REFILE-UPDATE 2-Finland's Fennovoima says may downsize reactor project

Mon Feb 25, 2013 6:27am EST

* Toshiba sole candidate for large reactor

* Areva, Rosatom, Toshiba candidates for mid-sized reactor

* Fennovoima aims to decide supplier this year

By Terhi Kinnunen

HELSINKI, Feb 25 (Reuters) - Finland's Fennovoima on Monday selected Toshiba as sole candidate to build a large nuclear reactor but left the door open to other bidders in the event the nuclear consortium decide on a smaller unit instead.

Fennovoima chose Japan's Toshiba as supplier if it goes ahead with original plans for a large, 1,600-megawatt reactor, dropping rival candidate Areva.

But the departure of investor E.ON in October has sparked some doubt about funding the large reactor, and Fennovoima said it was considering building a medium-sized reactor instead and viewed Toshiba, Areva and Russia's Rosatom as possible suppliers.

Fennovoima Chief Executive Juha Nurmi said the consortium aimed to make a decision this year, in line with a previous schedule.

The Pyhajoki reactor is estimated to cost 4-6 billion euros ($5.3-7.9 billion) and was the first announced after Japan's Fukushima disaster in March, 2011.

It was originally aimed at providing cheap energy to shareholders including E.ON, stainless steel maker Outokumpu , retailer Kesko and subsidiaries of Swedish metals firm Boliden.

E.ON in October announced it was exiting all operations in Finland to raise funds and cut debt.

Fennovoima's other investors, including around 60 Finnish companies, have said they would take on E.ON's 34 percent stake.

Analysts have said they would have a hard time managing the project without E.ON's nuclear expertise and financial backing.

"It is an undisputable fact that they have a hole in their financing," Inderes chief analyst Juha Kinnunen said, noting the medium-sized reactor may therefore be more suitable.

"Considering the current situation in the industry, it seems unlikely that they would be willing to invest a lot more in the project."

Fennovoima said the shareholders wanted to "ensure the realisation of the project."

Nurmi declined to elaborate on why it dropped Areva's offer to build a larger reactor but said price was an important factor.

Areva is also involved in Finland's Olkiluoto 3 reactor owned by Teollisuuden Voima (TVO) where TVO and a consortium of Areva and Siemens have traded blame over repeated delays and soaring costs.

Nurmi denied that he was influenced by Areva's problems at Olkiluoto, but added: "Of course we follow what is happening elsewhere".

A couple walks along the rough surf during sunset at Oahu's North Shore, December 26, 2013. REUTERS/Kevin Lamarque

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