AFRY’s nuclear energy report shows that supporting investments in nuclear power plants is profitable

AFRY Management Consulting Oy’s report on the alternatives, costs, and electricity market impacts of promoting nuclear energy production shows that supporting investments in large, traditional electricity-generating nuclear power plants is profitable. https://afry.com/fi-fi/uutiset/uutinen/afryn-selvitys-tarkastelee-ydinenergian-tuotannon-edistamisen-vaihtoehtoja-ja

AFRY examined three electricity-demand scenarios:

1. Baseline scenario, where electricity demand in 2040 is 120 TWh, up from the current 83 TWh.
2. High electrification, where electricity demand in 2040 is 160 TWh.
3. Low electrification, where only essential processes are electrified and electricity consumption rises to about 110 TWh by 2040.

Achieving the low-electrification scenario would require an around-the-clock increase in consumption of approximately 3,100 MW compared to the current situation. On the other hand, this would mean commissioning roughly ten data centers, assuming each is on the same scale as the Nebius data center announced for Lappeenranta on 31 March 2026. The capacity of this data center is 310 MW. In Finland, around 50 data center projects are currently in progress or have already been announced, of which 10–15 large data centers are forecast to be completed by the end of the decade. Assuming existing electricity consumption sites remain unchanged, the data center projects already in the pipeline alone would reach the level of the low-electrification scenario ten years ahead of schedule. It is therefore highly likely that, in terms of electrification, we are already at least somewhere between the baseline and high-electrification scenarios.

The report was commissioned by the Ministry of Economic Affairs and Employment (MEAE) to examine the options for and impacts of additional nuclear energy construction. Hopefully, decision-makers do not assume, believe, or at least aim for Finland to proceed under the low-electrification scenario, because that would also mean continuing along Finland’s current stagnating economic path, where the structures of the welfare state must be continually scaled back. Finland needs steadily produced domestic energy so that it is also profitable for industry to invest here and to refine clean electricity into higher-value products for export.

According to the report, building new nuclear power has a negative impact on the construction of onshore wind power in all scenarios. The reason given is that building nuclear power lowers the price of electricity. At the same time, it is also stated that:

“Increasing shares of weather-dependent renewable generation, the gradual withdrawal of existing thermal power capacity from the market, and rising demand highlight the need for flexible baseload generation, especially during long, cold, windless periods.”

In a system based on weather-dependent generation, electricity generation capacity must be built twice over. If society is to remain functional even when weather-dependent generation capacity is not producing electricity—as has been seen during the past winter as well—we must have parallel capacity that produces the required electricity, imports it from abroad, provides demand-side flexibility, or uses stored energy. Nuclear-generated electricity forms the backbone of the power system: it carries the system, provides the inertia it needs in changing situations, and supports security of supply. Building additional nuclear power rather strengthens that backbone, creating the opportunity to add more weather-dependent generation to the system.

According to the report, in the baseline scenario, support for building conventional nuclear power plants would have a net impact of a loss of EUR 39 million per year. In the high-electrification scenario, the net impact of the support is already EUR 881 million per year positive. Support for conventional nuclear power thus appears to become economically beneficial—under AFRY’s analytical assumptions—when electrification is somewhat stronger than in the baseline scenario. This analysis takes into account the benefit electricity users receive in the form of lower electricity prices, and on the other hand the cost of providing the support. The analysis does not account for the benefit to society through the investments and production that additional nuclear construction would enable—and what it would therefore generate for society—which would improve the outcome of the support analysis further.

Given that we already appear to be at least at the baseline level of electrification—based solely on the data center projects estimated for the coming years—the study seems to indicate that supporting the construction of new nuclear power is worthwhile from society’s perspective.

According to AFRY, one factor related to cost uncertainty is that conventional nuclear power plants are extremely large and complex projects subject to strict regulation. Finland is currently undertaking a comprehensive reform of the Nuclear Energy Act and related regulation, easing regulatory rigidity without compromising the level of safety. The new Nuclear Energy Act allows certain licensing processes to be carried out in parallel rather than sequentially. Draft regulations by the Radiation and Nuclear Safety Authority (STUK) that are out for consultation appear to allow different ways of demonstrating that an adequate level of safety has been achieved, rather than requiring a single rigid approach. The risks associated with delivering complex projects are reduced by using experienced experts.

Overall, building and operating nuclear power is a long-term undertaking; the industry likes to say that our “quarter” is 25 years. In that respect, nuclear power compares well to forestry, where the saying goes that the best time to plant a tree was 20 years ago and the second-best time is today. For Finland’s nuclear power, the best time to invest was 50 years ago, when investments were made in the Loviisa and Olkiluoto plants; the second-best time was 20 years ago, around the time of the investment decision for Olkiluoto 3; and the third-best time is today.