HELSINKI, January 8, 2015

Finnish nuclear consortium Teollisuuden Voima Oyj (TVO) said Thursday it’s planning to cut up to 110 jobs, around 13% of its work force, to lower annual costs by 15 million euros ($17.7 million).

The company said the cuts are needed to compensate for the negative impact caused by low electricity prices in the Nordics and by delays in the construction of TVO’s third nuclear reactor at its production site in Olkiluoto on Finland’s west coast.

“Electricity market price has dropped and there are no signs of improvement in the coming foreseeable future,” TVO’s Chief Executive Jarmo Tanhua said in a statement.

The planned job and cost cuts come even though TVO reported earlier this month that Olkiluoto power plant produced more electricity during 2014 than in any other year in its 35-year-long history. The two-unit plant achieved a combined load factor of 96.0%.

Mr. Tanhua said that costs related to nuclear power production have increased while delays in construction of TVO’s third reactor, dubbed Olkiluoto 3, have caused “remarkable additional costs.”

Olkiluoto 3 was originally slated to start operations in 2009, but it is now expected to come online in late 2018. The reactor is being jointly built by the French nuclear giant Areva SA and the German engineering group Siemens AG.

TVO, Areva and Siemens are now in the midst of an arbitration proceeding over the financial losses caused by the delays at Olkiluoto 3.

According to the latest updated figures disclosed by TVO in November 2014, TVO is seeking EUR2.3 billion in financial compensation from Areva-Siemens, while Areva-Siemens’s claim against TVO now stands at EUR 3.4 billion.

TVO currently employs 840 people. The company said that operational personnel at its power plants and personnel authorized by the Finnish nuclear safety authority STUK are excluded from the planned lay-offs.

Finnish power utility Fortum Oyj owns 26.6% of TVO, and the Finnish paper and pulp maker UPM-Kymmene Oyj holds a major shareholding in TVO via another power utility called Pohjolan Voima Oy.

Source: Dow Jones News