By Jussi Rosendahl and Tuomas Forsell
HELSINKI (Reuters) - The start of regular power production at Finland's biggest nuclear reactor Olkiluoto 3 will be pushed back another five months to May 2019, owner Teollisuuden Voima (TVO) said on Monday, the latest in a decade of delays.
The project in western Finland, built by a consortium led by French state-owned nuclear group Areva, has been hit by repeated delays, soaring costs and court disputes.
Originally planned to start in 2009, its most recent target for regular power production had been the end of 2018.
TVO said many important tests at the plant were yet to be carried out and Areva needed to allocate the necessary resources to the project.
"We are very disappointed by this additional delay. There is still substantial work to be accomplished in the project," TVO project director Jouni Silvennoinen said.
An Areva spokesman said the reactor would produce its first power at the end of 2018, but the ramp-up to full production would delay the commercial start-up to May 2019.
He said hot-testing would start in December 2017, nuclear fuel would be loaded in August 2018, first grid connection would be in December 2018 and the commercial start would be May 2019.
Last month, TVO filed an appeal to the European Commission over France's restructuring of its nuclear industry, saying Areva, which is selling its nuclear reactor business to utility EDF (PA:EDF), could be unable to meet its liabilities in Finland.
POWER PRICE IMPACT
The parties are locked in a dispute over the delays at the International Chamber of Commerce, where TVO is claiming 2.6 billion euros from the Areva-led consortium, which has filed a counter-claim of 3.6 billion euros. Areva has a 73 percent stake in the consortium and Germany's Siemens 27 percent (DE:SIEGn).
The final ruling is expected early next year, and TVO last year said it was optimistic following favorable partial awards.
The cost of Olkiluoto 3 was initially put at 3.2 billion euros but Areva in 2012 estimated the overall cost at closer to 8.5 billion euros. Since then, it has not updated its cost projection.
EDF on Monday confirmed a 10.5 billion euro cost estimate for a similar European Pressurised Reactor (EPR) it is building in Flamanville, France, which has also suffered delays and cost overruns.
Olkiluoto 3 is set to become Finland's fifth and largest nuclear reactor and provide about 10 percent of the country's power needs.
Delays at the plant have translated to additional annual costs of hundreds of millions of euros for Finnish consumers via higher electricity prices, said Enegia Portfolio Services analyst Markus Herranen.
"This news (delay) was somewhat expected, the uncertainty around the project is already visible in the market."
He said Finland's electricity price premium to the Nordic system price for 2019 had climbed to around 5.5 euros from about 3.7 euros per megawatt hour in the last few months.
TVO's owners include Finnish paper companies UPM (HE:UPM) and Stora Enso (HE:STERV) as well as utility Fortum (HE:FORTUM).