Writes the Economist (July 7, 2005) in The nuclear answer?: “As those carbon taxes rise to reflect more fully the environmental costs of fossil fuels, so nuclear and other non-carbon energies would become more financially appealing. Like any other form of power, nuclear ought then to be able to compete in the marketplace, without subsidies… To offer big subsidies to the nuclear industry may currently look green, but would be an admission of defeat… Putting a bet of billions on a single, risky solution would make no sense at all.

If this is the case, where does Finland stand? Is the new power plant being subsidized?

In the another article of the same issue of the Economists The shape of things to come, it reads: ”Nuclear fans point to Finland where a private consortium seems to have managed to finance a new power plant without government subsidy. But was it done without subsidies or unfair state aid?

Absolutely, insists TVO’s Mr Simola. “You must be joking,” retorts UBS’s Mr Gilles. In fact, the answer is unclear. TVO is a consortium involving six shareholders—but one of them is a state-owned utility, Fortum. TVO’s owners are also its only customers. Some of those customers are big paper and pulp companies, who use a lot of power; others are municipalities, which may not be sensitive to market economics. Indeed, the €3 billion deal is not a conventional commercial transaction. Mr Simola explains that there is a lifetime power-purchase contract agreed at zero profit: “We pay dividends in the form of competitive power,” he jokes.

The plant is to be built by France’s Areva on a fixed-price bid. If there are delays or massive cost overruns, Areva must cover them. Areva’s Mr Dureau vigorously denies that French government ownership means that that country’s taxpayers will be subsidising Finnish power: his firm will yield all its assets and go bust before the French taxpayer will pay a penny, he insists. But if it does go bust, the French taxpayer must write that cheque to TVO.


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