Observers of the Finnish parliamentary vote supporting the construction of a fifth nuclear power plant could be forgiven for believing it is a resolution carved in stone. But with nuclear power generation costing more today than wind power, and wind's prices decreasing, the May vote to green-light nuclear plant operator Teollisuuden Voima Oy's (TVO) application is not a done deal yet.
The vote proved a close call, with 107 for and 92 against the proposal. TVO, controlled by some of Finland's largest forest companies, is hoping to start work on the nuclear facility by 2004 and commission it in 2010. Finnish industry may be supportive of additional nuclear generation, but a majority of the voting electorate in Finland is opposed. Latest polls show 56% of Finns are against any further expansion. With parliamentary elections in March 2003, all coalition parties in prime minister Paavo Lipponen's multi-party rainbow government will be keen to keep voters on-side.
There is a growing body of support within the electorate for renewable energy. Finns are also beginning to realise that they may have to pay more for their electricity, and not less, if a fifth nuclear plant is built. And although a decision in principle to build the plant has been agreed, the final authorisation will be made by whatever government comes into power.
The first fall-out from the parliamentary vote was the resignation from government of the Green League led by environment minister Satu Hassi. While the action never threatened to destabilise Lipponen's five party coalition, it did inject a little controversy into what would have otherwise been a low key election campaign. The Greens have been part of the government since 1995.
"Nuclear power is not the answer to Finland's energy needs," says Hassi, the Green League's only government minister. "Economics demands that renewable energy be prioritised. Wind power has not been developed properly in Finland because the country's large industrials don't want it." Osmo Soininvaara, the Green League's chairman, adds: "The Greens will campaign hard for the reversal of this decision, and go to the electorate with a no to nuclear power manifesto."
With the marginal price of electricity currently running at less than $0.02/kWh kilowatt hour in Finland -- electricity was trading on the Nordic power exchange in the first week of June at $0.019/kWh -- the ability of new nuclear to compete is puzzling the population. "Our all inclusive calculations indicate that the production costs of a fifth nuclear plant would be 2.4 cents a kilowatt hour. There have been concerns for some time over the wisdom and timing of building a fifth nuclear plant. The cost advantages are simply not there," says Risto Tarjanne, professor at the Lappeenranta University of Technology's energy department. "There are options. Renewable energy, and in particular wind turbines, remains a viable option." Tarjanne's estimate is also far lower than the $0.06-0.08/kWh cost of electricity from operating nuclear plant today (Windpower Monthly, January 2001). Wind power on a fair site costs $0.05/kWh.
The cheap price of electricity in Finland is a direct result of the liberalisation of Nordic electricity markets in the 1990s. Older power plants, including Finland's four nuclear reactors, have no stranded costs to account for as the lion's share of their construction costs have long since been recovered. Within the next 20 years, around half of the current plants may need to be renewed. But with low electricity prices in Scandinavia, it is cheaper for Finland to import electricity rather that generate it.
"When capacity eventually decreases, prices will rise up to a point when it is once again profitable to construct new power plants. This is not the time for major investments like a fifth nuclear plant but perhaps, if all other options prove unworkable, a nuclear power unit could be built in the future. I don't expect electricity prices will increase again for several years," says Tarjanne. It would take "40 profitless years" before an investor could expect to see a return on a fifth nuclear power plant, he adds.
Investing in wind
Political champions of the fifth nuclear power project insist they are not anti-renewables. "We would like to see more investment in wind power. And I believe this will happen once the national economy secures a solid energy generation base. Nuclear power will be the core. That does not mean that renewable energy should be forgotten," says Leena Luhtanen, a Social Democrat and chair of the parliament's commerce committee. She has lobbied openly on behalf of Finland's wood and engineering industries.
"We cannot rely on cheap energy imports from Russia, and Finland must not rely on energy imports from other Nordic countries," adds Luhtanen. "Finnish industry needs more cheap energy and the only viable alternative is nuclear power. Wind turbines and natural gas will play a part, but alone, they are not capable of meeting the need." Sinikka Mankare, trade and industry minister, admits, however, that not following the nuclear option would make it easier to invest state funds in wind energy.
Despite its commitment to nuclear, the government, too, is still promising renewed efforts to promote private investment in wind farms. The promise comes in the wake of what was yet another mute year for the Finnish wind energy sector in 2001. Lipponen's Social Democrat led coalition came to power in 1998 with a promise to set about rekindling private investor interest in the wind energy sector.
What Lipponen described as "a new era for wind-power" resulted in a 12 year program with the goal of building 400 MW of wind by 2010. Four years on, just 39 MW was turning at the close of 2001 -- just 1 MW more than the previous year. The program had banked on adding 30-31 MW annually to the national grid over the 12 year period.
The Greens had aspirations to increase wind generation to 3000 MW, or 10% of total Finnish electricity consumption. But they failed to stamp any real authority over government environment policy. A recent poll of the country's 1000 leading politicians and business leaders revealed that just 30% view wind power as being cost efficient, while 41% said they preferred investment in bio-energy and hydropower.
A major study for the state technical institute VTT, "The Effects of 3000 MW of Wind Production on The Finnish Power System," supports the view that wind is not cost effective. It put the spotlight on what it termed the "cost efficiency gap" and claimed, contrary to several other European studies (Windpower Monthly, July 2001), that dedicated back-up generation would cost EUR 0.02/kWh more for a theoretical 3000 MW of wind than for conventional production. Over 90% of the 3000 MW is envisioned located in 12 offshore blocks, ranging in size from 50 MW to 500 MW. The turbines used for the study were Bonus 2 MW units and a 5 MW "multibrid" turbine from German Pfleiderer.
Despite its negative slant, the study also says that conditions for wind power generation are better in Finland than in Denmark, particularly wind strengths offshore. Indeed, a report commissioned by Helsinki City Planning Department (HCPD) measured average wind speeds of 7.5-8 m/s off the south west coast, the primary focal point for existing offshore wind farm interest.
"Wind power could prove to be a very attractive alternative to nuclear, natural gas, coal and biofuel powered plants. The next government could support a clean energy policy and link it to the Kyoto agreement. This would change wind power's competitive position and radically alter how investors view the wind power industry in Finland," comments HCPD engineer Jouni Kilpinen.