Fortum (FORTUM) Status Update summary

Strategic priorities and market outlook

• Nordic power demand is expected to double by 2050, driven by industrial decarbonization and robust customer demand.

• Customers prioritize stable, low-emission electricity, with some requiring 100% renewable sources and others focusing on predictability.

• The Nordic power system is increasingly weather-dependent, causing high price volatility and a need for flexible, firm power solutions.

• Wind and solar, supported by storage, will address near-term demand growth, while pumped hydro and nuclear are considered for long-term stability.

• Maintaining a balanced power mix supports supply security and system stability.

Feasibility study findings and investment preconditions

• New nuclear is not viable under the current merchant market model due to price volatility and lack of long-term visibility.

• Government risk-sharing mechanisms and long-term income visibility, such as state agreements or industry PPAs, are essential for project viability.

• Four main preconditions for investment: co-investors, customer demand, financing mechanisms, and project execution capabilities.

• Cost of capital and competitive risk-sharing frameworks significantly impact production costs.

• Long construction times, high capital needs, and post-commissioning market prices are key risks.

Technology and project development approach

• Large reactors are mature and suitable for grid supply; SMRs offer flexibility for industrial and district heating applications.

• Three technologies selected for further collaboration: Westinghouse AP1000, EDF EPR, and GE Hitachi BWRX-300 SMR.

• Emphasis on proven technologies, minimizing country-specific changes, and leveraging existing competencies to ensure project success.

• Building multiple reactors enhances economic viability through shared costs and learnings.

• Site development is progressing, with a potential new site near Loviisa and ongoing screening in Sweden.