Fennovoima Cancels Hanhikivi 1 Contracts

Finland’s nuclear power company Fennovoima said this week it had terminated contracts with Rosatom for engineering, procurement and licensing activities for the Hanhikivi 1 nuclear power plant project, citing increased risk of delays due to the Russia’s invasion of Ukraine.

Hanikivi 1Fennovoima based its decision on “significant delays and inability to deliver the project,” noting “There have been significant and growing delays during the last years.” However, added to that statement Fennovoima said, “The war in Ukraine has worsened the risk for the project. RAOS has been unable to mitigate any of the risks.”

While considered late in the process of construction licensing, World Nuclear Association noted that the Finnish city of Vantaa in late March advised its municipal energy con ern Vantaan Energia to abandon the project with the warning that it was “unlikely” to issue a construction permit under the current political situation, which includes economic sanctions against Russia for its aggressive behavior against Ukraine.

Finland’s Ministry of Economic Affairs and Employment also confirmed the political aspect of the termination, saying “The termination of the contract is an understandable measure in this situation.”

Rosatom quickly acknowledged that, “We are extremely disappointed that Fennovoima Oy had taken the decision to terminate its EPC contract with RAOS Project.”

The supply contract signed in December 2013 with Rosatom Overseas called for a fixed price project for a 1200 MWe AES-2006 VVER reactor. Site preparation work has been underway and Fennovoima Oy in January said licensing procurement was in the final stages.

The contract termination was abrupt with Fennovoima Oy’s CEO noting the economic hardships involved. “Unfortunately, the termination of the EPC contract is estimated to have a significant employee impact in Fennovoima and is expected to impact also the supply chain companies and Pyhäjoki region. Our main objective is to support our employees by keeping them informed and work in close cooperation with both our employees and employee representatives. In addition, we focus on preserving the site,” said Joachim Specht, Fennovoima’s chief executive officer.

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