Finland’s New Reactor is Already Lowering Electricity Prices

It has been a while since a new nuclear reactor was built in Western Europe; 16 years since the last reactor came online in France. At least that was the case until April of this year. 

The day after the final shut down of Germany’s last three operating reactors, April 16th, Finland’s Olkiluoto 3 (OL3) a 1600 MW European Pressurized reactor (EPR) began regular power output to the grid. There is an irony in Germany’s once 17 reactor fleet pittering out the same weekend that Europe’s largest reactor ever is brought up to commercial power. As Germany ensured its future energy insecurity, Finland was ushering in a newfound security in electricity production.

This new reactor is a big deal both because of the long gap in new nuclear construction in Europe, and it is also important because it’s a new type of reactor. This is the first EPR built in Europe, with the first two units anywhere having been built at the Taishan Nuclear Power Plant in China in 2018 and 2019 respectively. Reactors of this design are currently planned in both France and the United Kingdom. 

The Olkiluoto 3 project has not been all sunshine and roses, though. Construction on the project began in 2005, and the initial plan was to have the unit operational by 2009. The initial budget set out for the project was 3 billion euros, but by completion 8 billion had been spent, and the project was 14 years late. This is a major cost overrun, but when the 60 year projected lifetime of the reactor is considered, along with the significant size of its output, there is less sticker shock when it comes to the price. 

This unit alone supplies 14 percent of Finland’s electricity demand, while the three Olkiluoto reactors provide a combined 30 percent of the country’s electricity. 

But despite the costs and the time it took, the project is starting to pay off for the Finish grid already. After significant electricity price spikes following the Russian invasion of Ukraine and Finland’s banning of energy imports from the country. The threat of electricity shortage had begun to loom during that period, as it did across much of Europe. 

Spring floods and their concomitant hydropower production coupled with the capacity of the new 1600 MW nuclear reactor have caused the average monthly retail cost of electricity to come down considerably. Spiking at 261.53 Euros per megawatt-hour in August of 2022, the price was sitting at 26.52 Euros per megawatt-hour in May of 2023. The last time the price was that low was July of 2020, and the figure is below any of the pre-pandemic 2019 prices. 

Now that price reduction is not solely due to the addition of the nuclear plant, the price was already back into the 70 Euro per megawatt-hour range in the early months of 2023; but the addition of so much new capacity has certainly contributed to both the price improvement, and to a newfound sense of energy security. 

Finland has also recently finished construction on the world’s first geologic repository for spent fuel, further solidifying the future continuation of its nuclear fleet. 

This new reactor coming online is a good sign for both energy costs in Finland, and the country’s energy security and independence. It is especially worthy of note given the very different reality for energy elsewhere in Europe as Germany has voluntarily hobbled its own energy independence. For a country as small as Finland, a single new nuclear reactor, especially one of this size, can make a huge difference in the energy economy.