Director General Huttunen: Nuclear power has a long-lasting role as climate-friendly baseload power substituting fossil fuels

Ministry of Economic Affairs and Employment 5.2.2019 11.55
Press release

– Nuclear power has a long-lasting role as climate-friendly baseload power as fossil fuels need to be replaced quickly in emission-free ways to generate energy. This role will be emphasized in the coming years and decades, when global greenhouse gas emissions will have to be dramatically reduced in order to halt climate change, says Riku Huttunen, Director General of the Ministry of Economic Affairs and Employment, in his opening speech at the Nordic Nuclear Forum conference to be held for the first time in Helsinki on 5 February 2019.

his role will be emphasized in the coming years and decades, when global greenhouse gas emissions will have to be dramatically reduced in order to halt climate change, says Riku Huttunen, Director General of the Ministry of Economic Affairs and Employment, in his opening speech at the Nordic Nuclear Forum conference to be held for the first time in Helsinki on 5 February 2019.

Opening statements of Mr Riku Huttunen

Welcome to the first ever Nordic Nuclear Forum.

The global role of nuclear energy

The news on climate change are alarming. Last year, the report by the IPCC underlined that – in order to avoid too harsh negative consequences – the aim under the Paris Agreement should be to limit global warming to 1.5 degrees.

We need swift action to decrease the amount of greenhouse gas emissions in all parts of the economy: industries, homes, agriculture, transportation, waste management etc. Focusing on energy field, the biggest worry is that fossil fuels cover over 80% of energy supply. Their use in absolute terms is also growing all the time if we proceed with no new policies. The challenge is enormous, especially in the context of global population growth and economic progress in developing countries. We must succeed in decoupling growth and emissions.

What should be done? It is evident that we need a huge amount of investments for energy transition. They should concentrate on increasing resource efficiency, e.g. by circular economy, as well as on deploying non-emitting energy sources. Much wider use of renewable energy sources and technologies globally is crucial.

At the same time, however, we must not forget the role of nuclear power. In many countries, nuclear energy is a central part on low-carbon electricity production. For example, here in Finland the share of CO2-free power is already 80% and growing, thanks to investments in renewables and nuclear power.

Continuing the use of existing nuclear power plants is one issue: decisions on lifetime extensions should base on both safety and economics. Today, it seems that many of the operating units can be used for a longer time than originally expected. Prerequisites for that are of course good operating and safety records as well as continuous maintenance. Modifications fulfilling tighter safety requirements are important in many cases, but quite challenging also for the authorities.

Newbuild is another issue. Construction projects take a long time from planning phase to commissioning. The price of power plants has increased considerably. As a consequence, the competitiveness of nuclear power has decreased. It seems that new kinds of regulation, project management and facilities might be necessary in order to keep costs bearable. There is no silver bullet to solve the price issue. One potential road, however, would be further harmonisation of national regulations and standardised construction designs.

In any case, I see that nuclear power has a long-lasting role as climate-friendly baseload power substituting fossil fuels. This role is even more important in coming decades when global emissions have to be decreased drastically.

Responsibility in the low-carbon energy future

Safety comes first. It is evident that there is no nuclear energy future without high responsibility and clear nuclear safety rules and standards. Safety culture is also a much wider issue: concerning every action in the nuclear field, we have to take into consideration the overall safety. We have to improve our safety performance and learn from each other’s experience.

With regard to economics, responsibility means that nuclear power operators should face all the lifetime costs related to their operation. That means not only the construction and maintenance costs, but also waste management, decommissioning and possible other liabilities. There we need clear and predictable legislation and funding, especially concerning nuclear waste management.

Nuclear energy field must also take into consideration the rapid changes that take place in the in the society: electrification, digitalization, cyber security etc. The key challenge is to enable the overall transition to low-carbon economy. The intermittent energy sources, wind power and photovoltaic, are growing fast. The role of fossil fuels – coal, natural gas and oil – will decrease. This all means that the power system has to become more flexible. To make this happen, we need smart grids, flexible demand, aggregating services, datahubs, etc.

And it’s not only about electricity. Integration of different kinds of energy use – electricity, heating/cooling, mobility, and industrial processes – is the future. Not least because sector coupling makes the use of resources more efficient and cost-effective.

What does this mean for the future of nuclear power? One aspect is flexibility. It seems wise to invest in smaller units in the future. Taking into consideration the role of intermittent production and the overall electrification of the society, both power supply and demand can become more volatile. Stronger power grids and interconnections will help, but not solve the issue fully.

Another point speaking for smaller power plants is frequency control of the system. Rotating power sources keeping inertia in the AC system are crucial in order to avoid blackouts and other problems. The bigger the individual units are, the harder it is to maintain system stability by the grid and transmission system operator. Big is not necessarily beautiful!

One further future scenario is developing Small Modular Reactors capable providing heat for the cities and industrial processes. In many locations, substituting fossil fuels is most challenging in the heating sector due to existing infrastructure etc. SMRs provide one possible option. Relevant factors affecting the future of small reactors are – once again – safety, economics and regulation.

Finnish projects and expertise

In Finland, the nuclear energy scene is evolving and changing in many ways. Some of the projects have also international interest value. Keeping that in mind, I will describe briefly topical issues in this country. They might mirror some essential challenges present in many other countries as well.

To start with, the original fleet of four nuclear power plant units constructed in 1970’s and 1980’s is still up and running. Actually, just five months ago, TVO’s units Olkiluoto 1 and 2, up to 890 MW each, were granted a new operating licence until 2038. This will mean about 60 years of operation by then. The government decision was based on thorough safety and operability analysis.

Loviisa power plant’s two 500 MW units can operate until 2027 and 2030 according to the existing licence. The operator, Fortum Power and Heat, is considering a further licence application. That might be addressed to the next government formed after the parliamentary elections in April. In any case, the company needs to file an application before the current licenses will expire. The new application will concern either operating or decommissioning of the facilities.

Construction of Olkiluoto 3, the 1,600 MW EPR, has literally been a long story, a story too long to repeat here. There have been lessons to learn to all the parties involved. In any case, for the ministry, the final outcome, a safe and reliable power plant in our grid, is the essential issue. Actually, it seems that we are very close to that stage. In a few weeks, after safety assessment by our national nuclear safety regulator STUK, the ministry could be ready to present a decision on operating licence to the State Council. Loading, starting operations and connecting to grid will happen step-by-step after this. The full commercial operation is expected to start early next year.

The newest nuclear power project in Finland is Hanhikivi 1. It received a positive decision-in-principle by the government in 2014. The responsible company in this greenfield project is Fennovoima. The 1,200 MW reactor is provided by Rosatom and the company is also an indirect minority owner of Fennovoima.

There have been many delays in the Hanhikivi project for numerous reasons, including the fact that STUK is still waiting for the vast majority of documentation needed for its safety assessment. The original timetable postponed a lot. According to Fennovoima, construction licence could be topical in 2021 and operation could start in 2028. However, this information has not been confirmed.

Why is it important to have a solid and common view on the timetable? Firstly, it is an indicator on how the project is advancing. Secondly, the issue is important for the market. There are many other investors and actors in the Nordic-Baltic markets who are affected by this project. Finally, production unit of this size is very relevant to the planning of power grid investments, security-of-supply considerations etc.

For the ministry, acting as a regulator in the licencing procedure, the essential issue is that all the provisions and procedures of Nuclear Energy Act and related legislation are followed punctually. Strict regulation and safety requirements are transparent and should not come as a surprise to anybody.

Turning to horizontal issues, we find it extremely important that nuclear waste management and decommissioning are financed and organised in a consistent way. In Finland, the funding is ensured via Nuclear Waste Management Fund, which collects all the money from nuclear power plant operators. The funded amount today is close to 3 billion euros.

With regard to radioactive waste management, it is also my pleasure to tell that Finland is the first country in the world that has granted a construction licence for a spent fuel final disposal facility. This a logical consequence of decades of research and development work as well as responsible long-term planning. The Posiva facility will be ready for operation in mid-2020s.

All these projects and activities have increased knowledge and skills of Finnish nuclear community. Especially, I would like to mention our expertise in regulatory issues, safety analysis and nuclear waste management technologies. This expertise is available to organisations from other countries as well. Learning from is each other and cooperation are the key to success. I am sure you will find many relevant contacts and insights during this conference and in the exhibition.

I wish you all interesting and rewarding days in the Nordic Nuclear Forum!

More information
 Director General Riku Huttunen, MEAE, tel. +358 50 431 6518