Corporate Social Responsibility 2011

Transcription

1 A period of major projects Corporate Social Responsibility 2011 Teollisuuden Voima Oyj - Well-being with nuclear electricity

2 2 TO THE READER TVO IN A NUTSHELL The objective of TVO s corporate social responsibility is to promote Finnish well-being by providing climate-friendly, reasonably priced electricity in a safe and reliable manner. TVO has been generating electricity at Olkiluoto for more than 33 years. Our Corporate Social Responsibility Report will shed light on how corporate social responsibility is included in our responsible operations every day. The report has been prepared according to the Global Reporting Initiative (GRI) guidelines. Pages contain a table showing the GRI indicators. In planning the content of the report, we have also relied on analyses regarding the subjects and themes of most interest to our stakeholder groups as well as on the results of the survey on the most important social responsibility issues, which was carried out by TVO s Corporate Social Responsibility Team among the company s management. The relevance matrix prepared on the basis of these results is shown on pages We have established four themes on the issues of most interest to our stakeholder groups: safety, the environment, uranium from bedrock to bedrock and year 2011 at TVO. Through these themes, we want to tell you about the related systematic work and competence development taking place at Olkiluoto. Nuclear power-related issues are often wide-ranging and complex. We have tried to make the text more readable by using interviews with experts to explain various subjects. The interviews are supplemented by fact boxes and tables, as well as by TVO s website. Further information on responsibility and TVO s operations in 2011 is available on the company s website at as well as in other annual reports published by the company, also available on the website. The reports are also available at TVO s Visitor Centre in Olkiluoto. TVO publishes its Corporate Social Responsibility Report in Finnish and English. DNV Certification Oy/Ab, an independent and impartial accredited certification body, has certified and verified that our Corporate Social Responsibility Report meets the requirements set out in the Global Reporting Initiative (GRI) G3 guidelines. The certification report is on page 78. The figures for 2010 are presented in brackets. Our financial reports were audited by Eero Suomela, APA, and Pricewaterhouse- Coopers Oy, a firm of Authorized Public Accountants, while our Environmental Report was audited by DNV Certification Oy/Ab. Registered office Plant units in operation Plant unit under construction Plant unit in the design stage Holding of the Meri-Pori coal power plant (%) Olkiluoto wind power plant Total amount of electricity supplied to owners (GWh) - OL1 (GWh) - OL2 (GWh) - Meri-Pori (GWh) * Includes 1.9 (1.1) GWh of wind power and 0.3 (0.4) GWh of gas turbine power Share of supplied electricity of total consumption of electricity in Finland (%) Overall capacity factors (%) - OL1 (%) - OL2 (%) Turnover (MEUR) Investments (MEUR) R&D expenses (MEUR) Non-current and current liabilities* (MEUR) * excluding VYR Equity ratio (%) Average number of employees during 2011 TVO s owners and their holdings (%) EPV Energia Oy Fortum Power and Heat Oy Karhu Voima Oy Kemira Oyj Oy Mankala Ab Pohjolan Voima Oy Helsinki Olkiluoto 1 (OL1) and Olkiluoto 2 (OL2) Olkiluoto 3 (OL3) Olkiluoto 4 (OL4) 45 14,944* 7,253 6, ,

3 04 TVO FROM THE OWNER S PERSPECTIVE REVIEW BY THE CEO OPERATING ENVIRONMENT RELEVANCE MATRIX 3 16 SAFETY 32 URANIUM FROM BEDROCK TO BEDROCK 42 THE ENVIRONMENT 54 year 2011 AT TVO 74 GRI INDICATOR TABLE 77 REPORTING PRINCIPLES AND CONTENTS OF THE REPORT 78 VERIFICATION STATEMENT 79 CONTACT DETAILS AND FURTHER INFORMATION Teollisuuden Voima Oyj (TVO) generates nuclear electricity at Olkiluoto, Eurajoki. TVO uses two plant units, is in the process of constructing a third unit, and has initiated the bidding and engineering phase for a fourth unit. TVO produces approximately one-sixth of the total electricity consumed in Finland. The company employs over 800 nuclear professionals at Olkiluoto, Eurajoki, and in Helsinki.

4 4 TVO FROM THE OWNER S PERSPECTIVE LAURI VIRKKUNEN, president and CEO OF PVO, CHAIRMAN OF THE BOARD OF TVO GOOD AVAILABILITY, SAFETY, AND TRUST GO HAND IN HAND Society needs TVO and TVO needs society. The nuclear electricity generated at Olkiluoto is a competitive and safe form of energy that upholds Finland s national competitiveness. On the other hand, society defines and Nuclear power requires trust Virkkunen says that nuclear power generation is very much a trust business. The trust of various stakeholder groups is vital to TVO s operations. In addition to the trust of the owners, the general public, the media, decisionmakers and partners have to also trust sponsibility for improving safety. A strong culture of continuous improvement has been created at Olkiluoto. The modernization projects and investments made in connection with annual maintenance outages are prime examples of that. Only safe plants are productive A strong culture of continuous improvement has been created at Olkiluoto. Virkkunen thinks that the Mankala principle has been the factor enabling enables TVO s operations. We live in a state of good symbiosis, says Lauri Virkkunen, Chairman of the Board of TVO. TVO. Successful operations over previous decades have built up a capital of trust. This is evidenced by, for example, the decisions-in-principle regarding the OL3 and OL4 plant units. The stable political environment in The owners want the plants to operate steadily, producing as much electricity as possible. Good availability is the key when the plant is a so-called base load plant that generates electricity continuously, 24 hours a day, Virkkunen explains. TVO s entire operations and growth into a significant Finnish producer of electricity, and into an internationally recognized pioneer and benchmark regarding nuclear power. TVO and the Olkiluoto NPP could not Nationally, Finland has few energy Finland provides an excellent basis for In a nuclear power plant (NPP), safety have been established without an operat- resources, only wood, peat, and some the further development of TVO. The and availability go strictly hand in hand, ing model in which the owners combine hydroelectric power. The price of elec- view shared throughout our society because only a safe plant can be operated. their resources to build up a large-scale tricity is a significant factor affecting the that nuclear power is part of the energy The capacity factors of Olkiluoto NPP, production facility. It would have been competitiveness of industry, operating far generation policy in Finland supports the consistently rated top-class in international difficult for TVO to cope with the major away from its main markets. To keep the company in its continuous development comparison, demonstrate that the person- investments of its early years without the wheels turning, we need a reasonably of operations. nel know how to operate the plant units strong support of its owners. priced and stable basic energy supply, Throughout its history of more while also maintaining a high standard of The Mankala model has been as- and that is what is produced at Olkiluoto. than 40 years, TVO has borne its re- safety culture. sessed on many occasions over the years

5 TVO FROM THE OWNER S PERSPECTIVE 5 and always found to be compliant with legislation and established practices. With the support of its owners, TVO has developed into a world-class nuclear power company that creates extensive wellbeing for society through the electricity it generates. Dialog is the way forward Having been the Chairman of the Board of TVO in 2011, Virkkunen describes the work in the board room at TVO as involving plenty of discussion as well as versatile and interesting. Naturally, the Board does not interfere with day-to-day management but rather spars with, challenges, and supports the CEO. We convened 16 times in The Board of Directors is responsible for seeing to it that the executive management establishes appropriate safety systems and ensures their functionality and quality. The Board has plenty of energy industry expertise, and we can also rely on the help of experts employed by the owner companies when required. The Fukushima accident and reports submitted to the Radiation and Nuclear Safety Authority in Finland (STUK) were reflected in the work of the Board last year. TVO is also engaged in a continuous dialog with public authorities regarding the development of its operations. The necessary areas for development will also be eventually discussed by the Board as investment proposals. Growth is a major challenge TVO is experiencing the strongest growth phase in its history. When completed, the OL3 plant unit currently under construction will double the electricity production of the Olkiluoto power plant. The planned OL4 unit will increase production by the same amount. In addition, the work of expanding the interim storage for spent fuel, also a major project, is progressing on the island. It is obvious that such extensive growth will pose challenges. It is fundamentally important that the company is developed and expanded by maintaining the current strong culture of safety and good availability of the plant units, which has been characteristic of the OL1 and OL2 plant units. According to Virkkunen, another factor adding to these challenges is the fact that many Finnish pioneers of nuclear power are about to retire from TVO after many decades of service. Transferring their knowledge and skills to the younger generation is of primary importance. The major projects that lie ahead, such as the commissioning of OL3 and the construction of OL4, will mainly be TVO is experiencing the strongest growth phase in its history. the responsibility of younger experts. Growth requires financial resources and excellent expertise and its maintenance. For its part, the Board is responsible for ensuring the availability of sufficient resources. Olkiluoto has excellent prerequisites for building for the future. I am confident that TVO will cope with the challenges that lie ahead. Nuclear safety is the biggest and most important issue that lies at the core of the corporate social responsibility of a nuclear power company. Matters related to safety are discussed in every single Board meeting. Corporate social responsibility and its different elements are also in other ways on the Board s agenda as the Board is responsible for ensuring that TVO s capabilities for producing nuclear energy are maintained. Active dialog with our stakeholder groups is an important part of this work, Virkkunen points out. Lauri Virkkunen

6 6 REVIEW BY THE CEO SAFE PRODUCTION, ACTIVE DIALOG Last year, there was considerable public debate in Finland about the economy, economic growth, and its necessity. The well-being of all citizens is the common objective. There is also a wide consensus that sustainable economic growth is necessary for maintaining welfare. Economic growth is created by work and industrial production. This, in turn, requires energy particularly electricity. TVO is part of this Finnish welfare chain, and therefore our corporate social responsibility promise is Well-being with nuclear electricity. Last year, our two NPP units produced approximately one-sixth of the total electricity consumed in Finland. The Olkiluoto power plant turned out a good production result. The total production amounted to 14.2 billion kilowatt-hours. We fell a couple of percentage points short of our target when the repair work carried out during the annual maintenance outages of both plant units took longer than expected. The overall capacity factor of the plant units was 92.8 (93.5) per cent, a very good result by international comparison. The plant units have already been generating electricity for more than 33 years, but modernization work and investments to safety have ensured that the plant units are perhaps now in better shape than when they were first completed. Of course, signs of ageing are detected from time to time. We aim to take a sustained and optimized approach towards controlling the ageing phenomena through preventive maintenance and modernization. On the other hand, I believe that the units have now established themselves, and I look forward to their best years of productivity still to come. The net electrical output of both plant units is now 880 MW, 20 MW more than two years ago. Progress in projects Although the OL3 plant unit is behind its original schedule, many clearly visible steps forward were taken during the past year. The construction work and main component installation work for OL3 have, by and large, been completed. Almost all concrete casting work was completed by the end of last year. The installation work at the turbine plant was nearing its completion, and the project as a whole progressed to a preparatory phase for commissioning. There were about 3,200 persons working on the site at the end of the year, and the occupational safety record was good throughout the year. The plant supplier expects the plant unit to be ready for the production of electricity in August The Olkiluoto 4 project advanced to the bidding and engineering phase, and all the current owners announced their commitment to this phase of the project. The documentation for the invitation to bidding was finalized during the year, and the project was organized into a separate Jarmo Tanhua

7 REVIEW BY THE CEO 7 department whose organization was reinforced. Further recruitment will take occurred last year in Fukushima, Japan. In this report, we will explain how safety but we did perform quite well. The work towards this target continues. Active interaction continued place in the coming years. is being guaranteed at the Olkiluoto NPP. The earthquake and resulting tsunami Our objective is to improve mutual trust Safety is not just about equipment and that led to the serious nuclear accident with our stakeholder groups and to sup- Safety is the key element of our corporate social responsibility technology but, above all, about the competence and attitude of personnel and the safety culture we observe in Japan affected us in many ways. It is obligatory in our nuclear power business and safety culture that we followed, studied, and port open and constructive interaction in our neighboring areas, Finnish society, and in our industry globally. Our mission is to produce electricity throughout the company. analyzed the event, carried out investiga- There were many occasions for inter- for the needs of Finnish society, safely, tions and made decisions on what we could action during the year, with the meetings economically, and in an environmentally friendly manner. We work diligently every Ensuring competence is the key learn from the event and how we could further improve our plants and procedures. with residents of the neighboring regions being perhaps the most important. day to be worthy of those targets. For us, ensuring the competence of our Issues related to safety and the disposal The safety of production is part of our corporate responsibility towards the local personnel and responding to the challenges of a growing company are among Few environmental impacts of spent fuel are also of most interest to people in neighboring areas, and the community, and this mission is shared by the most important issues regarding At Olkiluoto, we produce electricity in an dissemination of information on these the entire personnel. well-being at work. We are in the middle environmentally sustainable manner. The issues is among our key communication In last year s corporate responsibility of a major generational change, and as carbon dioxide emissions from our produc- objectives. development project, the management the company is simultaneously involved tion are comparable to those from renew- In a nuclear power company, cor- rated safe production as the company s in several major projects, it places huge able energy sources. Thus, we help to fight porate social responsibility must be single most important issue regarding demands on the competence and training climate change. integrated into all activities, development, corporate social responsibility. In add- of our personnel. Therefore, ensuring com- We seek to minimize the adverse and management. Responsibility is one ition, as the same issue also surfaced in petence has been one of the company s environmental impacts in all stages of the of our values, observed by all of our the value training for personnel, we can strategic objectives over the last few production chain. The second theme of our personnel. I wish to extend my thanks safely say that corporate social respon- years. report is the use of uranium throughout to our personnel and the numerous sibility has been properly understood in We have enhanced many measures the chain, from the mine all the way to the subcontractors for a good and respon- our company. We will not budge an inch aimed at improving the well-being of our disposal of spent nuclear fuel. sible year of operations. It is a pleasure regarding the safety of our operations, personnel, and this work continues. In add- During the past year, we audited to tell all our stakeholder groups about not under any circumstances. ition to the continuous development of uranium production in Kazakhstan, and our our activities. Safety has also been selected as one competence, we ensure the occupational audit team found everything to be in order. of the themes for this report. It is one of safety of our personnel and promote the Further information on environmental Jarmo Tanhua the subjects that our stakeholder groups creation of high-quality work conditions matters, objectives, and their attainment is CEO want more information on, and is partly for all. We did not quite achieve the zero also available in a separate environmental due to the serious nuclear accident that accident target in occupational safety, report that can be viewed on our website.

8 8 OPERATING ENVIRONMENT THE COMMON EUROPEAN ENERGY POLICY IS AT A CROSS- ROADS.

9 OPERATING ENVIRONMENT 9 ENERGY POLICY FACES ATMOSPHERE OF UNCERTAINTY The European energy policy is we drift towards a situation where each than the attainment of commonly set the small ones to achieve that. Until now, facing an atmosphere of uncertainty. The uncertain economic situation is also reflected in the country observes a selfish national energy policy that is based on each country s own needs and premises and abandons the common objectives?, Leskelä asks. objectives. Jobs are a good example: the Member States care less about, say, the environmental friendliness of jobs than the number of jobs. A country s employ- the countries critical of nuclear energy, such as Austria, the Netherlands and Denmark, have not been at the center of energy policy, but this balance will now energy sector: investments are on hold and projects are being postponed. Economic policies have superseded the climate policy on decision-makers agendas, and the renaissance of nuclear power was at least dented by the Fukushima The short-term favorite response suggests actions benefiting each individual country; however, in the long run, it may be that the chosen measures will not even benefit those countries themselves, Hyvärinen argues. Dominance of national interests ment figures are often considered more important than its climate and environmental objectives, he explains. The decision by Germany was quite a blow to the Commission, which is seeking to establish a common energy policy, although I do believe that Germany will reconsider its decision. It is also worth noting that nuclear power still has its change since Germany has switched camps, he predicts. NPP accident. Energy policies are increasingly and obviously based on countries own na- own, clear role in the Commission s own energy roadmap when striving towards The operating environment for energy tional interests. A good example of this emissions-free energy production, Rämö production and its trends are discussed is Germany s decision to give up nuclear points out. by Jukka Leskelä, Director, Power Gen- power. Of course, Germany is fully within Leskelä is afraid that the decision taken eration, Finnish Energy Industries, Esa its rights to do so, but they have not in the summer by Germany, a large and Hyvärinen Vice President, Public Affairs, really stopped to think of the impacts on central EU country, to close its nuclear Fortum, and Jouko Rämö, the leading other countries. It is clear that the deci- power stations according to an acceler- expert in energy and climate policies at sion will affect both the shared energy ated schedule will have more wide-ranging Pohjolan Voima. policy and the energy policy decisions repercussions on the energy policy. In a way, we are now at a cross- of its neighboring countries, Hyvärinen Each Member State wants to be roads with the common European energy says. right and also have others act in line policy. Will it be systematically developed The well-being of one s own with its own model. Naturally, the big towards open energy markets, or will country is becoming far more important Member States are better placed than Jukka Leskelä

10 10 OPERATING ENVIRONMENT Nuclear power still has its own, clear role in the Commission s own energy roadmap when striving towards emissions-free energy production. The euro crisis will hit investments In 2011, the euro went into a crisis, initially driven by the growing deficits of the national economies of Portugal and Greece, and then, to a lesser degree, by those of Spain and Italy. The ECB has tried to revitalize the euro zone economies by pouring more money into the market. The strong euro zone countries have had to support the over-indebted crisis countries in order to stabilize the euro. The financial markets are sitting on the fence, and there is much uncertainty regarding the economy, Rämö says. The economic uncertainty is reflected everywhere, even in the energy sector. It is unclear whether the growth targets will be achieved, or if the crisis in euro zone countries will continue, and if so, how it will affect the economies and competitiveness of EU countries, Hyvärinen states. Plenty of investments are required in the energy sector over the next few years to replace both ageing plants and plants using fossil fuels. The electrical grids also need a lot of investments. The Commission estimates that over the next 10 years, EUR 1,000 billion will be required for energy sector investments in the EU countries, Rämö says. Subsidies interfere with investments in renewable energy The jointly agreed objectives for fighting climate change also require investments in emissions-free forms of energy production. The economic uncertainty and austerity measures taken for stabilizing the economy affect profitability calculations and make the initiation of investments more difficult, Rämö continues. The different national subsidies and their constant changes also pose a challenge. In a common market, subsidies should be, as far as possible, at the same level in different countries. It should also be considered how the subsidies can eventually be abolished. The majority of all investments in electricity generation in the EU are already receiving subsidies. That is a worrying trend from the point of view of competitiveness and the efficient functioning of the market, Leskelä says. Renaissance in nuclear power dented The year 2011 was not a good one for nuclear power. Following the Fukushima NPP accident, the safety of nuclear power was and is being re-assessed in many countries. The decisions taken by Germany and Italy are without a doubt the most significant ones. In Germany, NPPs will be closed down according to an accelerated schedule, and Italy failed to take the decision to construct an NPP that had already been believed to be a certainty. The decisions seem very rash and made for reasons of domestic politics: Germany was in the middle of an election campaign, and the Italian decision was related to the process of ousting Berlusconi, Rämö says, with regret. Jouko Rämö

11 OPERATING ENVIRONMENT 11 It is obvious that following the stress tests, the legislation related to the safety of nuclear power will become more strict and uniform in Europe. From Finland s point of view, this is a positive development, because that legislation will now be closer to Finnish legislation, Leskelä points out. The stress tests mean that, inevitably, the responsibility for nuclear safety will increasingly move from national decision-makers to the EU. At the same time, care should be taken that nuclear power companies do not have to perform a balancing act between two regulators with different policies, Hyvärinen warns. It is difficult to tell what Fukushima really means for European nuclear power in the long run. We need an emissionsfree form of energy generation on a large scale. We need either coal or nuclear power. If carbon capture and storage (CCS) does not win wider acceptance, there really are no alternatives to nuclear power, Hyvärinen continues. In the Czech Republic, for example, the German decision has actually accelerated the new NPP projects. In that country, electricity generation is an industry, and the export of electricity is considered just as valuable to the national economy as any other exports, Rämö says. In the Czech Republic, nuclear power facilities are being built with great enthusiasm and with exports in mind. The attitude towards nuclear power generation differs from that in most countries. In Finland, for example, even the smallest of pebbles would be carefully swept out of the way of any other huge industrial investment, and a red carpet would be laid under the investor. However, in the case of nuclear power, these investments are not welcome; instead, there is hesitation and debate over the necessity for the investment, Leskelä points out. Improving energy efficiency alone requires electricity. Electricity is a solution, not a problem During 2011, the EU issued four energyrelated roadmaps. The roadmaps present electricity as a solution, not a problem, which is very positive indeed. Electricity is portrayed as a significant means of improving energy efficiency. Now, it is our job to find emissions-free methods of producing this commodity, Hyvärinen says, with some contentment. Actually, the roadmaps are not really roadmaps, but merely plans setting out goals, and they do not really tell you how to achieve these goals. A real roadmap will then be required for their implementation, Leskelä believes. Leskelä continues his deliberations by analyzing the setting of goals for climate and energy policies. It looks like means have become goals in themselves. We should now start finding the correct goal. Do we want to solve the climate issue or do we want to ensure that renewable energy enjoys national subsidies. Solving the climate issue will require cost-efficient, systematic, and coherent measures. Now, the nationally decided measures are often overlapping, conflicting, and have effects that cancel each other out. It is important, particularly for Finland, that the national special conditions are understood at the EU table. Finland is in many ways different from the average EU country, Rämö argues. Fighting climate change with emissions trading and the increase in renewable energy production and improvement of energy efficiency would need logical and unambiguous long-term rules. That is the only way to achieve the three objectives. In order to achieve an objective, the 27 Member States and the EU must act coherently, using harmonized measures, Leskelä says. Electricity is a product with further scope for research and innovations in its production. Improving energy efficiency alone requires electricity. For example, when electric cars replace fossil fuel-powered cars, more electricity will be required. The challenge is to produce electricity in a better, acceptable, and sustainable manner, Hyvärinen concludes. Esa Hyvärinen

12 12 OPERATING ENVIRONMENT ECONOMIC POLICY SUPERSEDED CLIMATE POLICY ON THE DECISION-MAKERS AGENDA Last year, the developments in the The energy tax increases, pro- the recorded peak consumption was the sea. On the international INES international economy, particularly in the posed by the previous government 14,998 MW. At that time, nearly the scale, the Fukushima accident was euro zone countries, was reflected and strongly criticized by the energy entire Finnish generation capacity classified in the most serious cat- in almost all decision-making through sector and private household cus- was being deployed, with the excep- egory, category 7. its impact on economic policies. As the tomers, took effect at the beginning tion of just a few power plants. Following the accident, the Minis- economic crisis deepened, the govern- of In parallel with other cost- The European Commission try of Employment and the Economy ments of euro countries agreed on a cutting measures, the new govern- issued four road maps for initiating requested the Finnish Radiation and stabilization package and its associated ment decided to cut the subsidies to the public debate and extending all Nuclear Safety Authority (STUK) austerity measures for balancing the renewable energy in order to save the way to The roadmaps, to produce a report on how Finnish excessively indebted national econ- another EUR 25 million to balance the related to the climate, traffic, natural NPPs have prepared for floods and omies. The year ended with uncertain national economy. resources and energy, are aimed at other extreme weather phenomena. anticipation as the EU continued to preventing climate change and at On March 21, 2011, STUK requested look for a way out of the crisis. The parliamentary elections in the spring changed the balance Electricity consumption decreased from the previous year improving the efficiency of both resource and energy usage. Electricity has a significant role in achieving the Fennovoima, Fortum, and Teollisuuden Voima to produce an account of what provisions have been made at their of power, and a six-party coalition In 2011, about 4 per cent less electri- roadmap objectives. NPPs in operation, under construc- government was formed in Finland, city, 84.4 billion kilowatt-hours, was tion, and in the planning stage for ex- following negotiations that took well over a month after the elections. consumed in Finland. The positive economic cycle in industry and the cold Focus on nuclear safety ceptional natural phenomena and how the supply of electricity and cooling The Government s Program fo- winter increased consumption early in The strongest earthquake ever water has been secured in different cuses on looking after the economy. the year. However, in the fall, a down- recorded in Japan and the result- transient and accident situations. The government has promised to turn in the economy and the warm ing tsunami caused serious damage Later in the spring, the nuclear process the construction license weather reversed the trend. Adjusted at the Fukushima Dai-ichi NPP on safety authorities of EU countries applications for additional nuclear for temperature differences, the de- March 11, The plant s power started, on the initiative of the power without delay. As a new crease in electricity consumption was supply was cut off, and removal of European Council, stress tests for element of energy policy, the govern- 1.3 per cent from the previous year. the residual and decay heat from the establishing the safety situation in ment is investigating the possibility of The import of electricity increased nuclear fuel in the reactor could not NPPs. In Finland, the stress tests collecting EUR 170 million in windfall by 32 per cent from the previous be accomplished. Units 1 and 2 of the were coordinated by STUK, which taxes. The introduction of a uranium year. A new record in electricity con- power plant were badly damaged, submitted the national final report tax is also being investigated. sumption was achieved during the and the plant released radioactive to the EU Commission at the end of cold spell on February 18, 2011, when emissions into the atmosphere and the year.

13 ELECTRICITY PROCUREMENT BY ENERGY SOURCE IN 2011 in total 84.4 Twh Waste 0.8% 2 Peat 6.2% 3 Coal 11.8% 4 Oil 0.4% 5 Biomass 11.9% 6 Natural gas 10.9% 7 Wind 0.6% 8 Net imports 16.4% 9 Hydropower 14.6% 10 Nuclear power 26.4% TOTAL ELECTRICITY CONSUMPTION IN 2011 in total 84.4 Twh Industry total 48% Other consumption total 49% Housing and agriculture 27% 2 Services and construction 22% 3 Losses 3% 4 Forest industry 25% 5 Chemical industry 8% 6 Metal processing 10% 7 Other industries 5% OPERATING ENVIRONMENT 13 FURTHER INFORMATION AT Source: Finnish Energy Industries, Energy year NUCLEAR POWER IN THE EU In the European Union, almost 30 per cent of the electricity of the Member States is produced by nuclear power. Of the Member States, 14 have nuclear power plants. In all, there are 134 NPP units in the EU. 6 new NPP units are currently being constructed in the EU. 2/3 of the electricity produced without carbon dioxide emissions is made by nuclear power. Source: and

14 14 RELEVANCE MATRIX RELEVANCE ASSESSMENT OF TVO S RESPONSIBILITY During the year, we investigated and analyzed the opinions of stakeholder groups regarding TVO s corporate social responsibility issues. The purpose of this relevance analysis was to identify the issues that affect the implementation of the company s corporate social responsibility. The results of the analysis were also utilized when producing this Corporate Social Responsibility Report The report concentrates on the responsibility issues considered most important by our stakeholder groups. We hope that, in this way, the report will best serve our various stakeholder groups. The relevance analysis highlighted the corporate social responsibility issues most important to our stakeholder groups. They were grouped under four themes: safety, the environment, the road of uranium from bedrock to bedrock and TVO as a company. The analysis included discussions and studies by the company s management, personnel, and external stakeholder groups. We investigated the issues held important by stakeholder groups using two surveys. During 2011, the communications agency Pohjoisranta carried out a survey addressed to decision-makers, civil servants, the media, influential individuals, experts, and NGOs. The survey was implemented as an online questionnaire supplemented by theme interviews. The questionnaire was sent to 468 persons, of which 208 (44 per cent) responded. The annual energy attitude survey conducted by Yhdyskuntatutkimus Oy was also utilized for the report. In addition to these surveys, we also took into account the comments and questions of visitors of the Olkiluoto Visitors Center. During the spring 2011, discussions were held with TVO managers (eight interviews) in conjunction with the corporate responsibility development project regarding issues related to corporate social responsibility and their treatment in connection with various functions. The ways in which responsibility issues should be developed in the company were also discussed. A summary of these discussions was presented to the management at a Management Team meeting. The company s values were discussed at a value training session organized for the company s experts in September. One of the values discussed was responsibility: What is it. How is it realized in day-to-day work. How should it be developed. The results of interviews with the company s management and personnel were utilized for the relevance analysis, and they were also used for determining the degree of relevance of the company s responsibility issues when producing the relevance matrix. The views of the stakeholder groups regarding TVO s relevant corporate social responsibility issues are best, and in a continuous manner, obtained in connection with frequent visits. Each year, TVO has more than 17,000 visitors; these visits are discussed in greater detail on pages In addition to visits, the views of the stakeholder groups were investigated in a survey conducted in continuance of the survey of spring The previous survey was addressed to the media, civil servants, and political decision-makers in the neighboring regions of Olkiluoto. The survey now conducted had a wider target group. The new target groups included important political decision-makers and experts as well as labor and student organizations and NGOs. The results of these surveys were utilized for the relevance analysis as indications of the importance of various issues to the stakeholder groups. TVO s stakeholder groups Our most important stakeholder groups include Personnel Owners Public authorities Neighbors and nearby municipalities Decision-makers Investors Subcontractors and goods suppliers Media General public.

15 RELEVANCE MATRIX RELEVANCE MATRIX 15 Importance to stakeholder groups Moderate Great Very important Moderate Great Very important Importance to TVO Safety 1. Nuclear safety 2. Appropriate handling of transient situations 8. Continuous development 9. Personnel competence development 15. Occupational safety Uranium life cycle from bedrock to bedrock Safety of final disposal of spent nuclear fuel Responsibility of the procurement chain Environmental matters 4. Environmental impacts during production 5. Low carbon dioxide emissions from production 17. Energy efficiency in production 18. Environmental impacts of the construction phase TVO as a company 6. Reliability of production 7. Acceptability of nuclear power 10. Domestic production base 11. Openness in communications 13. Avoidance of grey economy 14. Economic profitability of production 16. Cooperation in the neighboring areas 19. Creation of jobs 20. Openness and ethics of administration 21. Cooperation with stakeholder groups 22. Sponsorships

16 16 safety Sarianna Niemi Jukka Henttinen Soili Vaimala Esa Mannola Mikko Kosonen

17 SAFETY BY ALWAYS PREPARING FOR THE WORST safety 17 The Nuclear Energy Act requires that the use of nuclear energy must be safe, and it shall not cause injury to people or damage to the environment or property. This good and sound policy guides all of our operations, says Esa Mannola, Senior Vice President, systematically built in many ways. Safety defines all of our activities, because only safe plant units can be used for producing electricity, Kosonen summarizes. Mannola stresses that nuclear safety is a shared concern of all. Nuclear safety is not created by individual employees or organizational units; everybody must participate and contribute. The principle of continual Laws of physics as the basis of nuclear safety Nuclear safety is developed by analyzing risks and by making provisions for them. At the end of the day, nuclear safety is always based on the valid and constant laws of physics, Mannola says. NPPs observe defense-in-depth safety principles and deploy multiple reliability and improve general reliability. We use the method to develop and analyze various scenarios, think what might happen in them and try to take precautions against them, Mannola says. Multiple safety systems We have four-fold safety systems at the Olkiluoto NPP. Should one system fail, Nuclear Safety. improvement is very much a key issue in the safety culture. The technology, com- release barriers. The many diverse and redundant safety systems reduce the the next one takes over. A user error or even several equipment failures can- With the Nuclear Energy Act in mind, petency, attitude, and capabilities must be probability of accidents. The design and not cause a serious accident, Kosonen we always prepare for the worst fore- right, and they must be advanced at all dimensioning of safety systems is based explains. seeable scenario, adds Mikko Kosonen, times. We have to constantly analyze the on computational accident analyses and We maintain and develop our Senior Vice President, Production, risks and their probabilities and look for empirical data. capabilities for alleviating the potential describing the basic philosophy of TVO s ways to improve the safety culture and We calculate the probabilities of dif- consequences. The different emergency safety culture. train our personnel. ferent deviations, operational transients, systems, accident control systems, In a NPP, everything is safety- and potential incidents. We use the Prob- and established procedures allow us to related. In our company, safety is always abilistic Risk Assessment (PRA) method isolate radioactive substances from the the first priority, and each activity is that allows us to assess operational or environment and prevent the creation of assessed on the basis of its safety design-related risks, look for areas of permanent harmful effects in an accident implications. The safety of a NPP is development in the plant s operational situation. Safety culture at TVO TVO s safety culture is comprised of organizational practices and individual attitudes. Thanks to the safety culture, all factors that affect the NPP s safety will receive attention in proportion to their significance and are given priority in decision-making.

18 * 18 safety MAJOR MODIFICATION PROJECTS AT OLKILUOTO MWe Increase of reactor power in 1984 Increase of thermal power from 2,000 MWth to 2,160 MWth increase of the bore of high-pressure turbines Modernization of the turbine plant during Increase of output 19 MWe per plant unit replacement of the reheater with a two-stage unit replacement of the high pressure turbines 840 mwe 860 mwe 880 mwe mwe 710 mwe Four-year modernization project during Increase of reactor output from 2,160 MWth to 2,500 MWth, an increase in net electrical output of 130 MWh/plant unit replacement of low and high pressure turbines replacement of steam separators and installation of overpressure protection valves modernization of the power supply of main circulation pumps replacement of the main transformer and generator switchgear modernization of the refueling machine Modernization projects during Increase of output 20 MWe per plant unit replacement of the low pressure turbines replacement of the generator and its cooling system replacement of seawater pumps replacement of inner isolation valves TVO is not alone in thinking about safety issues. Other nuclear power companies, nuclear sector organizations, research institutes, and public authorities are looking for ways to develop the safety of nuclear power and safety culture at NPPs. For example, the World Association of Nuclear Operators (WANO) issues proposals and recommendations related to safety. The Nuclear Safety Act obligates us to develop safety constantly. The safety of nuclear energy use must be kept at as high level as possible through practical measures and, in order to develop safety even further, the procedures that can be regarded as justified considering experience, safety studies, and scientific and technical development are to be implemented. Constant improvements and the development of plant units in compliance with the obligations of the legislation are part of TVO s values and principles of operations, Mannola explains. Measures for securing the supply of electricity Safety culture is made up of several factors. Preparing for the worst means that the technology and operations have to be constantly assessed. The plant needs comprehensive protection and monitoring systems as well as established procedures that are constantly rehearsed. Over the years, we have developed our plant units, enhancing their safety characteristics. A good example of this are the measures we have taken to ensure the safety of the environment in the unlikely event that the reactor core becomes seriously damaged or even melts. The reactor core is located in a pressure vessel, which in turn is inside a gas-tight containment building, Mannola explains. In order to ensure the integrity and leak-tightness of the containment in a serious accident situation, we have constructed a system that, for example, allows the containment building to be filled with fire-fighting water, irrespective of whether external power supply is available or not. The containment buildings of the plant units have also been fitted with filtered pressure reduction systems. Should the control of containment pressure require releasing steam and gas, the filtered pressure reduction systems allows this to be done without any significant releases of radioactive substances into the environment.

19 safety 19 Only safe plant units can be used for producing electricity. We have also paid a lot of attention to the power supply of plant units and improved their electrical systems. Consequently, Olkiluoto can be supplied from the 400 and 110 kv external grids, and also from the nearby hydropower plant. Electricity is produced for each plant unit by the main generator or by four diesel generators, each of which supplies the safety systems of its own subsystem. We have also made improvements to the supply of electricity between the plant units. In addition to the above, Olkiluoto has a gas turbine plant whose construction was jointly commissioned by TVO and Fingrid. Its two gas turbine units can generate emergency power when required, Mannola continues. Modern OL1 and OL2 units Furthermore, the plants have modern systems for controlling serious accidents. Therefore, we can say that Olkiluoto has very modern plant units in spite of the fact that they were commissioned more than 30 years ago. We develop the plant units by applying the principle of continual development and a long-term plan regarding future actions and modernization work, Kosonen says, with contentment. The OL1 and OL2 plant units have been developed in major modernization projects aimed at improving their safety, reliability, and performance. At the same time, the plant supplier s product support and availability of spare parts are secured. The most recent extensive modernization project was last spring s project aimed at extending the service life of the OL2 unit. A similar project was implemented at the OL1 unit in connection with the annual maintenance outage of the previous spring. TVO submitted its stress test report to STUK in October Last spring, the European Council decided to implement a so-called stress test to investigate the safety of NPPs. The NPPs submitted their own Multiple safety systems prevent accidents The many diverse and redundant safety systems reduce the probability of accidents in Olkiluoto. The design and dimensioning of safety systems are based on computational accident analyses and empirical data. Even if one system fails, several other systems remain available. Olkiluoto has a four-fold safety system. Should one system fail, the next one takes over. A user error or even several equipment failures cannot cause a serious accident. In 2011, the Olkiluoto NPP experienced one INES 1 category event (2) related to cracking of the guiding and main pistons of the blowdown system valves. As a repair measure, the relevant parts of the valves were replaced. The corrective actions include the review of the preven- tive maintenance and replacement programs of equipment important to safety. In 2011, we also prepared two special reports concerning our operations. The events referred to in the reports were classified as INES category 0 events (3) (no significance to nuclear or radiation safety). During the more than 30 years of operating history of the Olkiluoto NPP, there have been only three INES category 2 events and several INES category 1 events. The NPP accident in Fukushima, Japan, was classified as the most severe category, category 7, on the severity scale. FOR FURTHER INFORMATION, VISIT and

20 20 safety reports to the national radiation safety authorities at the end of October, and STUK sent Finland s national report to the EU Commission at the end of December. The purpose of the tests was to establish what precautions the NPPs have taken regarding earthquakes, floods, and extreme weather conditions. In addition, the consequences of a simultaneous failure of safety systems of the NPPs and their preparedness for serious accidents were assessed. One of the situations we have assessed is where the power supply or external heat sink, i.e. sea water cooling in the case of TVO, would fail and, in addition, the multiple backup and safety systems were lost, says Pekka Viitanen, Head of TVO s Radiation Safety Section. Viitanen was in charge of compiling TVO s report submitted to STUK. Our investigation process covered as many angles as possible, but it did not reveal any major modification needs regarding the Olkiluoto power plant units. The investigation carried out shows that the revisions and modernization projects have kept the OL1 and OL2 plant units up to date and that they comply with modern safety requirements. At OL3, the new safety features and the serious accident control systems have been the basis of design work right from the beginning, and the plant unit will be the first one where they are in use when the unit first starts up. The most salient thing about the avoidance of serious accidents at Olkiluoto is ensuring the power supply of electrically powered safety systems. The availability of power has been secured by multiple safety arrangements at Olkiluoto. Viitanen says that TVO is further improving the water supply to the reactor in situations where water is not available through fixed safety systems. In such a case, water would be supplied through the fire-fighting water system to the fuel pools and reactor pressure vessel of the reactor building. STUK is currently in the process of revising its set of nuclear safety guides, and TVO will take any new requirements resulting from the on-going regulation amendment work into account at all Olkiluoto plant units. The development of safety systems continues The national report produced by STUK states that the Finnish nuclear power companies have been systematically improving the safety of their nuclear power stations ever since they were commissioned. Although the earthquake and weather resistance of the plants has been improved, the stress tests revealed a need to add systems for ensuring the power supply of the Olkiluoto power plant in a situation where all backup power systems are simultaneously lost. STUK also stated that the preparedness plans do not sufficiently take into account an accident affecting more than one plant unit at the same time. STUK s assessment was that the availability of human resources for such situations must be increased. We shall continue the work of analyzing the safety investigations with STUK and carry out the necessary actions in the coming years. Some of the development actions highlighted in the investigation are already at the planning stage, some are undergoing further investigations. One thing is certain: nuclear safety will continue to develop, Mannola concludes. SAFETY CULTURE-RELATED INSTRUCTIONS TO TVO EMPLOYEES: make sure follow LOOK AFTER STOP AND THINK REPORT CREATE PUT INTO QUESTION AND DEVELOP