The managers at Finnish electric utility TVO expressed one last wish before ordering what would be the world's largest nuclear power plant from Siemens and the French nuclear power conglomerate Areva. They wanted the reactor to be painted oxblood red and white, the traditional colors of the picturesque summer homes on Finland's western coast.
At least the two companies have managed to fulfill that request. Workers are currently securing colored panels to the turbine building. Otherwise, not much is going as it should be on Europe's biggest nuclear construction site.
TVO and the two manufacturing companies are involved in a heated dispute, as they battle over billions in out-of-court settlements. Costs have exploded, and the project is already several years behind schedule. Critics accuse the consortium of having made dangerous mistakes. The concrete, they say, is porous, the steel is brittle and some of the design principles seem so risky that experts from the Finnish nuclear regulatory agency can only shake their heads in wonder.
TVO and Areva are doing their best to create the impression that everything about the project is fine. Floodlights illuminate the future reactor building, convoys of cement mixers criss-cross the site, and workers wearing protective jackets walk around, speaking Polish, Finnish, German, French, Slovak and Serbo-Croatian. In the administration building next to the construction site, TVO project manager Jouni Silvennoinen recites one superlative after the next. According to Silvennoinen, the world's first third-generation nuclear reactor, a European Pressurized Water Reactor (EPR), is being build at this site near Olkiluoto on the Gulf of Bothnis. The most powerful nuclear power plant in the world, he says, will be capable of generating enough electricity to support a city of one million inhabitants.
Silvennoinen is adept at working with a laser pointer and big numbers. He says that 4,300 workers from 60 countries, working for 700 subcontractors will pour 200,000 cubic meters (7,057,510 cubic feet) of concrete on their multinational construction site. "It's impressive to see all these thousands of people working to achieve a common goal," says Silvennoinen.
Bad News for the Nuclear Industry
Areva project manager Jean-Pierre Mouroux isn't particularly worried about the construction problems. "We've learned a lot and have acquired experiences that we can use for the next EPR," he says.
In reality, however, the problems with this showcase plant are bad news for the nuclear industry, which has been hoping for a comeback of its large-scale technology. Olkiluoto was meant to be its model for the future, but now those hopes appear to have been dashed.
Nuclear industry executives in the industrialized countries are not pinning their hopes on new plants as much as on a sort of low-cost renaissance. The want to see their aging plants, built in the days when VW was still making the Beetle in Germany, simply continue to produce electricity well beyond the end of their originally planned lives. Even in Germany, where nuclear power is not very popular, the future administration of the conservative Christian Democratic Union (CDU) and the pro-business Free Democratic Party (FDP) wants to make it possible for the nuclear industry to extend the lifelines of its plants.
Modernization instead of new construction. Is the new strategy to launch a renaissance through the back door? At first, the chaos surrounding the Olkiluoto reactor reveals that the industry is by no means ready to build new power plants cheaply and safely in the Western world. Utilities, with their massive financial risks, can no longer support such mammoth projects -- unless the government steps in.
Hardly anyone had expected a disaster when the French state-owned company Areva and Germany's Siemens Group offered the Finns a turn-key version of their EPR prototype: for a total price of €3 billion ($4.47 billion). The French assumed responsibility for the nuclear portion and the control technology, while Siemens' main role was to supply steam turbines and transformers. It was December 2003, and it seemed like a good deal to the TVO managers.
The plant was originally scheduled to go into operation this spring. But now its grand opening has been rescheduled for 2012 -- perhaps. Whether the project will succeed "depends on the behavior of my clients," says Areva executive Mouroux. He is referring to TVO.
Besides, the construction will cost at least €2.3 billion more than originally planned. The reserves for anticipated losses are eating up virtually all of Areva's corporate profits. Siemens, for its part, has already been forced to set aside sums numbering in the triple-digit millions.
Drawn-Out Court Cases
This prompted Areva to sue TVO for €1 billion in damages at the beginning of this year. The suit alleges that TVO spent too much time processing blueprints and other documents. TVO has filed a countersuit, demanding €2.4 billion in damages for lost earnings as a result of delayed completion of the plant. The court cases will likely continue long after the construction is complete.
Meanwhile, executives at both companies have taken to constantly attacking one another. Areva CEO Anne Lauvergeon recently threatened to stop construction in Olkiluoto unless TVO agreed to fixed rules of cooperation and approved everything more quickly. A Siemens spokesman was unwilling to comment on Lauvergeon's threat, citing the ongoing arbitration proceedings. Nevertheless, senior Siemens executives have also privately criticized their Finnish client, saying that TVO was partly at fault for the delays because the company took far too long to pass on the construction documents to regulatory authorities.
The accusations were all false, TVO board Chairman Timo Rajala shot back more than two weeks ago, saying that Areva first "sold the reactor and then began its detailed planning." According to Rajala, there are no longer normal business relations between the two companies. And the Finnish Radiation and Nuclear Safety Authority (STUK) has halted construction in Olkiluoto several times, citing the companies' failure to comply with its requirements.
3,000 Construction Mistakes To Date
The EPR, the first reactor in the so-called third generation, is the world's most modern nuclear machine, a hybrid of German and French reactor development. The EPR has an internal steel shell reinforced with concrete, which is designed to safely seal off the external concrete dome, as well as a ceramic basin underneath the reactor. All of these innovations are intended to absorb the intense heat generated in the event of a meltdown or other serious accident.
But hybrids are complicated things, which helps to explain the more than 3,000 mistakes that have occurred in construction to date. The most important unanswered question relates to "the senses, nerves and brain of the reactor," or the automatic control system in a nuclear power plant, says STUK director Petteri Tiippana.
In a letter of protest STUK General Director Jukka Laaksonen sent to Areva CEO Lauvergeon last December, he wrote that he could see no "real progress" in the "design of the control and protection systems," and complained that "evident design defects" are not being corrected. According to Laaksonen, the "attitude or lack of professional knowledge" of Areva representatives is obstructing progress. Unfortunately, Laaksonen wrote, his authority was still waiting for "a proper design that meets the basic principles of nuclear safety." According to Areva, the sharply worded letter is simply part of a normal dialogue over safety issues.
Tiippana, the STUK director overlooking the project, is a 37-year-old engineer with a shock of hair and frameless glasses. He says that the manufacturers still haven't produced an updated design. In mid-year, the British nuclear regulatory agency also found fault with the design of the control system. This leads experts to believe that Areva will not succeed in building an EPR in Great Britain within the next eight years.
Construction problems began to accumulate from the very beginning. A supplier had made mistakes in processing pipes that are used in the main cooling cycle and lead directly to the reactor, and the defects prevented the pipes from being tested with ultrasound. Areva had the pipes replaced. The next pipes could be tested, but then cracks were discovered on the surface.
The company that built the reactor foundation used a different type of concrete than had been specified. Although the material was easier to process, it was more porous and therefore required an additional seal. Welding defects were found in the steel used to reinforce the interior of the concrete shell. A Polish company cut holes in incorrect locations, which then had to be welded shut again. These deficiencies had no effect on reactor safety, says Tiippana, because they were all corrected.
Very few of the hundreds of subcontractors have any experience in reactor technology. Many go about their work as if they were quickly erecting a double garage somewhere. In one case, one of the subcontractors' workers summarily decided to install a tube for a sensor in a different location than planned, because they felt that the original location was too difficult to reach. The only problem is that the device was intended to take readings in precisely the location specified by the design engineers. "The employees have to know why they have to stick to the plans," says nuclear inspector Tiippana. "They have to understand the safety significance of their work, but it does not mean that every employee has to become a nuclear scientist."
The only problem with that approach is that it is difficult to make even the most basic assumptions, as evidenced by notes displayed at the construction site that read, in four languages, "Please do not relieve yourself in the building."
"This is not a model project but a model disaster," says Mycle Schneider, a German nuclear expert who lives in Paris and was a winner of the Alternative Nobel Prize.
Anti-Nuclear Movement Remains Quiet
Ironically, the conditions couldn't have been better. Finland's relatively small anti-nuclear movement is unlikely to get in the way of construction. The town of Eurajoki has 6,000 inhabitants and three nuclear reactors: Olkiluoto One, Two and Three. Mayor Harri Hiitiö is very enthusiastic about the reactors.
Hiitiö has traveled to Helsinki several times in recent months to attempt to convince the government to approve the construction of a fourth reactor in Olkiluoto. The town already collects €8 million in taxpayer funds each year, revenues that support eight local schools. Are there any protests?
"There were protests a while ago," says Hiitiö, "but the people weren't from here."
TVO is also considered to be one of the most reliable nuclear power plant operators worldwide, and its reactors are almost never shut down because of problems. But when TVO project manager Silvennoinen is asked what he would say to someone purchasing the Areva reactor who wants to avoid the same problems, he smiles and says: "Good luck."
Global Renaissance off to a Slow Start
The French state-owned company isn't the only one having trouble building new nuclear power plants. Last year, for the first time since the beginning of the nuclear age, not a single new reactor went into service worldwide. According to the World Nuclear Industry Status Report, 52 reactors are "under construction," although 13 of them have been under construction for more than 20 years now. And in the case of 24 reactors, it is not even clear when exactly they can be put online.
More importantly, 36 of the new reactors are to be built in China, India, Russia and South Korea rather than the safety conscious West. "It makes me dizzy to think that 16 power plants will be built at the same time in China, and that all you hear from China is that there are no problems," says nuclear critic Schneider.
Other than in Finland, only one other new nuclear reactor is currently under construction in the Western world. At the reactor construction site in Flamanville in Normandy, the French are experiencing problems similar to those in Finland.
In the United States, the administration of former President George W. Bush drastically lowered the bar for new plant construction, and in 2007 it earmarked more than $20 billion for loan guarantees. But the industry isn't interested. It hasn't started construction on a single new reactor in more than three decades.
"A number of US companies have looked with trepidation at the situation in Finland and the magnitude of investment there," says American economist Paul Joskow of the Massachusetts Institute of Technology.
In 2003, the US Congressional Budget Office assessed the risk that loan guarantees for the construction of new nuclear power plants could come due at "more than 50 percent." In 2007, six major investment banks wrote to the US Department of Energy that money for new construction could only be raised if the government guaranteed these loans "at 100 percent, and without conditions."
Extended Lifespans a Boon for Utilities
Electricity from nuclear sources has only been cheap in the past when old reactors were in operation for long periods of time and without complications -- and when governments addressed what remains an unresolved question in Germany: end storage facilities. The Berlin-based Eco Institute has calculated that an electric utility can earn from €800,000 to €2.2 million with an old nuclear reactor for each day the power plant continues to run after its scheduled decommissioning. If all German reactors remain up and running for another eight years, the utilities could collect up to €84 billion, depending on the price of electricity.
But is it really that easy to extend the life of a nuclear reactor? In the past, the industry defined 40 years as the technical life of a nuclear power plant. Following the nuclear phase-out announced by former Chancellor Gerhard Schröder's SPD-Green Party government in 2002, the 19 German reactors in operation at the time would remain connected to the grid for an average of only 32 years.
"There is zero experience with pressurized water reactors with lifetimes of more than 40 years," says nuclear expert Schneider. But Jürgen Grossmann, the CEO of German electricity utility RWE, believes that Germany's reactors could also last for 60 years. Similar ideas have been raised in the United States, Sweden and France, but strong reservations about the idea remain.
"We found it funny that the first time EDF began talking about extending the lifetime of reactors past 40 years was to financial analysts in London," says French nuclear regulatory agency chief André-Claude Lacoste. "It wouldn't be a bad thing for them to bring us a technical file on this."
At Areva, spokesman Christian Wilson claims: "Aside from the reactor vessel, one can actually replace and renew everything ... Technically speaking, 60 years are possible."
Even before Germany's recent election, Chancellor Angela Merkel made it clear to energy suppliers that she would only extend plant lives if the reactors were upgraded to satisfy the strictest safety standards. But that could cost billions at the Biblis or Krümmel reactors, which have both been shut down because of accidents, and perhaps would not even be worth it in the end. The major electric utilities are now focusing on the obvious: They are trying to delay, for as long as possible, the shutdown of very old power plants like Biblis and Neckarwestheim I, which are scheduled to be shut down within the next two years.
But can the nuclear sector be trusted to perform any modernization when it makes as many mistakes in new construction as it did in Finland? Not a single nuclear power plant has been built in the Western world for more than a decade. Nuclear regulators see the lack of know-how as a cause of the series of breakdowns. "Some supervisors lack experience," says engineer Tiippana. "Many companies are new to the nuclear sector, and their employees must be trained to comply with the standards."
The problem will only get worse. Forty percent of employees at US nuclear power plants are set to retire soon. The industry will have to find jobs for 26,000 new employees in the next 10 years -- even if it doesn't build a single new nuclear power plant. However, only 841 nuclear engineers completed their studies in the United States in 2008.
The situation is even more dramatic in Germany. Between 1998 and 2002, only two students graduated with an emphasis on nuclear engineering. This prompted Areva to set up a postgraduate course in nuclear engineering in Karlsruhe in February. The students are paid by Areva and are even guaranteed a job upon graduation.
Despite everything, Areva manager Mouroux still has a lot of faith in a reactor renaissance. The engineer is sitting in the conference room of a construction container, wearing a well-cut suit and paying little attention to doubts. "We will build the reactors all over the world," says Mouroux. What difference does it make if the machine becomes more expensive and the construction takes a little longer. "In return," says Mouroux, the EPR is supposed to operate for 60 years.