Trends affecting the operational environment
Climate change and EU-level requirements concerning e.g. greenhouse gas emissions, emission trading and renewable energy sources
Integration of European energy markets
Support for renewables leads to increased capacity, lowering electricity prices
Changes in the political environment
Transformation of the energy markets and regulatory framework
Changes in customer preferences
Similarities with large-scale infrastructure projects
Fennovoima’s operational environment could be seen from two perspectives. Prior to commercial operations, Fennovoima’s operations have similarities with large-scale infrastructure projects. At this stage, factors such as availability of resources (labor, raw materials and know-how) impacting the project implementation play a key role.
After the start of commercial operations or in the utility company phase, Fennovoima’s operational environment is characterized by factors typical for nuclear power plants. For the operating plant, the factors affecting the plant operations, output, production costs, and electricity demand and market price are the most vital.
Energy markets and political environment
Fennovoima is dependent on the trends related to the energy markets and political environment.
A global climate agreement was reached at the United Nations Climate Change Conference in Paris in December 2015. For the first time, nearly all countries in the world committed themselves to tackling climate change, e.g. by reducing carbon dioxide emissions from electricity production. This is a welcome and challenging task. To achieve the goal, all emission-free energy forms are needed. Nuclear power capacity worldwide is increasing steadily, with over 60 reactors under construction in 15 countries.
In Europe, the pursuit of emission-free power generation has led to vast utilization of subsidies for renewable energy resources. However, in Finland, nuclear power plays a major role in the implementation of the Finnish Climate and Energy Strategy towards a carbon-free society, and currently more than 33 % of electricity production is based on nuclear energy.
Also, current international political trends can have an effect on Fennovoima’s project. Before the nuclear power plant is in operation, Fennovoima is dependent on the EPC Contractor, which is a Russian state company. Not only is the power plant being acquired from a Russian company, but also a significant amount of financing is being sourced from Russia. Thus, for instance, an escalation in the sanctions that have been imposed on Russia could affect negatively the project.
However, on a levelized basis, nuclear power is an economic source of electricity generation, combining the advantages of security, reliability, very low greenhouse gas emissions and cost competitiveness.