Finland EPR Dispute Gets Costlier

The AREVA-Siemens consortium that is building the Olkiluoto 3 nuclear reactor in Finland, and the plant’s owner, Finnish utility Teollisuuden Voima Oyj (TVO), have again increased claims and counterclaims for billions of dollars in costs and losses, which they say are caused by delays afflicting the world’s first EPR project.

At the end of 2003, TVO signed a €3 billion ($3.7 billion) fixed-turnkey contract with the AREVA-Siemens consortium for construction of the EPR unit. But since construction began on Olkiluoto 3 in 2005, completion of the 1.6-GW reactor has been consistently plagued by delays, putting the project nearly 10 years behind its original start date in 2009. AREVA now estimates the reactor may not start operating until late 2018.

AREVA has blamed TVO for delays, revealing in September, for example, that the utility finally approved the reactor’s instrumentation and control system architecture after a four-year period of exchanges. TVO has alleged that because the AREVA-Siemens consortium contracted to build the plant, it is “naturally responsible” for the time schedule and for the acceleration measures required for keeping the schedule, as well as liable for any possible cost increases resulting from the delay.

The companies last week submitted updated estimates to the International Chamber of Commerce (ICC), the international arbitration court where proceedings have been ongoing since December 2008, when initiated by the AREVA-Siemens consortium.

TVO’s latest estimates for costs and losses incurred from the delays have increased to €2.3 billion ($2.9 billion) through the end of 2018. The AREVA-Siemens consortium updated its arbitration claim from €2.7 billion ($3.7 billion) in 2013 to €3.5 billion ($4.4 billion). That figure, it says, covers “additional work, disruption and prolongation of the project.”

TVO said in a statement on Friday that the consortium’s estimate includes penalty interest and “payments allegedly delayed by TVO under the plant contract, as well as approximately €150 million [$191 million] of alleged lost profit.” It said the claims are “without merit.”

Arbitration proceedings are expected to continue for several years, and the amounts may be updated again, as TVO notes.

—Sonal Patel, associate editor (@POWERmagazine, @sonalcpatel)