Nuclear power plant project scrapped by Finland following the conflict between Russia and Ukraine

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The Fennovoima nuclear power plant was to be built by Russia, but it has now been cancelled because of delays and increased risks in Ukraine. The controversial energy project was abandoned following reports if not only delays, but also increased risks due to the war happening nearby. 


After the conflict between Russia and Ukraine, tensions have been escalating. This leads to uncertainty about whether the plant will be built by Rosatom, a Russian state-owned company. The project was controversial from its inception as it would have meant that Russia would supply one third of the country’s energy needs for the next fifty years. Fennovoima is an energy consortium made up of Finnish companies and E.ON, a German power producer. A similar project in Lithuania has also been scrapped due to concerns over nuclear safety in neighbouring countries at risk from terrorist attacks or military action. 


The cancellation of the Fennovoima nuclear power plant has generated significant controversy in Finland and around the world. Critics point out that this decision puts pressure on Finland to increase its use of fossil fuels and other energy sources, which has negative implications on the environment. Supporters of the project say that it would have provided a safe source of electricity for many years to come and therefore was necessary for Finland’s long-term economic growth. 


The controversy surrounding the Fennovoima nuclear power plant began soon after it was first proposed several years ago. Critics argued that it was too risky to rely on Russia for one-third of Finland’s energy needs, given that the country is surrounded by military conflict in Eastern Europe and at risk from terrorist attacks. Others pointed out that the project would likely have resulted in increased greenhouse gas emissions due to increased reliance on fossil fuels and other non-renewable energy sources, as well as requiring a substantial amount of land. 


Supporters argued that the construction of the plant would be a huge economic boon to Finland’s small, northern region, which is currently struggling with job loss and population decline. They also pointed out that this new type of nuclear power station was actually safer than traditional ones and would supply the country with clean, eco-friendly energy for years to come. Ultimately, these arguments were persuasive; Fennovoima has been given approval from regulatory bodies and is expected to start work on construction soon. 


Though people are still divided about whether or not it was a good idea for Finland to build this nuclear power plant, most experts agree that it will help strengthen the local economy in Northern Finland for many years to come. Following this, the Finnish government has finally announced that they will be building Hanhikivi 1, an energy plant which would increase Finland’s dependency on Russia. This news came after months of uncertainty and years worth political wrangling over the planned project. 

The Fennovoima nuclear power plant, which was commissioned by Finnish stakeholders including Outokumpu (OUT1V.HE), Fortum and SSAB in consortium with Russia’s Rosatom subsidiary RAOS Voima to own two-thirds of the project; though it received approval from Finland’s government earlier this year following unease felt among its citizens over Russian involvement despite them voting on behalf for Crimean Peninsula Region during 2014 elections where sentiment changed significantly after annexed resulting into smaller share than what had been originally planned. 


Now, the project is facing extreme turbulence as Germany’s E.ON (EOAN.DE) pulls out completely, leaving Russian-Finnish consortium with 67% of share and RUSNANO with 33% of shares; though there is still some wrangling over the planned project that could see it collapse altogether. 


After months of delays Fennovoima has finally received its construction license from Finland’s Nuclear Regulatory Authority and is expected to begin construction in 2018 or 2019, pending approval by Russia’s nuclear regulator ROSATOM which granted its own approval earlier this year. While Finland’s government was initially wary about investing in a project where Russia owns two thirds of shares; however, lack of alternatives convinced them to approve a loan guarantee for €3 billion in 2015. The Finnish government currently owns 34% of shares with the remainder owned by a consortium of Finnish companies, including power companies Fortum and TVO, which both have stakes of 9%. The largest shareholder is Russian state nuclear corporation ROSATOM with 66% of shares. 


With Russia’s occupation of Ukraine in February, Finland found themselves on the brink of applying for NATO membership. This decision has been made more difficult after their minister Mika Lintila repeatedly said it would be ” Absolutely impossible” for them to grant a construction permit inside Russian territory near their border with Sweden if one were approved elsewhere within Europe. 


However, it seems that Finland is still seriously considering joining NATO in the wake of Russia’s aggressive actions in Eastern Europe. This may have influenced Rosatom’s decision to pull out of Fennovoima, who has now been forced to look elsewhere for a nuclear partner. 


Some experts are arguing that if Finland joins NATO, this may help alleviate some of Finland’s fears regarding Russia and their plans to build an underwater missile defense system in the Baltic Sea. However, others argue that this would not be enough reason for Russia to abandon their plans entirely. Regardless, it will certainly be interesting to see how things play out as Finland continues to face increasing tensions with Russia over the coming months and years. 


This project was is set to cost over 7 billion euros, with the consortium reported to have spent 600-700 million already.