Fortum’s recently concluded two-year feasibility study on new nuclear power—spanning small modular reactors (SMRs) and conventional large reactors—reveals a nuanced outlook: while nuclear could play a pivotal role in stabilizing the region’s energy mix, significant economic and regulatory hurdles remain.
Fortum’s analysis underscores a growing tension in the Nordics’ energy transition. While wind and solar capacity expands, their intermittency risks creating a power system plagued by price volatility and unpredictable supply—a scenario Markus Rauramo, Fortum’s CEO, calls “undesirable for customers and society.” The study positions nuclear as a long-term hedge against renewables’ limitations, particularly for industries requiring stable baseload power.
Yet the timeline for deployment is protracted. Even under optimal conditions, new nuclear projects would not come online until the late 2030s. In the interim, Fortum plans to rely on lifetime extensions for existing plants (like the Loviisa reactors) and expand its renewables pipeline, coupled with storage and pumped hydro.
The study’s most critical finding is that new nuclear is not economically viable on a merchant basis alone. High capital costs (€6–€10 billion for large reactors), decade-long construction timelines, and exposure to post-commissioning electricity prices render the investment untenable without risk-sharing mechanisms.
Fortum points to Sweden’s proposed “contracts for difference” (CfD) model—which guarantees stable revenue streams—as a potential template. Similar frameworks in the UK (Hinkley Point C) and France (EDF’s Flamanville) have faced scrutiny over cost overruns, suggesting Fortum’s cautious approach is warranted.
To mitigate risks, Fortum is deepening collaborations with EDF, Westinghouse-Hyundai (for large reactors), and GE-Hitachi (for SMRs).
Fortum’s study tacitly acknowledges that nuclear’s future hinges on political stability beyond electoral cycles. The EU’s recent taxonomy classification of nuclear as “green” helps, but national permitting regimes and local opposition (as seen in Germany’s phaseout) remain unpredictable.
The company’s next steps—refining business cases and testing investor appetite—will reveal whether nuclear can transition from a theoretical option to a cornerstone of the Nordics’ decarbonized grid. For now, the study serves as a reality check: while nuclear offers grid stability, its path forward is fraught with financial, technical, and political landmines.
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