EON’s Exit From Finnish Nuclear Venture May Trigger Failure
EON AG’s plan to pull out of a joint venture that’s building a nuclear reactor in Finland increases the risk that the project may fail, thwarting the government’s plans to cut reliance on energy imports.
EON, Germany’s biggest utility, is seeking to sell its 34 percent stake in Fennovoima Oy by the first quarter and focus on operations in Sweden and Denmark, it said on Oct. 24. Fennovoima is preparing to start construction on the reactor, with a capacity of 1,600 to 1,800 megawatts, at Pyhaejoki in northern Finland in late 2016.
“It is entirely possible that Finland’s Fennovoima project will fail as a result of EON’s exit,” Timo Vainio, an analyst at Pareto Securities ASA in Helsinki, said by e-mail.
Failure to realize the project will leave an annual gap of at least 12 terawatt-hours in Finland’s future power supply, or about 14 percent of current demand. The Nordic country imported 21 percent of the power it used last year, as it lacks the oil and hydropower supplies of neighbors such as Russia and Norway, according to the country’s energy industries association.
Atomic energy provides power to electricity-intensive export industries, including paper and pulp production, chemicals and basic metals, which contribute twice the European average to the Finnish economy, according to the International Energy Agency.