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Fortum’s/NPP Loviisa Experience in Nuclear and Renewables Elizaveta Vainonen Contributors: S. Savolainen, P. Fast, A. Kaikkonen

Content • Defining the boundary conditions • Some remarks on energy mix • Loviisa NPP and modernization program • Radwaste • Conclusion

Some definitions • Sustainable

– Economically profitable – Safe – Possessing considerably more advantages than drawbacks from society point of

view • Renewables = subsidized, i.e. wind, sun, wave power etc

– Attn! Within the scope of this presentation hydropower is considered as traditional electricity generation, i.e. not renewable

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Electricity generation by source in Finland in 2015

33,7 %

7,6 %

8,3 %

0,3 %

25,1 %

3,5 %

4,1 %

16,2 %

1,2 %

Nuclear Natural gas Coal Oil Hydro Wind Peat Bio Waste

• The share of hydropower and fossil fuels (mainly coal) in electricity generation varies according to the amount of hydropower available on the Nordic market from Norway and Sweden.

• ~120 companies producing electricity, ~400 PP, ≥ 200 of which are hydroelectric PP

• Diverse and distributed structure of electricity generation -> the security of electricity supply

• ~1/3 of electricity is produced in combined heat and power ~90% of the energy of the fuel can be converted into electricity and heat.

• Finland is a part of the joint Nordic electricity market in which free competition prevails.

3 Source: Finnish Energy

E. Vainonen 4

Loviisa NPP (Fortum) 2 operating units – VVERs Interim Spent Fuel Storage at site L/ILLW repository

Fennovoima Ltd New utility, no operating reactors DiP approved for FA1, Hanhikivi Site

Photo: TVO

Photo: Fortum

Olkiluoto NPP (TVO) 2 operating units - ABB BWRs OL3 (EPR) under construction DiP approved for OL4 Interim Spent Fuel Storage at site L/ILLW repository Posiva “Onkalo”

NPPs in Finland

Fortum worldwide

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Expert services globally

Nordic countries • Power generation capacity

8,484 MW (+ Fortum Värme* 639 MW)

• Heat production capacity 1,974 MW (+ Fortum Värme* 3,891 MW)

• Electricity sales customers 1.3 million

India Power generation capacity 15 MW

Baltic countries • Power generation capacity

93 MW • Heat production capacity

812 MW

Poland • Power generation capacity

197 MW • Heat production capacity

1,129 MW

Russia • Power generation capacity

4,903 MW • Heat production capacity

12,696 MW

Figures: 2015 *Joint venture AB Fortum Värme samägt med Stockholms Stad

Fortum's power and heat production by source

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Natural gas 31%

Hydro power 32%

Coal 4% Biomass 2%

Total generation 77.1 TWh (Generation capacity 14,331 MW)

Nuclear power 30%

Fortum's power generation in 2015

Waste 1%

Total production 39.7 TWh (Production capacity 20,502 MW)

Fortum's heat production in 2015

Peat 1%

Waste 7%

Heat pumps, electricity 7%

Oil 1%

Biomass 8%

Natural gas 61%

Coal 15%

Incl. Fortum’s associated company Fortum Värme; power generation 1.2 TWh (capacity 639 MW) and heat production 7.5 TWh (capacity 3,891 MW).

Generation

• Nuclear power (own license and co-owned) • Hydropower • Thermal power • Engineering • R&D

• Nuclear Safety Oversight

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Fortum’s nuclear power capacity per plant

Loviisa Two units 2 × 496 MW = 992 MW Fortum’s ownership 100%

Olkiluoto Two units, third under construction 880 + 880 MW = 1,760 MW Under construction 1,600 MW Fortum’s share: 27% (468 MW)

Oskarshamn Three units 473 + 638 + 1,400 = 2,511 MW Fortum’s share: 43% (1,089 MW)

Forsmark Three units 984 + 1,120 + 1,170 = 3,274 MW Fortum’s share: 22% (720 MW)

Remarks on nuclear in energy mix • Advantages of nuclear

– Emission free energy production – Predictability and stability

• Challenges of nuclear

– Production is not very flexible – Cost competitiveness vs current power prices – Demanding long-term construction projects

• Regardless of challenges nuclear will endure

– Building of new NPPs is under consideration in about 40 countries. Decision to phase out production by nuclear has been made in 3 countries *

– According to recent forecast nuclear production will double by 2040**

*IEA World Energy Outlook 2015. Decision to terminate nuclear has been made in Germany, Belgium, Switzerland

**United States Department of Energy, Energy Information Administration, International Energy Outlook, May 2016

Current electricity prices on Nordic market discourage investments in any form of electricity generation

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NOTE: The presented figures are calculated based on data from recent public reports and do not represent Fortum’s view. Average achieved price (€/MWh) for the production type depends on availability and flexibility. There are large variations in the cost of hydro, wind and solar depending on location and conditions.

0102030405060708090

100110

Source: Nord Pool, Nasdaq Commodities

EUR/MWh

Futures 2 May 2016

1995 2015 2026

Commodity prices are forward prices as of September 2015, extended with inflation

EUR/MWh

Average levelised costs of new electricity generation

Solar PV In Spain

Coal condensing

Gas Onshore wind

Nuclear Large hydro

Offshore wind

Source: Fortum investor presentation, May 2016

Political decisions also cause challenges for traditional forms of electricity generation

• Subsidy-based renewable electricity generation has been a reason behind collapse of wholesale electricity market price

• Various national CO2- and renewables subsidy policies diminish the efficiency of EU emission trading scheme

• Some national taxation decisions distort competition between different forms of electricity generation

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Loviisa NPP • Fortum Power and Heat Oy • Commissioning

– Loviisa 1 in February 1977 ‒ Loviisa 2 in March 1980

• 2 x VVER-440, 976 MW (2 x 488 MW). Ice-condenser containments have been included

• Licensed until ‒ Loviisa 1 the year 2027 ‒ Loviisa 2 the year 2030

• Gross (net) electrical capacity – 2 x 520 (496) MW

• Electricity generation 8.47 TWh (2015), i.e. about 13% of electricity produced in Finland

• Load factor 92.9% (2015) • Personnel 1.01.2016 ~502 (LO), 176 (NECON),

~100 permanent contractors 12 E. Vainonen

LOMO2 program: background

Main results of TEHO2 preliminary studies • As a result of the Fukushima accident, an extensive project for improving

safety will be carried out

• A comprehensive investment program will be needed to ensure the licensed operating life till 50 years

• A remarkable increase in the annual production will be reached by the process optimization of the secondary circuit system

• The spare parts for the critical components of the reactor island will guarantee both independence from the suppliers, and reliable and safe operation

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LOMO2: goals • To guarantee continuous improvement of the NPP safety

• To optimize investments to exceed the remaining operating life of the

NPP nuclear – To increase the gross efficiency of the turbine island to at least 536 MW (2x268) – To decrease the NPP’s internal load as much as possible

• To ensure reliable production of the NPP for the remaining operating life

• To ensure excellent operability of the NPP

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LOMO2: initial scope • Based on the final result and conclusion of the TEHO2 preliminary

project

• The program is divided into three sub-programs – "TUPA” – Program to improve safety – "SEPA" – Program to make fundamental improvements and increase

the efficiency of the turbine island – "REPA" – Program to make fundamental improvements at the reactor

island

• TUPA covers ca. 20% of the total cost • SEPA covers ca. 60 % • REPA covers ca. 20 %

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LOMO2 program: schedule

• Goal: implementation between 2013 – 2020

• TUPA implementations can be executed out of the annual outages, started in 2014 (e.g. cooling towers)

• SEPA implementations are the most critical in respect of NPP reliability (first installations started 2013)

• REPA projects mainly aim to ensure reliability with the help of spare part procurement (started in 2014)

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LOMO2: sub-program TUPA (some projects as planned)

• Heat sinks independent of sea water, cooling towers 1) • Protecting operation locations from radiation 2) • Flooding system of reactor pit 3)

• Improvements related to spent fuel pools 4)

• Improvement of flood protection 4) • Improvement of electric systems (will be done as line work) 1) • Mobile pumps and electricity sources 3) • Improvements in storage and operability

of diesel fuel 1) • Securing of transport connections 2) • Renewal of the reactor building ventilation 1)

1 )Ready

2) Terminated

3) Pre-engineering

4) On-going

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LOMO2: sub-program SEPA (some projects as planned)

• Modernization of HP turbines 4) and LP turbines 2) • Renewal of the HP turbines extraction valves 1)

• New rotors of generators 4) • Renewal of generator switches 4) • Renewal of moisture separators and re-heaters, MSR 4) • Renewal of low pressure preheaters 3) • Renewal of main transformers 4) • Sea water pumps 2) and feed water pumps 3) • Motors of condensate pumps 1) • Condensate extraction pumps 2) • Modernization of condensate purification plant 3) and increase of pH level of the secondary condensate 3) • Renewal of SMO condensers (decision 2015-16) 3)

1 )Ready

2) Terminated

3) Pre-engineering

4) On-going

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LOMO2: sub-program REPA (some projects as planned)

Spare parts procurement: • Primary circulation pumps (PCP) 4)

• Intermediate rods for control rod drive mechanism (CRDM) 4)

• Motors for CRDM 2)

• Replacement of primary side valves, creating readiness 3)

• Replacement of steam generator insulation 3)

Creating readiness for repair (planning): • Pressurizer heaters and their installation 3) • Repair of the thermal sleeves of the pressurizer surge line 3) • Threads repair of PCP casings 3) • Repair of the CRDM penetrations of the RPV head 3) 1 ) Ready

2) Terminated

3) Pre-engineering

4) On-going

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LOMO2: method of implementation PROGRAM (LOMO2)

• An overall program which is updated when needed • Each project is approved separately by the portfolio management team • Collects and coordinates sub-programs, and strives for achieving the overall goals • Fits together the goals of LOMO2 and other large projects • The program has own steering group

EACH SUB-PROGRAM (TUPA, SEPA, REPA) • A plan with more details, combining modifications from various areas • Collects, coordinates and manages implementation of the projects belonging to a sub-

program and aims for overall optimization • Reports to LOMO2

PROJECTS • Are planned and implemented according to the LABC model as a part of a sub-program • Report to the sub-program according to the LABC model

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LOMO2: implementation diagram, planning stage

LOMO - 2 Program

S Savolainen / S Merisaari

Economic Profitability

Purchasin

NCC/TS - support

Safety improvement "TUPA"

T Hiltunen / M Harti

TI - upgrading "SEPA"

A Vaittinen / M Vaananen

NI - upgrading "REPA" NN / NN

Project TUPA1,.... TUPAnn

Project SEPA1.... SEPAnn

Project REPA1... REPAnn

Steering group

Licensing

Techn.

Analyses

O&M, scheduling Loviisa NPP support

Consultant support

Project management

Techn. support

QA

LOMO2 program

Economics/ profitability

Procurement

NECON support

Safety improvement

"TUPA"

Modifications of turbine island “SEPA"

Modifications of reactor island "REPA"

Project TUPA1... . TUPAnn

Project SEPA1.... SEPAnn

Project REPA1... REPAnn

Steering group

Licensing

Technical support

Analyses

Operations, maintenance, schedule planning

LO support

External support

Project management

Technical support

QA

Communication

• During the planning stage, the program/sub- program is responsible for managing the wholeness

• Taking advantage of synergy within Fortum

• Methods of LOMO2 program have been described in the program manual

Portfolio management team

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LOMO2: implementation diagram, implementation stage

Portfolio management team

Coordination Groups TUPA

1..nn ( incl.TUPA

Coordination Groups REPA

1...nn

SEPA projects 1..nn

TUPA projects 1..nn

REPA projects 1..nn

Project support functions (NCC, external consultants etc.)

Program support (steering group,

communications etc.)

Steering groups for SEPA projects SEPA manager as a member of steering group

Steering groups for TUPA projects TUPA manager as a member of steering group

Steering groups for REPA projects REPA manager as a member of steering group

Nuclear and Thermal Power

LOM

O2

prog

ram

• Demands of the interest groups are taken into consideration in the inspections already before the call for bids

• During implementation the program aims for supporting the implementation of the projects

• As the conditions change, the program/sub-program carries the overall management responsibility

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Program management – risks

Potential risk Risk management Availability and accuracy of the initial data and design basis of components and systems

Measurements, calculations of present system, obligation for the supplier to use data from a corresponding target

Availability of resources Turnkey delivery, use of consultants in suitable / certain tasks, versatility

Modification of schedule Storage alternatives Replacement of main components simultaneously with automation renewal

As little alterations as possible. Installation options independent of LARP. Local measurements.

Budget Risk management at each stage as early as possible

Quality / delivery control Agreement upon a quality control program before signing a contract, audits, credit status inquiry, delivery control

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LOMO2: summary • Optimization of overall profitability exceeding the operation life of the

NPP

• Study of alternative ways of implementation

• Transfer of tacit knowledge to new generation

• Improvement of NPP’s configuration management as a part of power plant life management

• Max electric power 536 – 560 MW depending on the scope of the implementation

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Nuclear fuel’s lifecycle

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Spent fuel is removed from the reactor

Interim storage in water pools for at least 20 years

Encapsulated and disposed of in a final repository at a depth of 500 m

LOVIISA NPP POSIVA, Olkiluoto

What happens to spent nuclear fuel?

Transportation

Storage of Loviisa NPP’s low- and intermediate-level waste

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Interim storage of high-level waste at Loviisa NPP

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Final disposal of spent nuclear fuel in Posiva (Olkiluoto)

Encapsulation Plant

Disposal area

Deep repository

Source:

Instead of conclusion

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• EU environment and energy policies should support emission-free

production incl nuclear. Emission trading should be enhanced

• Subsidies of renewables, overlapping with emission trading and twisting the market, should be abandoned.

• Nuclear segment should renew

– Standardized NPP concepts, equipment, spare parts – Harmonized licensing – Better utilization of good practices

Thank you for your attention! @Fortum (Corporate, English) @Fortum_Oyj (Finnish) @Fortum_Swedish (Swedish)