A Finnish nuclear project is on the brink of complete collapse after EON AG (PINK: EONGY) announced it may pull out. This would create another obstacle in the government’s plan for increased energy independence.
EON is trying to sell its 34 percent stake in Finland’s Fennovoima Oy project by the first quarter of next year, preferring to focus on Sweden and Denmark instead, Businessweek reports.
Construction is expected to start in late 2016. The facility, located at Pyhaejoki in the north of Finland, will have a capacity between 1,600 and 1,800 MW.
“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.
If the project fails, Finland will face a yearly deficit of 14 percent of its power demand—12 terawatt-hours minimum.
Last year, Finland imported 21 percent of its power needs.
In the summer of 2013, FInalnd hopes to choose a supplier for the reactor as well as raise more funds from shareholders. A replacement company must be chosen before then.
The project will provide power at production cost to its shareholders over the lifetime of the plant.
The Finnish company Teollisuuden Voima Oyj is developing the 1,600 MW Olkiluoto-3 reactor for the project, set to be the largest reactor in the world.
The problem with EON’s exit is it is the only partner of the project’s 62 companies with the requisite nuclear expertise. Its stake could be valued at as much as $908 million.
But the sheer scale of the project will make it difficult to find a suitable replacement. Fennovoima needs not just the financing but also the nuclear know-how.
Financial pressures and energy market uncertainties have seen several high-profile withdrawals by utilities across Europe, especially when it comes to nuclear power. EON and RWE AG, of course, hit the headlines recently for their exit from the U.K. Horizon project.