowing down the list by the end of the feasibility study. We are also in ongoing dialogue with regulators and relevant ministries. Finally, the development of an effective contract model is vital to the success of the projects.

Fortum’s ongoing study is not just a significant step towards a sustainable, net zero future, but also a determinant of our next course of action. The results of this study will decide whether we proceed with a plan for new builds or not.

This study has the potential to significantly impact the future of nuclear energy in Finland and Sweden. As we continue to navigate the path towards a greener future, we remain committed to exploring all avenues that lead to a sustainable, carbon-free world.