Nuclear energy's role in shaping the energy balance of Finland

Pekka Lundmark's speech at Atomexpo 2016
Dear Colleagues and Partners,
Ladies and Gentlemen,
It is a great pleasure to join you today and bring the Nordic and Finnish perspective to this session.

We at Fortum believe that the world is moving towards an energy system based on infinite and renewable energy sources with very little CO2 emissions. It is a system, where energy use and production merge in the sense that consumers become prosumers, producing and also selling their own electricity. Increased flexibility - not only on the production side, but also on the demand side - is a characteristic of the new energy system. In this system, electricity use will not decline. On the contrary, it will increase as traffic becomes electric, industry processes are increasingly automated and homes fill-up more appliances.

But before we can harness all the electricity and heat we need in the modern society from the sun, wind, waves and biomass, CO2-free nuclear power will, indeed, have a very important role to play. It is particularly important in replacing high-emitting and inefficient coal-fired plants in base-load production and for providing predictability to the energy system as more and more intermittent renewables enter the system.

Unlike some other European countries, Finland is not planning on phasing out nuclear power or indirectly forcing operators to early closures with unreasonably heavy taxes and fees. We are also fortunate in the sense that we have constantly developed and improved the safety of our power plants, so we do not face the extensive modernization projects required elsewhere in Europe in the aftermath of the Fukushima accident. Furthermore, as a first in the world, Finland has granted a construction license for a final disposal facility of spent nuclear fuel to Posiva, an expert organization jointly owned by Fortum and TVO.

Currently, nuclear power accounts for just over a quarter of the electricity consumption in Finland. In the next decade, the share will grow as the new units in Olkiluoto and Hanhikivi are taken into use. At the same time, our own units in Loviisa are closing in on their lifetime in the late 2020's. They now account for approximately 10% of the Finnish electricity use and we have not yet made a decision whether we will apply for a permit for their replacement.

Ladies and gentlemen, as said, I believe that nuclear power is an important transition phase, base-load provider as society moves towards a completely CO2-free energy system around the year 2050. But what would it take for nuclear power to have a role in the Nordics also after that?

First and foremost nuclear power has to be safe. The importance of an operating model and culture based on continuous improvements cannot be over-emphasized. It is the single, most important prerequisite for a license to operate.

Secondly, nuclear power has to be more affordable. As the safety standards have become more stringent, the complexity of the plant design has increased. And this, as we all know, has resulted in significant cost and schedule overruns in new-build projects in several countries. Right now, it looks like nuclear soon cannot compete with the shrinking technology cost of renewables.

Thirdly, nuclear should participate in the power market with the same terms as all other production forms. Right now, in many European countries, nuclear is penalized with production and capacity taxes putting it to disadvantage compared to other CO2-free production forms. On the other hand, proposed capacity support mechanisms to nuclear in some countries threaten the competitiveness of other energy efficient production. We at Fortum believe that transparency and technology neutrality are the best ways to ensure the lowest cost of power generation on the societal level.

What is the solution then? I believe the nuclear industry should work towards more standardized designs and better utilization of lessons-learned from existing projects. Here, international harmonization of safety requirements and of other standards is key and an area where we must continue our joint efforts. The goal should be that there is no need to redesign a nuclear power plant and make it "first-of-a-kind" each time it is implemented in a new country.

We could also strive for more simple designs. Full utilization of the potential of passive safety technologies and other innovations, for example, is a development point that we at Fortum have recognized. Sometimes complexity does not add to safety, only costs.
Dear colleagues, as a CO2-free production form nuclear power can be a valuable tool in building tomorrow's energy system. Governments should enable this development by offering a fair and transparent operating environment, but it is up to the industry to make sure nuclear power meets the society's high safety requirements and is also economically viable.

Thank you!