Fennovoima’s year 2019 Contents

REPROGRAMMING TO ENABLE PROGRESS AND OPERATIONAL READINESS...... 40 CO-OPERATION...... 3 Preparing for commissioning of the plant Strategy and program Plant availability

PLANT SAFETY...... 10 PEOPLE AND COMPETENCE...... 44 Ensuring plant safety Organizational structure supports success Fractured zone and plant location Learning organization Principal evaluations High personnel well-being Progress made in the key development areas identified in STUK’s preliminary safety assessment FINANCIAL STATUS AND GOVERNANCE...... 49 Financial figures 2019 CONSTRUCTION READINESS...... 17 Risk overview Plant basic design is progressing Responsible business practices Status of the basic design review Construction work carried out on site REPORTING PRINCIPLES...... 54 Realization of safety culture principles in the project area Occupational health and safety Environment Local impact of the Hanhikivi 1 project

IMPLEMENTATION QUALITY...... 34 High-quality implementation requires a high-qualitysupply chain Supply chain management Safety culture in the supply chain

2 CEO Review and Strategy

CEO Review Plant Construction Implementation Operational People and Financial status Reporting 3 and Strategy safety readiness quality readiness competence and governance principles CEO review Reprogramming to enable progress and co-operation

The year 2019 was one of co-operation well-defined open items to be closed design documentation and implementa- Our third and fourth priorities last year and progress. We started the year by during the engineering and licensing tion data. By year end, we had reviewed were related to the preparations for the launching our development program, process. We also submitted the first most of the systems design and started construction and operational phases with the target of reprogramming both batch of the preliminary safety analysis to review building layouts. of the plant lifecycle, respectively. For ourselves and our plant supplier RAOS report (PSAR) to the Finnish Radiation these and the above-mentioned safety Project Oy. This had become necessary and Nuclear Safety Authority (STUK). This In early spring 2019, we also reorganized and design priorities, we developed new due to the severe project delays that we marked the start of the technical con- ourselves to enable clear ownerships approaches and acceptance criteria in had faced during the previous years. We struction license activities – great results for the different parts of the Hanhikivi 1 meetings which we call Fennoforums. As had already been carefully analyzing the of many experts working well together. plant (assets), project deliveries by the a new company, we need to constantly situation in 2018, so our priorities were plant supplier (scopes), and our own cor- develop and renew ourselves as our clear as we headed into 2019. Our second priority was to start reviewing porate functions (support). The related project goes ahead. This can be accom- the plant systems and buildings design. A transformation still requires our atten- plished by a combination of innovative Our first priority was to resolve plant-level new technical co-operation plan was pre- tion to find the right balance between dialogue and careful decision making. safety issues, ranging from bedrock and pared together with the plant supplier, to the long and the short term. This is site uncertainties to major plant design agree on a multi-stage basic design pro- important because we need to see Our organization and our people form and layout solutions. By year end, we cess and related quality plans. At the first ourselves both as a project company the foundation for succeeding in the could state that our Hanhikivi 1 plant basic design stage, we review the design and a future nuclear licensee. Our new Hanhikivi 1 project and operation. For design will support a very high level and associated PSAR documentation, organization enables us to find the right the first time ever, we faced in 2019 the of nuclear safety and security, with and in later stages, we will review the final ways forward. challenge of reviewing a large amount

CEO Review Plant Construction Implementation Operational People and Financial status Reporting 4 and Strategy safety readiness quality readiness competence and governance principles of plant design documentation—and we expect this to gradually become clearer were capable of accomplishing this. Sure, to all of us and all our stakeholders, includ- we used new approaches but the most ing everyone involved in the important important fundament for this success had local activities in the Pyhäjoki region. been created over the years: competence I hope you will enjoy the stories and sta- and resources. It is indeed a great pleasure tistics of this report. They tell about the to express my gratitude to all the people responsible work we are doing. Thank that have been and are building Fennovo- you for being interested in our journey! ima, from the inside and from the outside.

As our train is now moving ahead, also the Timo Okkonen challenges we face will become broader. COO & Interim CEO This is the subject of the strategy chapter of this report. We have now achieved a more proactive mode of leading the pro- ject and our operations. In practice, this means that we do not only react to prob- lems, but we can see the big picture and prepare ourselves for the next stages. I

CEO Review Plant Construction Implementation Operational People and Financial status Reporting 5 and Strategy safety readiness quality readiness competence and governance principles Strategy and program

Fennovoima is focused on building and We co-operate with the supplier to make tion from our side. We are interested in operating the Hanhikivi 1 nuclear power the necessary design adjustments, and the delivery plans and contracts, work plant. This mission requires a strategy we control that the Hanhikivi 1 plant will schedules and processes, products and and program on how to accomplish this. fulfill the requirements. For making sure services, as well as meeting the Finnish This chapter gives a brief outline of all that our decision making is based on requirements and conditions. the related elements, as divided into four a top-down view, we apply integrated main dimensions: views and target-oriented criteria on plant Our people make things happen. Our safety, construction readiness, implemen- success depends on each organizational 1. Plant design, construction, and tation quality, and operational readiness. unit having the necessary competence operation These criteria are graded by the impor- and resources, which depend on the spe- 2. Project management, suppliers, and tance of the subject. cific phase of the project and the plant deliveries life cycle. We need to have clear roles and 3. People, leadership, tools, facilities, Our project is huge. Our success responsibilities at all organizational levels. and support depends on the capability of the plant Our management system and all our 4. Performance, risk factors, licensing, supplier and all their partners and sub- tools need to be set up to support every and financing contractors to deliver on time and with one of us in our work. As the project goes the required quality. The main delivery forward, digitization will be the key to scal- Our plant forms our main focus. It is scopes may be divided into engineering ing up and remaining efficient in the daily required to enable a very high level of and licensing, procurement and supply flow of information and decisions. safety in accordance with Finnish reg- chain, construction and installation, and ulatory requirements and guidelines of commissioning and training. In the opera- All our processes and communications STUK. In addition, our contract with the tional phase, we also need the nuclear fuel need to be aligned to ensure the right plant supplier requires the plant design supply and other supporting services. competence and resources, to apply the and operational features to enable a high contract and requirements in a system- level of full power availability and a long The supplier’s capability to deliver atic way, to co-operate proactively with plant lifetime. requires constant and proactive atten- the suppliers, to control the deliveries for

CEO Review Plant Construction Implementation Operational People and Financial status Reporting 6 and Strategy safety readiness quality readiness competence and governance principles determining their acceptability, and to Our strategy requires us to excel in build a learning and developing culture. both leadership and management in the These are the core processes for executing different phases of the Hanhikivi 1 plant our business up to the operational phase. life cycle and our own organization. We are running operations that carry a high Our performance is measured in all of societal, economic, and ecological value. the aforementioned dimensions: plant This makes us motivated and commit- performance, project progress, and ted to work with our full heart. We are people effectiveness. For the main goal part of the sustainable energy solution Plant of operating the Hanhikivi plant, we will and we are required to demonstrate our be assessed on the safe plant opera- responsibility. This requires us to report tion, responsible company operations, and communicate well, both inside and and shareholder value by the planned outside. electricity price. We also need to pay attention to the “dark side of the moon”, We will not succeed with a strategy that i.e., the risks involved. Also, the necessary only applies to Fennovoima. Our full pro- Performance regional and stakeholder activities are gram involves our plant supplier and their part of our risk management scope. subcontracts, nuclear and other regulatory authorities, our shareholders and our people, Licensing and financing efforts form the municipalities and local services, and basi- People Project most important acid tests for our safety cally society as a whole. This is the reason demonstration and risk management why our strategy and plans need to be felt level. We want our board and sharehold- like the strategy that fits everyone involved ers to be well informed about our current in our endeavor. When we say “we”, we performance and the possible risks in mean all of us building up Fennovoima’s front of us. operations and the Hanhikivi 1 plant!

CEO Review Plant Construction Implementation Operational People and Financial status Reporting 7 and Strategy safety readiness quality readiness competence and governance principles 3D model of the Hanhikivi 1 nuclear power plant REACTOR BUILDING

TURBINE BUILDING 400 kV

DISCHARGE WATER

3 m 9 m

COOLING WATER Busbars Passive heat removal Condensate Steam 8 Cooling water Feedwater Reactor coolant 9 Aerial picture of the Hanhikivi 1 project area in fall 2019. Imple- Plant Construction mentation Operational safety readiness quality readiness

Plant safety

Nuclear safety lays the basis for our operations. The safety of the plant is ensured during the design phase.

CEO Review Plant Construction Implementation Operational People and Financial status Reporting 10 and Strategy safety readiness quality readiness competence and governance principles Janne Liuko Ensuring plant safety Nuclear Safety Director

We are currently proceeding at a fast design of the control building, there is We did not detect any major modification pace with the design of the plant and its still plenty of work to do for the design needs during thorough assessments of safety assessment. We have reviewed all to be appropriately robust and meet our these systems. of the key safety systems and identified requirements especially in terms of fire some open technical issues that we are and earthquake safety. We have come to We have also proceeded with the prelim- currently resolving. the conclusion that we cannot proceed inary safety analysis report (PSAR) that is further with the control building before a requirement for plant licensing. A PSAR We have adopted a comprehensive, solu- significant modifications are made. localization project that was launched by tion-based safety assessment approach. the plant supplier a little over a year ago We have determined our target level and This year, critical matters in terms of carries the responsibility for the comple- criteria for plant safety. First, we assess, safety include the resolution of open tion of the licensing documentation. We based on our own expertise, whether issues pertaining to the primary circuit were able to submit the first of a total of the plant meets our expectations. Then and the containment, as well as com- fifteen documentation batches to the we verify compliance with the statutory pleting their design. The open issues Radion and Nuclear Safety Authority for requirements. With our own proactive will not necessarily cause any modifica- assessment. We already have some docu- assessment, we want to ensure that we tions of the plant design, but we must mentation for the next batches ready, but can influence the design of the plant if continue with the discussions about some technical issues also remain to be necessary, so that we will receive a plant these matters with the plant supplier resolved. that complies with our wishes. and the main designer and perform more studies in order to verify that the In accordance with our new approach, we Completion of the fractured bedrock solutions are appropriate. Furthermore, aim together with the plant supplier and zone evaluation last year was an impor- safety system assessments and safety the main designer to proactively identify tant milestone for us. We also focused on and hazard analyses must be completed any problems that we may face later on. assessing the reactor primary circuit and to the extent that we can finalize our We have plenty of work to do, but the big plant hazard protection, and achieved a own safety assessment and submit the picture is clear and we know what must great deal more clarity in these respects. related documentation to the Radiation be done. This is the way forward. On the other hand, we also detected and Nuclear Safety Authority. There are some challenges. Particularly in the approximately thirty key safety systems.

CEO Review Plant Construction Implementation Operational People and Financial status Reporting 11 and Strategy safety readiness quality readiness competence and governance principles FRACTURED ZONE AND PLANT LOCATION Thoughts on safety There are certain significant fractured zones in the bedrock at the Hanhikivi nuclear power plant site. Possible slow system reviews movements of the bedrock due to land uplift after the last ice age and movements caused by seismic events Reviews of the plant’s safety systems in accordance with the in the fracture zones have been com- new stagewise review strategy started in April of last year and I prehensively studied. The studies and started to receive basic design documentation included in my investigations include previous studies, area of responsibility. The documentation included the boron of which the first ones were conducted injection system and the emergency core cooling systems, for already in 2018, and studies on eight new example. topics. The studies include for example bedrock investigations in the plant area When assessing safety systems, we pay attention to, for and assessments of observed land move- instance, appropriateness of the safety classification and ments in Olkiluoto and in some Swedish availability and maintainability of the system. We follow a nuclear power plants. standardized set of evaluation criteria to ensure that the reviews are comprehensive and consistent. We never accept The conclusions state that the move- any documents that contains flaws or issues that have an ments, if any at all, are insignificant in impact on safety. However, at this first stage of the review terms of nuclear safety and constructabil- process, we can tolerate if some information that has no Sergey Kuzin ity. On the basis of all of the studies and implication on safety is still missing from the documents or System Engineer investigations, Fennovoima considers the typos, because we can return to those during the latter review Safety systems current plant location acceptable. stages. Naturally, all of the information must ultimately be accurate and appropriately presented. However, we will monitor movements of the bedrock throughout the plant lifecy- Over the course of last year, I received for review documen- Reviewing the documentation was not easy at first, because cle. In addition, properties of the bedrock tation on ten of the total of twelve safety systems included in we were simultaneously practicing the new review process will be taken into account in the design my area of responsibility. All aspects influencing safety were and evaluation criteria. Nevertheless, we succeeded in the of the buildings. We will continue discus- in order in the documentation, and we gave our conditional work, thanks to close cooperation with the other departments. sions on this subject matter with the plant acceptance for seven of the documents. I believe that we will The practical work also provided us with information that supplier in early 2020. also accept the remaining three documents very soon. helped in finalizing the review guidelines and procedures.

CEO Review Plant Construction Implementation Operational People and Financial status Reporting 12 and Strategy safety readiness quality readiness competence and governance principles PRINCIPAL EVALUATIONS The assessment revealed deficien- In addition to submitting the assessment According to the assessment results, In early 2019, we established focus groups cies, for instance, in the realization of results to the plant supplier and the general critical open design issues involve, for consisting of experts from different engi- some system separation principles. designer, we gave some concrete mod- instance, operating experience on fuel, neering disciplines to scrutinize concerns, In particular, the principles were not ification proposals and submitted some in-core measurement, and the plant’s challenges, and open issues related to realized, or the realization of the prin- requests for clarification, some of which have availability factor. A need to supplement plant-level design and the overall licens- ciples was not clearly indicated by the already been taken into account in the plant or update some of the analyses and doc- ability of the plant. A summary of the key design documents in the case of the design. We established a separate focus uments was also observed. results of these evaluations is given below. control building. The evaluation also group that focuses on assessing the design emphasized a need to comprehensively of the control building. The plant level build- Radiation safety Layout evaluation for plant-level investigate the buildings and facilities ing evaluation was also an efficient means With the evaluation, we aim to ensure that buildings where the separation principles cannot of clarifying Fennovoima’s internal basic we have a clear understanding of all the The evaluation focused especially on be realized by means of simple structural design evaluation processes and criteria. matters influencing radiation safety in the safety design features that could have a separation. plant. In addition, we identify any open significant impact on layout and struc- Reactor and primary circuit issues related to plant design that should tural design of the plant. These include for The description of functional design The purpose of the evaluation was to be changed or at least justified in more example matters influencing the exterior in the design documents was not suf- create a fundamental understanding of detail in the design. The work started in dimensions of the power plant buildings, ficiently detailed at this point to allow the reactor and primary circuit as safety 2019 and will continue in 2020 with dis- such as structural fire protection arrange- for a proper assessment of the support barriers. The evaluation was divided into cussions with the plant supplier, followed ments, radiation safety of access routes functions. This applied to the cooling and two parts: the fuel and reactor core and the by a presentation of the results to STUK. and facilities, and physical protection. ventilation functions, in particular. primary circuit were evaluated separately.

CEO Review Plant Construction Implementation Operational People and Financial status Reporting 13 and Strategy safety readiness quality readiness competence and governance principles Progress made in the key development areas identified in STUK’s preliminary safety assessment For more information, see STUK's preliminary safety assessment (2014).

MAJOR TOPICS PROGRESS IN 2019

1. The design of nuclear power plant shall take the crash During 2019, a diverse air-cooling residual heat removal system for reaching safe state after a large comercial of a large commercial airliner into consideration as an airplane crash was included in the design. Also, required changes for the control building have been defined. Veri- external hazard. fication activities to demonstrate fulfilment of requirements related to a large airplane crash will continue in 2020.

2. System design shall apply the separation principle to ensure During 2019 systems applying the separation principle and separation of the safety functions have been clarified. the implementation of the safety functions even in the event of a In addition, the modifications required to fulfil the separation principle in the control building have been identified. failure and during internal and external hazards. The work will continue with system and building evaluations and verification activities in 2020.

The objective is to prevent the reactor core from melting through the bottom of the pressure vessel under high 3. Depressurization of the primary circuit in a pressure conditions during a severe accident. The design provides a separate emergency pressure reduction severe accident. system that is dedicated for managing severe accident conditions. The operation and capacity of the system will be justified in severe accident analysis.

The plant supplier has delivered new revision of the experimental and calculational justification for the functionality of the passive heat removal systems of the containment building in December 2019 and a new revision of justification for 4. Experimental substantiation of passive heat the steam generator was expected in early 2020. Further experiments to demonstrate the functionality of the passive removal systems (PHRS). heat removal systems have been carried out in the test facility at Lappeenranta University of Technology. The report of the test results will be completed early 2020.

5. Detailed demonstration of compliance with the Finnish The documentation is prepared as part of the functional safety design process. During 2019 the scope of the requirements in terms of the redundancy, separation, and process was extened to cover normal operation design. The final demonstration of compliance can be found diversity principles of the systems that ensure safety functions. in licencing documentation and system requirements assessment.

STUK has approved the supplier's justification of the reactor service life of 60 years with requirement to per- 6. The effect that the material of the reactor form additional irradiation test program for reactor material and its welded joints. Also, irradiation test program pressure vessel has on the radiation embrittlement rate. (plan) is approved by STUK with minor requirements related to specimen sampling phase. Planning for the pro- gram execution is ongoing. A surveillance program for reactor materials will be conducted during operation.

7. The effects that postulated, sudden pipe breaks of the primary coolant circuit have on the durability of the internal An analysis will be carried out in accordance with the YVL requirements. The corresponding analyzes of the refer- parts of the reactor as well as the implementation, inspec- ence plant have been submitted to STUK with positive results and the Hanhikivi 1 design spesific analyzes will be tion and radiation protection principles of the primary submitted to STUK in batch 2 of the pressure vessel structural design. coolant circuit nozzles.

CEO Review Plant Construction Implementation Operational People and Financial status Reporting 14 and Strategy safety readiness quality readiness competence and governance principles MAJOR TOPICS PROGRESS IN 2019

For the penetrations in the top section of the containment, the main risk relates to how difficult they are to build. The 8. Design of penetrations in upper part of containment constructability has been demonstrated in the second implementation phase of the Leningrad plant. The leak-tight- building and tendon system of inner containment. ness of the penetrations is demonstrated in preliminary safety analysis as a structural requirement and the fulfilment of the requirement is verified later with structural design.

9. The suction strainers of the safety injection Discussion about the insulation materials of the containment building are on-going. The functionality of the systems and experimental verification of their cooling water filters will be verified before construction with experimental tests that assess the functionality of the functionality. cooling systems during accidents.

10. The technical solutions that are related to obtaining the The plant supplier's justification for the adequacy of water inventory shows that residual heat removal can be cooling water for the systems that implement the diversity continued without external supplies for a week. principle in residual heat removal for a 72-hour period.

11. Independence of the systems used to implement the The severe accident management strategy has been developed during 2018-2019 to meet the Finnish require- severe accident management strategy (SAM). ments. The strategy will be presented to STUK as part of the preliminary safety assessment report (PSAR).

12. A procedure and systems to reduce containment pressure The systems and procedures to achieve a safe state after a severe accident will be descripted in the severe to achieve a long-term safe state after a severe accident. accident management strategy as part of the PSAR.

13. Realization of safety principles and objectives in the techni- At the end of the year, the plant supplier announced that it had chosen Framatome-Siemens to supply I&C systems. cal solutions of the plant with regard to I&C systems. Preparations for automation architecture design are currently on-going.

The general principles for the separation of electrical systems are described in chapters 1.3 and 3.0 of the PSAR. 14. Separation principles for electrical systems. The chapter 8 will describe the electrical systems more in detail but it is not yet fully finalized.

The scope of the hardwired diverse I&C system will be described in I&C architecture and in the chapter 7 of 15. Scope of the hardwired diverse I&C system. the PSAR that describes the automation systems.

16. Application of the diversity principle in the measure- Measurement sharing principles are currently presented in a document called Plant Safety Design and will be ments of the reactor protection system and in activation refined in functional architectures. As a result, automation design will provide sufficient basis for the design of of the protection. automation systems.

17. Cooling of auxiliary and support systems and substantia- The design includes a cooling system for the safety systems ensuring its functionality in both normal operating condi- tion of a sufficient cooling water supply. tions and in design basis accident conditions.

The color codes repre- = The matter has been resolved. = There is a solution for the matter and it is known in which document and when the solution is presented. = The matter is not resolved yet. sent Fennovoima's view of the situation. = Situation at the end of 2018 -> Situation at the end of 2019.

CEO Review Plant Construction Implementation Operational People and Financial status Reporting 15 and Strategy safety readiness quality readiness competence and governance principles Our selected fuel is reprocessed uranium

We have opted to use reprocessed uranium (RepU) as the fuel in Hanhikivi 1. The RepU for the plant will be manufactured in Russia either by a MSZ plant in Elektrostal or the Novosibirsk Chemical Concentrates Plant (NCCP). In both plants, the man- ufacturing process covers all stages from the manufacture of fuel pellets to ready-made assemblies. At present, the only spent nuclear fuel reprocessing plant is RT-1 in Ozyorsk, Russia, but to our knowledge, a new reprocessing plant, RT-2, should be completed in 2025 in Zheleznogorsk, Russia. The fuel Jussi Kumpula supply chain is regularly audited. Reactor Physicist

Manufacture of the fuel for the initial core load will start a couple of years before the completion of the plant. RepU is manufactured by separating unspent uranium from spent will include a preliminary final disposal feasibility study of the nuclear fuel by means of a chemical process. The process fuel on which Posiva Solutions has been working since 2019. allows utilization of uranium that would otherwise go to waste. With these studies, we will demonstrate that the fuel meets all RepU is often confused with mixed oxide fuel (MOX) that of the Finnish requirements for nuclear fuel and reactor core contains plutonium. However, RepU only contains different design. uranium isotopes and no plutonium at all. RepU has been or is currently used in Europe in Switzerland, France, Germany, and We have reviewed and approved various reports submitted Sweden, for example. by the fuel supplier and compared their results with our own reactor physics calculations. Hence, we are already familiar There will be a separate licensing process for the fuel once with the properties of the fuel. In terms of mechanical design, we have obtained a construction license for the plant. For the the fuel is exactly the same as in the other VVER-1200 plants. licensing process, we will submit a fuel suitability study to the The materials and mass of the fuel will be highly similar to the Photo: Roman Pyshkin, Rosenergoatom JSC. Radiation and Nuclear Safety Authority. The suitability study fuel of OL3, for example.

CEO Review Plant Construction Implementation Operational People and Financial status Reporting 16 and Strategy safety readiness quality readiness competence and governance principles Imple- Plant Construction mentation Operational safety readiness quality readiness

Construction readiness

Readiness to begin construction must be achieved well before the nuclear power plant construction licence is granted to us, so that the plant construction work can commence promptly. Progress in technical design and supply chain readiness are key prerequisites for starting construction. The site preparations are well advanced and our practices in the project area are functional. We are preparing to the commencement of the plant construction together with the local stakeholders.

CEO Review Plant Construction Implementation Operational People and Financial status Reporting 17 and Strategy safety readiness quality readiness competence and governance principles Plant basic design is progressing

A nuclear power plant is a large and the formalities of the documents at the have also made significant progress in complex entity consisting of a variety of next review stage. In addition, Fennovoima’s their development of the management systems and structures from different new organizational structure has clarified of the design processes and design. They branches of technology. Hence, the plant internal responsibilities and interfaces. have demonstrated a genuine willingness design process is also complex and multi- to ensure that the processes comply dimensional, consisting of a large number In my opinion, the submitted basic design with the requirements. Overcoming the of interfaces and parallel stages. Further- documentations looks good in terms of challenges has created more trust, and more, licensing introduces a whole new design: safety-related matters have been I believe that we have found a shared dimension to the whole. appropriately considered, and no major approach with the plant supplier. changes are to be expected. Solutions for Over the past year, we have been able to most of the open issues have also been Once the first review stage is complete, the manage the design and the processing of found. This has provided us with more documents will already clearly determine open issues in a manner that allows us to assurance on the appropriateness of the what the physical plant will look like. We efficiently proceed with the design. These design solutions, which has allowed us to do not expect to see any major modifica- successes were achieved after many diffi- proceed further with the design. There is tions of the plant after that stage, and we culties and required a change in both our still plenty of work to do, however. can proceed to finalizing the documenta- organization and in the approach of the tion. Before we can reach the readiness whole project. I feel that the Fennovoima employees to start construction on site and at the have adapted to the new organization component suppliers’ locations, we must In my opinion, a decisive factor in terms quickly, and they have adopted their also complete the detailed design based of the progress of the design was the new roles and responsibilities – as well as on the basic design and verify that the fact that the review of basic design was assumed more ownership to take a stand construction-related organizations and divided into two stages. The division on the design solutions. We have seen supply chains – including Fennovoima Petri Jyrälä allows us to focus on technical issues commendable commitment in the work, itself – are capable of implementing the Engineering when reviewing the design documents as well as flexibility when it is required. plans and supervising the implementa- Director during the first stage, as we can address The plant supplier and main designer tion according to those plans.

CEO Review Plant Construction Implementation Operational People and Financial status Reporting 18 and Strategy safety readiness quality readiness competence and governance principles 100% Status of the basic 100% 90% design review 90% 80% 80%

The plant supplier submits the design for buildings are – except for the control 70%70% documentation to Fennovoima for room building – almost complete. approval. Our review for the documen- 60%60% tation takes place in two stages. In the first phase, we evaluate the safety of 134 50% the plant, availability and maintenance 134 50% aspects. At the first review stage, we 40% only issue conditional approvals for the 40% documentation. By conditional approval 30% we mean that there are no technical 222 30% obstacles in the design documentation 222Received 20% that would prevent its final approval at a Received later stage. 34 20% 34 10% 54 All approved design documentation is 54 10% 0% available to STUK but does not require STUK's approval. The preliminary safety Conditionally accepted 0% assessment, which is a condition for Conditionally accepted Review ongoing the construction license, is a separate Review ongoing Approved by Fennovoima documentation package, and will be sub- Rejected Rejected Conditionally accepted by Fennovoima mitted to STUK for approval. Rejected by Fennovoima Approved by Fennovoima Under Fennovoima’s review At the end of 2019, we were still waiting Number of the documen- Conditionally accepted by Fennovoima To be delivered to Fennovoima for the delivery of the basic design pack- tation that Fennovoima has received from the plant sup- Rejected by Fennovoima ages of the turbine island and buildings, plier and status of its review UnderStatus of Fennovoima’s the first stage review review of the by January 15th, 2020. of which the basic design documents basic design on January 15, 2020. The Tosituation be delivered is constantly to changing. Fennovoima

CEO Review Plant Construction Implementation Operational People and Financial status Reporting 19 and Strategy safety readiness quality readiness competence and governance principles A glance at the hot topics in structural engineering

We at the structural division of the civil engineering department ensure that the integrity requirements for nuclear safety classified buildings of the power plant are met and the structural solutions are such that the plant is protected from internal and external hazards in all situations.

In my opinion, from the perspective of structural engineering, the most intriguing topics of discussion at the moment are related to the movements of the bedrock and to the control building. The former is based around an impact assessment on uneven movements of the bedrock on the power plant’s foundations. The second one con- Francisco cerns an interesting feasibility study that examines the control Canales Mateo building in terms of structural integrity and vibrations induced by Structural Engineer, aircraft impact and earthquake events. I am more involved with this Civil Engineering latter one. The purpose of the feasibility study is to verify that the vibration calculations are correct so that the equipment installed later in the building, can be qualified for expected vibrations, and to verify if some particular structures need re-enforcement.

Both of the studies are very fascinating for a structural engineer like myself. The topics of the studies are relatively new areas of research and therefore only limited data is available on existing nuclear power plants. Due to comparative information being limited, realistic and conservative engineering judgement plays a major role in the final decisions.

CEO Review Plant Construction Implementation Operational People and Financial status Reporting 20 and Strategy safety readiness quality readiness competence and governance principles CONSTRUCTION WORK CARRIED OUT ON SITE Project site’s readiness Preparatory construction work continued at the plant site in Pyhäjoki. At the end of the year, an average of 230 people were for construction working on site.

During 2019, the plant supplier commis- Preparatory construction work of the infrastructure in the pro- sioned both the accommodation village ject area on the Hanhikivi headland has reached a point where and the plant supplier’s and the main con- we are ready for the construction of the nuclear power plant tractor’s site offices; work on staff facilities as soon as the construction license is granted. However, before and the site canteen continued. In the beginning the construction of the plant, some 700,000 cubic plant supplier’s support functions area, meters of rock must still be extracted from the excavation pit construction work of the reinforcement and the levelling concrete for the plant foundation must be workshop and the surface treatment poured. I also think, that the status of infrastructure and the building began in 2019. Groundwork for capacity of the supporting buildings is good, especially after we the plant supplier’s storage area was start the construction of Fennovoima’s administration building started in the area located behind the during this spring. accommodation village. In addition to the physical readiness, the operating methods In the sea areas, the plant supplier and systems of all the parties must comply with our require- continued with the water construction ments and the statutory requirements. The plant supplier and work and dredging of the nuclear power in particular the main contractor still need to develop their plant’s cooling water discharge channel operating methods to make them suitable for the Finnish and the cooling water intake structures. operating environment. Above all, actions are still required in Construction of the breakwaters and terms of the procedures related to construction management Jouni Sipiläinen a cofferdam for the cooling water dis- and supervision, as well as the safety culture. Development of Construction charge channel continued. Fennovoima’s construction supervision organization must also Director be continued according to plan. Over the course of the year, Fennovoima started the construction of a ground- The management of occupational health and safety and envi- site have good readiness in these respects, and the coopera- ing network that will cover the entire ronmental impact in the project area is a good example of how tion between the parties works efficiently. Our goal is to achieve construction site. In addition, soil inves- results can be achieved. All the key parties at the construction the same level of readiness in all other activities as well. tigations were carried out in the turbine island area.

CEO Review Plant Construction Implementation Operational People and Financial status Reporting 21 and Strategy safety readiness quality readiness competence and governance principles In June, Fennovoima signed a contract the safety culture principles were imple- on the construction of the administra- mented reasonably well in the project tion building and plant office with Lehto area. According to the survey results and Group. The actual construction is esti- observations made in the project area 4.00 mated to start in 2020. over the course of the year, cooperation

between the companies operating in the 3.50 REALIZATION OF SAFETY CULTURE project area should be further improved. 3.16 3.12 3.12 3.11 3.05 3.07 PRINCIPLES IN THE PROJECT AREA Furthermore, transparency of deci- 3.00 2.79 2.86 We continuously monitor the safety sion-making and the operating methods culture status at the project area in the must be increased. 2.50 Hanhikivi headland by means of various 2.00 methods, such as audits, the collection Cooperation between the key parties and analysis of observations, and by active in the project area to develop the 1.50 doing safety rounds in the project area. safety culture clearly increased last year. Furthermore, the safety culture status was Now, Fennovoima, RAOS Project, and Titan-2 1.00 studied with a survey in the fall. A total of all have an expert who works full time on Commitment Awareness Transparency Continuous 135 people working in different positions the development of the project area safety improvement 2019 2018 and for different companies in the project culture. This has enabled more effective

area replied to the annual survey (the processing of safety culture matters. Realization of safety culture principles in the Hanhikivi 1 project area in 2018–2019. The Likert scale response rate was approximately 75%). of 1–4 was used in the assessment, where 1 = completely disagree and 4 = completely agree. A In 2020, we will focus on actions to score between 3.00 and 3.30 amounts to “fairly good, some development required” and a score between 2.70 and 2.99 amounts to “fairly poor, must be developed”. The survey results were very similar to increase transparency between the com- the results of the previous year’s survey. panies operating in the project area. The The respondents were of the opinion next safety culture assessment will be that with the exception of transparency, carried out in fall 2020 or in early 2021.

CEO Review Plant Construction Implementation Operational People and Financial status Reporting 22 and Strategy safety readiness quality readiness competence and governance principles OCCUPATIONAL HEALTH AND SAFETY carries out on-site occupational safety At the project site, all contractors work- Fennovoima or at the Hanhikivi 1 site In 2019, the Fennovoima occupational inspections at the Hanhikivi 1 project site ing within Fennovoima’s scope of work has adequate knowledge and skills of safety management system adopted the twice a year. Fennovoima employees follow the extensive risk assessment and the correct working methods and safety new ISO 45001 standard, and certifica- receive occupational safety training as part management procedure that is based on practices, and that everyone working at tion audit was conducted at the end of of the induction training that they receive Fennovoima’s risk register. This ensures the construction site uses the required the year. The certificate was granted to at the beginning of their employment. that risk assessments are carried out in a personal protective equipment. Fennovoima in January 2020. The man- consistent manner and meet our require- agement system covers Fennovoima's We manage and monitor safety at the ments. The plant supplier, RAOS Project, Site inspections promote improvement own operations in Salmisaari and Pyhä- project site together with the plant and the main contractor, Titan-2, follow of operations joki as well as the Fennovoima project supplier and worksite supervisors. Daily similar risk assessment and management We monitor occupational safety perfor- area on Hanhikivi headland. The occupa- occupational safety practices at the site procedures. mance at two levels: procedures and tional safety management systems that are well established. practices. The monitoring aims at continu- RAOS Project and Titan-2 apply at the Central risks at the project site include ous development of working methods and Hanhikivi 1 construction site meet the Effective risk management prevents working at height, sharing information the processing of observed deficiencies at requirements of the OHSAS 18001 stand- accidents between various actors, and working an early stage, before any harm occurs. ard and will be updated to ISO 45001 Extensive risk identification and manage- in winter conditions. A risk assessment standard at a later stage. ment procedures and reporting of safety is performed before each construction Fennovoima’s occupational health and observations are an important part of pre- work. The identified risks are communi- safety management system was sub- Occupational safety management and ventive occupational safety measures. We cated to all contractors and builders active jected to both internal and external audits monitoring responsibilities are distributed assess occupational safety risks from the at the site. Everyone working at Fennovo- in 2019. No deviations were discovered among the different levels of Fennovo- perspectives of risks to the employees, ima or on the Hanhikivi 1 project has the in the audits. Fennovoima also audited ima’s organization, from employees to the facilities and the Hanhikivi 1 project site right to refuse to perform unsafe work. the occupational health and safety man- management team. The management four times a year. Also, we encourage our agement systems of RAOS Project and team monitors how well occupational personnel to make and report observations With the occupational safety training, Titan-2, and participated in inspections by safety is realized on a monthly basis and to improve our occupational safety culture. we ensure that everyone working for the authorities at the construction site.

CEO Review Plant Construction Implementation Operational People and Financial status Reporting 23 and Strategy safety readiness quality readiness competence and governance principles Fennovoima and RAOS Project together carried out an occupational safety inspec- tion of the contractors at the construction Safe working environment site. Fennovoima also conducted targeted Hazard Hunt inspections that focus on one area at a time; examples include is created together inspections of all lifting aids being used at the site, or the chemical storage facilities. Observations made during the inspec- Over the course of the years, I have met several people who Olli-Pekka tions are recorded, and any required have had their health affected due to an occupational accident. Pirilä corrective actions are made clear to the In my opinion, that is not right – all employees should be able Occupational contractors. to return home healthy every day. Likewise, investments in Safety Manager occupational health and safety are in the best interests of the Safety violations are processed in accord- employer and society as accidents often cause significant harm ance with the regular safety observation also to them. or accident investigation procedure. Fen- novoima has zero tolerance of working Our goal is to ensure that nobody’s health or safety is compro- under the influence of alcohol. We carry mised because of the work they do in the Hanhikivi 1 project. out alcohol testing several times a week. All involved parties as well as all organizations and people working in the project area must bear their responsibility for No lost-time accidents at the Hanhikivi occupational health and safety. We all need to be aware of our before the start of the actual construction of the plant. Our headland responsibility, and we must act accordingly. established OHS practices have proven to be functional. In 2019, a total of 548,533 working hours I’m proud of the fact that 2019 was yet another year with no were recorded at the construction site. Safety comes from small things. An accident is usually the accidents leading to absence from work in the Hanhikivi 1 pro- There were no occupational accidents result of the combined effects of several issues, but we can ject area. Even when the size of the construction site increases, leading to absences. At the end of the influence this by ensuring that the occurrence of such issues is we will be able to avoid accidents as long as the working meth- year, 21 months had passed without unlikely. Several minor non-compliances are often not consid- ods and the attitude of all the parties involved are correct, the accidents. ered as risk factors, but if several non-compliances occur in the instructions are followed, and everyone uses the appropriate same place, they will lead to an accident. That is why it is impor- personal protective equipment. Fennovoima's own personnel had two tant to identify and eliminate even those minor risk factors from accidents leading to absence when two both the office environment and the project area. Every day when coming to work, we must all focus on working workers slipped outside the workplace safely today. That is how we will make Fennovoima and the on the sidewalk in winter weather, one It is good that we have had enough time to develop and test Hanhikivi 1 project area a safe and healthy work environment at Pyhäjoki and the other at Salmisaari. our OHS practices together with RAOS Project and Titan-2 also in the future. These accidents led to eight days’ and 15 days’ absence, respectively.

CEO Review Plant Construction Implementation Operational People and Financial status Reporting 24 and Strategy safety readiness quality readiness competence and governance principles Accidents at the Hanhikivi Accidents Fennovoima’s project site 2019 2018 personnel 2019 2018

Lost time injuries* 0 2 Lost time injuries* 2 0

Lost working days 0 5 Lost working days 23 0

Average severity of accidents Average severity of accidents 0 2.5 11.5 0 (as lost days) (as lost days)

Lost time injury frequency rate 0 4.04 Fatalities 0 0 (LTIFR)** Two accidents, of which the Investigation of accidents and Fatalities 0 0 investigations are finalized No accidents near misses but not within the time limit. Two accidents, one of which Investigation of accidents and No accidents was investigated within High risk work No No near misses the time limit.

High risk work No No

* a) First-aid-level injuries are not included in the IR; b) fatalities are included in the IR; **LTIFR is calculated by number of lost-time accidents per million hours c) “lost day” indicates the loss of one full work shift; d) “days” means scheduled work worked. A lost-time accident is an accident that causes an absence from work days; e) count begins from the day after the accident (one full work shift). If the injured of at least one work shift. person is treated on the day of the accident and he/she returns to work on the next day, the injury is reported as a first-aid case. You may find more information regarding our OHS practices from our website: www.fennovoima.fi/en/responsibility/occupationalsafety

CEO Review Plant Construction Implementation Operational People and Financial status Reporting 25 and Strategy safety readiness quality readiness competence and governance principles ENVIRONMENT stage of the construction project, impor- monitoring rounds, for instance, in waste Permit matters The Hanhikivi 1 project is a positive climate tant environmental risks include chemical and chemicals processing practices and In April 2019, the Supreme Administrative action, the effects of which will be realized and oil leaks, the spread of turbidity in the the prevention of minor oil leaks. Court issued its judgement on complaints during the decades of electricity produc- sea, and noise during blasting. We update filed against Fennovoima’s environmental tion without emissions that are detrimental our risk register four times a year. The authorities also carry out regu- and water permit. The Supreme Adminis- to the climate. Before commissioning, lar inspections of our procedures. The trative Court rejected all complaints, and Fennovoima’s direct environmental impact All contractors working in the project Centre for Economic Development, the permit is legally valid. The environmen- is mostly related to the construction work area comply with a comprehensive risk Transport and the Environment (ELY tal and water permit applies to operations carried out in the plant site. assessment and risk management pro- Centre) performed a periodic inspec- and emissions during the operation of cedure. Furthermore, everyone working tion related to the nuclear power plant’s Fennovoima’s nuclear power plant, as We ensure that all work on the Hanhikivi at the project site must be aware of the environmental permit in October. Based well as the intake of cooling water. headland is carried out in accordance special characteristics of the Hanhikivi on the inspection results, the ELY Centre with environmental legislation and the headland’s natural environment, the required actions to be taken to ensure In 2019, we continued with the prepara- permit conditions, and that the envi- access limitations in the area, as well as retention of the natural water level of a tion of the nuclear power plant’s chemical ronment and the wellbeing of the local the environmental guidelines established gloe lake on the shore. According to the permit application. Such a permit is residents are respected during con- for the construction site. inspection results, site operations are in required for large-scale processing and struction work. Our ISO 14001 certified good condition, and no major deficien- storage of hazardous chemicals during environmental management system is an Project area is monitored with care cies were detected. the operation of the nuclear power plant. important tool in this work. We monitor the progress of contracted work together with RAOS Project during Environmental impact Management of the environmental weekly site monitoring rounds, and we management 2019 2018 impact at the Hanhikivi 1 construction assist the contractors in better manage- site is based on proactive identifica- ment of environmental matters. We also Violations of permit conditions No No tion of environmental risks. We assess perform monthly targeted environmental environmental risks for the Hanhikivi 1 inspections that focus on matters such Two violations: 1. Disturbance of the natural Violations of environmental water level of the gloe lake, 2. A leakage of construction site as a whole from the as fuel storage, oil spill prevention prepar- No violations laws and decrees waste water into the ground when canteen’s perspectives of environmental impact, edness, or dust prevention methods. In broken waste container was lifted. legislation, and permit conditions. At this 2019, we steered contractors during these

CEO Review Plant Construction Implementation Operational People and Financial status Reporting 26 and Strategy safety readiness quality readiness competence and governance principles OBJECT RESULTS IN 2019 MONITORING METHOD Environmental monitoring

No increased volume of dust outside the project area. We monitor the quality of the air, Air quality Five monitoring points Environmen- especially in close proximity to nature conservation areas. Noise was caused especially by piling work in the cooling water discharge area. The recommended values Seven measuring points; the were exceeded several times, both during the day and at night. The average noise level at the different Noise one closest to residential areas is measuring points in 2019 was 30–68 dB (30–68 dB in 2018). A level of 30 dB corresponds to the sound of a approximately 1 km from them. tal impact whisper, and 65 dB corresponds to a normal speaking voice or laughter.

Monitored five times a year with Seawater No changes in water samples caused by construction activities. water samples taken from ten monitoring quality measuring points.

Monitoring using continuous meas- There are extensive protected seashore Monitoring revealed a natural increase in turbidity due to heavy rain and storms. The values exceeded five times urements takes place. There are the limit where work must be interrupted, but no water construction work was in progress at the time. Break- meadows, overgrowing shallow bays, and Turbidity five measuring points around the waters that are currently under construction, a protective embankment built in the sea to prevent the spread of Hanhikivi headland and two in the gloe lakes, which have become isolated turbidity, and a protective curtain placed in the water limit the spread of turbidity from the construction area. marine spoil disposal area. from the sea on the Hanhikivi headland. There is a Natura 2000 conservation area Total fish catch, species-specific fish catches, and average lengths of the fish species were studied. On the basis of the data collected, no changes that were clearly caused by water construction work could be Fish approximately two kilometers from the detected in the structure of the fish stock. The most significant detected change deviating from the refer- Follow-up study stock plant area. Areas of high natural value have ence area was a reduction in the average size of roach. The underlying reason may be that larger roaches that feed on the bottom have moved away from the area. been left outside the plant area already at Subcontractors report all accidents the construction planning phase. Oil and to Fennovoima or RAOS Project in chemical No significant oil or chemical leaks occurred in the project area. accordance with the construction leaks We monitor the state of the environment site responsibilities. together with RAOS Project in accord- ance with a jointly agreed environmental Protected species and nature conservation areas monitoring program. In addition to the Spreading of reed beds in the seashore meadows was detected. Occurrences of Siberian primrose Seashore environmental monitoring required by have declined. Due to this observation, the status of all occurrences will be studied in more detail Follow-up study meadows the permit conditions, we also carry out when Siberian primrose flowers in 2020. voluntary monitoring of the environmen- Changes in the water level of a gloe lake were detected in August. An investigation and related actions were immediately initiated. According to the observations made, a nearby clarification basin could be the tal impact. This allows us to ensure that Gloe lakes Annual follow-up underlying reason behind the rise in water level. The use of the settling basin was discontinued and it will be we have comprehensive knowledge of retaken into use once we are sure that the natural water level fluctuation in the gloe lake has been ensured. the state of the environment in the Han- No significant changes were detected during the studies. The number of moor frogs had slightly Relocated hikivi headland. decreased from the previous years, but the change is assumed to be a result of the dry summer. Further- Annual follow-up species more, the follow-up study was realized later in the summer than in the previous years.

CEO Review Plant Construction Implementation Operational People and Financial status Reporting 27 and Strategy safety readiness quality readiness competence and governance principles Environment is taken into account in plant design

We ensure that all work in the project area on the Hanhikivi headland is carried out in a manner that ensures environmen- tal protection and the wellbeing of the local residents. The Construction waste is utilized as energy same principle will also apply to the operational phase of the or material plant; this is ensured through the plant design. Efficient sorting and recycling, as well as appropriate processing, are important parts There are approximately fifty environmental permit require- of the management of the environmental ments for the plant. Some of them are extremely detailed, impact of the waste generated on site. while others are more general in nature. The requirements involve water supply, emissions into the water and air, noise, Contractors must sort the waste in their the processing of waste, chemicals and chemical releases, as Paula own work areas before transporting it to well as the monitoring of the environmental impact, for example. Saavalainen the project area’s sorting locations. Con- The thermal load from the cooling water in the immediate vicinity EHS Specialist tractors must also manage the processing of the plant is the plant’s most significant environmental impact. and storage of hazardous waste in accord- ance with the applicable regulations. Changes caused by the progressing plant design and amend- updated environmental permit from the authorities whenever Despite instructions, we still detected ments to environmental legislation impose their own challenges necessary. Keeping up to date and submitting permit applica- negligence in the processing and sorting on the management of environmental requirements. tions at the correct time is of utmost importance. of waste at the construction site. We addressed the issue during the weekly site We applied for an environmental permit fairly early on in the The practical management of environmental requirements – as monitoring rounds and inspections, pro- process, which means that changes made in the plant design with the management of any requirements – is the combined viding feedback and further instructions will also influence the environmental requirements. Further- effort of a large group of experts, and we are continuously on procedures that meet the require- more, some legislative amendments have been made since developing our practices to ensure smooth cooperation. As an ments set out in the waste management the submission of the permit application. This means that we environmental specialist, my duty is to assist the experts who guidelines for the project area. In 2019, we must continuously check the compatibility of the plant design, review the plans in understanding the environmental require- also posted experts in the waste sorting statutory requirements, and permit conditions. We apply for an ments and ensure that those requirements are met. areas to supervise and assist the contractors in the sorting of waste.

CEO Review Plant Construction Implementation Operational People and Financial status Reporting 28 and Strategy safety readiness quality readiness competence and governance principles Utilization of construction Waste generated in the 2019 2018 Hanhikivi 1 project area Metric tons (t), Metric tons (t), waste as material or energy % of waste % of waste in 2019 Construction waste, including 217 (75%) 526 (80%) - Wood waste 52 (24%) 123 (23% ) 100

90 - Energy waste 53 (24%) 120 (23%)

80 - Concrete and brick waste 19 (9%) 50 (10%) 70

60 - Bitumen 31 (14%) 0 (0%)

50 - Mixed construction waste 16 (7%) 63 (12%) 40

30 - Combustible waste* 10 (5%) 9 (2%) 20 - Other waste** 36 (16%) 161 (31%) 10

0 Hazardous waste *** 71 (25%) 160 (20%)

April May June July March August January February October September November December Total 287 (100%) 686 (100%)

Utilized as material % Utilized as energy % Most of the waste generated at the construction site is regular construction waste: metal, Our goals are to utilize 70% of our construction waste as materials and to utilize a total of 90% of our con- wood, concrete, rocks, biowaste, paper, cardboard, glass, or electrical and electronic waste. struction waste either as materials or in energy production. We reached the overall goal (the total annual Our partner Remeo is in charge of transporting the waste from the site and appropriately utilization rate was 98%), but the material utilization rate for the entire year remained at 55%. Spoil and processing it. Fluctuations in annual waste volumes are due to fluctuations in construction rubble generated during excavation, rock blasting and dredging are utilized as filling and levelling materi- work in progress. * Combustible waste includes combustible material that cannot be recy- als at the construction site as far as possible. cled as material or energy, e.g. rubber, leather and aluminum packaging. ** The category “Other waste” includes metal, paper, cardboard, glass and biowaste that is recycled as mate- rials. *** Hazardous waste includes, for example, waste oil, filters, batteries, oily rock material, and electrical and electronic waste.

CEO Review Plant Construction Implementation Operational People and Financial status Reporting 29 and Strategy safety readiness quality readiness competence and governance principles LOCAL IMPACT OF THE HANHIKIVI 1 The construction of the new nuclear The construction work also has some Support for the nuclear power plant PROJECT power plant has a significant impact on negative effects on the living environ- project strengthened The Hanhikivi 1 project has an impact on the the regional economy and employment ment, such as increased volumes of According to a survey carried out by Nor- living environment and everyday life in Pyhä- rate. The construction project generates heavy traffic and temporary turbidity stat Finland Oy in October and November, joki and in the neighboring municipalities. new investments, creates jobs in the in the seawater caused by water con- 76.5% of the residents of Pyhäjoki are in Active participation in regional development region, and increases tax revenue. With struction work. Some of these negative favor of the Hanhikivi 1 project. A total of together with public, private and third-sector the increasing number of residents and impacts cannot be avoided, but we 71.1% of the residents in the entire survey improves the area’s capabilities to prepare stable municipal economy, the selection openly communicate about the work in area have a positive attitude towards the region for changes brought about by the and availability of public and private progress and any disturbances that it is the project. Support for the project has project, including the increased number of services in the region improves, which expected to cause. strengthened the most in Raahe. residents and the volume of services needed. benefits all local residents.

CEO Review Plant Construction Implementation Operational People and Financial status Reporting 30 and Strategy safety readiness quality readiness competence and governance principles Local support for the project The number of jobs is increasing % Pyhäjoki Pyhäjoki and the neighboring municipalities 90

110 Total number of jobs, year 2006= 100 80 76.5% Pyhäjoki +7% (+59) 70 105 71.1%

60 Finland +1% 100 (+13,942)

50 Control group -4% 95 (-1,487) 40

30 90

20 85

10 Information source: Statistics Finland 80 2011 2017 2013 2012 2015 2014 2016 2010 2007 2008 2009 0 2006 2008 2009 2010 2012 2013 2014 2015 2016 2017 2018 2019

Development of support for the project in 2008–2019 in Pyhäjoki, and in The number of jobs in Pyhäjoki started to increase in 2016. Control Pyhäjoki and the neighboring municipalities (Norstat Finland Oy). group = Kalajoki, Alavieska, Siikajoki, Haapavesi, Siikalatva, Ylivieska, Merijärvi, Oulainen, and Raahe.

CEO Review Plant Construction Implementation Operational People and Financial status Reporting 31 and Strategy safety readiness quality readiness competence and governance principles Effects of the Hanhikivi 1 project are visible in the area

“The project has boosted “Positive thoughts. I “I've heard that the pro- the vitality of the area. Also, wouldn't have moved ject has had a significant the municipality, companies back to my home town impact on the livelihood and entrepreneurs have if there wouldn’t be of entrepreneurs as they been actively involved. It work for me here now.” have got Fennovoima as has brought more jobs and Man from Pyhäjoki, their client.” other positive effects.” 15-29 years old Man from Pyhäjoki, Woman from Pyhäjoki, 30-44 years old 45-59 years old

“Nuclear power is generally good because it’s emission-free. “My son studied engineering “There is some residential But of course, when you think with the idea that maybe there construction going on about nuclear waste, it makes will be a job for him in the pro- in Raahe. Preparations you wonder. However, I don’t ject. The employment effects have been made. The want to rail against the project. are of interest to us. It remains construction of the power I would feel disappointed if the a question if the project will plant has been seriously whole process falls flat.” be completed, since there has delayed, however.” Woman from Pyhäjoki, been opposition as well.” Man from Raahe, 45-59 years old Woman from Kalajoki, over 60 years old over 60 years old

Excerpts from the open responses to the opinion poll conducted by Norstat Finland Oy in October-November 2019.

CEO Review Plant Construction Implementation Operational People and Financial status Reporting 32 and Strategy safety readiness quality readiness competence and governance principles Pyhäjoki is ready GUEST WRITER Helena Illikainen Economic Development Director for the challenge Municipality of Pyhäjoki

Pyhäjoki has been preparing itself for the izations to be actively involved in the schedule has offered the municipality of start of the construction of the nuclear process of greeting the newcomers, who Pyhäjoki and the entire area more time power plant on all fronts for several years. are also potential new members. to prepare and the residents more time At present, we have several ongoing to adapt to the situation. I believe that projects that are preparing us to receive It is clear that the future of Pyhäjoki would this has honed our skills and made us a the new companies and residents without not be bright without the Fennovoima better, more responsive municipality. compromising the needs and wellbeing project. Pyhäjoki would be just another rural can cope with such a large project. It of the current residents of Pyhäjoki. We municipality where people are aging and the Fennovoima is a visible actor in the area, absolutely can, and can even do it well. have constructed new infrastructure, birth rate is decreasing. The new residents and cooperation with Fennovoima’s A small organization can also be an developed the downtown area, and zoned will use the services in the area and bring employees is varied and smooth. In my advantage. All of us at the municipality new residential and commercial sites; for in revenue in the form of rents to private opinion, the increased support for Fenno- work under the same roof, which means example, the construction of approxi- persons and the municipality, for example. voima is a clear result of the company’s that communication is smooth and coop- mately 350 homes will start very soon. Real estate tax will become a hefty source of open and transparent actions. Further- eration is tight. Sector borders are not income for the municipality, which will com- more, difficult issues have not been swept narrow or restrictive. I’m eagerly waiting We have also developed community pensate for the funds invested up-front by aside; in most cases, they have been for the time when the first thousand integration services to ensure that we the municipality in the preparations. integrated into the discussion. The fact or two thousand construction workers can serve the people who have decided that local associations and organizations arrive. We will probably be working long to move or are considering moving here The atmosphere in Pyhäjoki is peaceful are supported through sponsorships also days then, dealing with a multitude of as comprehensively as possible, while and expectant. The consistent commu- indicates to us that Fennovoima wants questions and expectations flooding in supporting the current residents in adapt- nications by Fennovoima and the plant to be part of the community and bear its through all doors and windows. We are ing to the change. We can assist people supplier on the schedule and news on social responsibility. The municipality also ready for it. in finding a home, help their spouses to the progress of the project have been wants to be a responsible organization in find a job, and help with interpretation happily received. Perhaps we have also the comprehensive cooperation network Most of the residents, the municipality of between Finnish and foreign languages become used to the fact that schedules that has sprung up around the project. Pyhäjoki, and Fennovoima all have the when they are communicating with the are changed and specified along the way same goal – we want the Hanhikivi 1 pro- local service providers, when needed. We in the case of a large-scale project. On the Sometimes I hear someone on the out- ject to be as successful as possible, and encourage local associations and organ- other hand, the delay in the construction side ponder whether a small municipality we will all work together to reach this goal.

CEO Review Plant Construction Implementation Operational People and Financial status Reporting 33 and Strategy safety readiness quality readiness competence and governance principles Imple- Plant Construction Operational safety readiness mentation readiness quality

Implementation quality

By high-quality implementation of the nuclear power plant, we mean that the plant is safe, complies with Finnish legislation, regulations and the plant supply contract and produces the agreed volume of electricity. Supply chain readiness is one of the key factors in ensuring high-quality construction of the plant.

CEO Review Plant Construction Implementation Operational People and Financial status Reporting 34 and Strategy safety readiness quality readiness competence and governance principles High-quality implementation requires a high-quality supply chain

By high-quality implementation of the plant, accordance with the requirements and plant have been selected and approved by we mean that the plant is safe and complies being capable of ensuring that their supply us. The determination of roles in the I&C with Finnish legislation, regulations, and the chains also comply with the requirements. supply chain must be completed as soon as plant supply contract, as well as produces It is also in our best interest that everything possible so that technical design can start the agreed volume of electricity. Related goes smoothly and efficiently in the supply and we can compile the related construc- to all of this, there are a lot of matters that chain and there are no delays. However, tion license documentation– otherwise I&C need to be achieved before we are ready to there is still work to be done in all of this. design could become a bottleneck for us. start the construction of the plant. The most challenging aspect is that there We have established a new quality control are several subcontractors in the I&C supply Supply chain readiness is one of the key unit in the Fennovoima organization and chain already at this early stage. We will factors in ensuring high-quality construc- reorganized component design and qual- strive to simplify the supply chain to deter- tion of the plant together with the plant ity specifications in accordance with their mine the responsibilities and supervision supplier and subcontractors participating safety significance. The plant supplier has methods in the supply chain as accurately in the construction and manufacture of also implemented this approach based on as possible. This will facilitate the manage- plant components. Performance of the safety classes. ment of the implementation process. plant supplier’s supply chain and quality management in accordance with the At present, we are in the process of har- All in all, both us here in Fennovoima and safety significance are key development monizing the monitoring and supervision the plant supplier are on the right path in areas in terms of the readiness. procedures used in component manufac- terms of supply chain management. We ture with the plant supplier. The goal is to discuss the available options with the plant We aim to ensure that the plant supplier determine sufficient supervision methods supplier and plan the operations together. and the main contractor have good for all safety-classified components and We still have plenty of work to do, however, understanding of the plant’s availability structures. to make the supply chain compliant with Jouni requirements and the Finnish quality the Finnish requirements so that we can Takakarhu requirements and procedures. Another As the I&C supplier has now been selected, start construction as soon as the construc- Project Director essential factor is them operating in all the main suppliers for the Hanhikivi 1 tion license has been granted.

CEO Review Plant Construction Implementation Operational People and Financial status Reporting 35 and Strategy safety readiness quality readiness competence and governance principles SUPPLY CHAIN MANAGEMENT ties in accordance with the safety classes. contract, all the main suppliers for the Han- vices of the construction of the Hanhikivi The most important aspect of a nuclear This also verifies correct allocation of the hikivi 1 project have now been selected. 1 nuclear power plant. power project’s supply chain manage- requirements in the of supply chain and ment is ensuring safety. Deliveries that allows us to specify adequate control Furthermore, two companies were The manufacture of plant components are important for safety are subject to a methods for all of the plant’s safety-classi- approved as the fuel assembly suppliers started with the manufacture of the tur- higher number of requirements that are fied components and structures. and one company was approved as the bine generator rotor in Japan. also stricter than the requirements set for supplier of zirconium alloy products in deliveries which have no nuclear safety Other important focus areas in the the supply chain of the fuel supplier TVEL. We audited all subcontractors of the Han- significance. work have been assessing the suppliers’ In the supply chain of the plant supplier hikivi 1 project that are significant to nuclear resource management and qualifications, RAOS Project, the scope of supply of the safety. We also participated as an observer Such deliveries can only be acquired as well as ensuring that the plant supplier main designer Atomproekt was expanded in nearly all of the audits performed by the from suppliers who have prerequisites for and the main contractor have internalized to also cover designer supervision ser- plant supplier on its subcontractors. operations that meet the statutory safety the Finnish and European nuclear con- requirements and who have adopted struction requirements. FENNOVOIMA’S SCOPE audited quality management and quality OF SUPPLY 2019 2018 2017 assurance procedures. In 2020, the experts in Fennoforum 3 will focus on the further development of the Subcontractors total 329 273 184 Established in spring 2019, the duty of the above-mentioned control plan and assist Fennoforum 3 working group is to verify the plant supplier in the development of Of whom Finnish 82% 83% 84% that the supply chain and its manage- supply chain control plans. ment will be ready at the appropriate time to start the construction phase. In 2019, Development of the supply chain RAOS PROJECT’S SCOPE the working group started the creation of in 2019 OF SUPPLY 2019 2018 2017 functional assessment models based on The French company Framatome SAS and the safety classes for the most important Siemens AG were selected as the main Subcontractors total 904 754 524 suppliers. I&C suppliers. According to the contract, Framatome will supply the safety auto- Of whom Finnish 80% 80% 80% Delivery requirements are divided into mation systems and Siemens will be the clear and understandable technical enti- operational I&C systems supplier. With this The tables include all subcontractors approved for the supply chains by the end of 2019.

CEO Review Plant Construction Implementation Operational People and Financial status Reporting 36 and Strategy safety readiness quality readiness competence and governance principles Ethical requirements apply to all Supply chain suppliers of the Hanhikivi 1 project Socially significant ethical issues involving the supply chain, such as anti-corruption, assessments human rights obligations, and the man- agement of environmental matters are guided by means of contractual terms, We actively monitor the development of the plant supplier’s Tatu Hietala verified by means of audits, and also taken supply chain. Last year, we used a new assessment method to Supply Chain into account in project planning. All the assess the performance of key actors in the supply chain with Manager key participants in the project must also the goal of identifying the suppliers’ most urgent and most have an environmental management system demanding development areas. Assessed aspects included compliant with ISO 14001, and an occu- for example management, ERP systems, processes, quality pational health and safety management operations, certificates, and facilities. The assessment method system that meets the requirements of we use is very illustrative and enables us to create an overall OHSAS 18001 or ISO 45001. picture of the status of each supplier and also the status of different entities of the supply chain. We conduct a pre-evaluation of ethical conduct that is implemented as part of As expected, the assessment results indicated variation in the supplier pre-selection queries for compa- readiness and development areas of the suppliers. For exam- nies who wish to be part of Fennovoima’s ple, many of the suppliers still need to develop their resource direct supply chain. In 2019, we carried allocation and their understanding of the requirements, while out ten compliance and ethical conduct the facility readiness of many of the suppliers is at good level. audits as part of our more extensive In 2020, we will carry out a more detailed supply chain assess- audits. For the assessment, we gather Cultural differences are still clearly visible, particularly at the ment covering all suppliers significant in terms of nuclear information about the potential contrac- project site in the Hanhikivi peninsula, in the safety culture, safety. On the basis of the assessment results, we will set goals tual partners’ policies, codes of conduct, work supervision, and recruitment of construction employees, linked to the project’s intermediate milestones for each of the oversight procedures and violations, for example. We are working hard to guide the main contrac- important suppliers and create them development plans cov- among other things, with regard to mat- tor, in particular, so that they could reach the level of readiness ering the observed development areas. This is to ensure that ters such as anti-corruption, securing required to start the construction of the plant. We are of the the different parties active in the supply chain will be ready to human rights and managing occupa- opinion that the operations have slowly proceeded in the deliver the components included in their scopes of supply or tional safety and environmental matters. correct direction. to start construction at the right time. Safety culture in the supply chain We continuously monitor the level of safety culture in the supply chain. The

CEO Review Plant Construction Implementation Operational People and Financial status Reporting 37 and Strategy safety readiness quality readiness competence and governance principles safety culture of the project’s main contractor Titan-2 has been monitored Inspection operations with special care due to deficiencies observed at the project site. Titan-2 has clearly improved its actions to develop Now, as I look back at the past year, I can only state that Fen- the safety culture and to achieve an novoima and our operating model underwent quite a change open atmosphere at the project site. over the course of the year. The year had its fair share of speed Changing a company’s safety culture and dangerous situations. Most of the changes were positive. always takes time, however. At present, Titan-2’s approval as the main contractor Our quality inspection functions, for which I am responsible, is conditional. To renew our approval, we were also reorganized during the year. We gathered almost all require that the company provides more of our inspectors under the same roof to the inspection unit. evidence of the improvement of its safety The reform allows us to better verify the independence of José Martins culture, among other matters, by the our own inspections from the rest of the organization, and to Quality Control end of 2020. During this period, we will develop our operations. Manager increase our efforts to support and moni- tor Titan-2’s safety culture development. The inspection operations focus on verifying the compliance In their previous projects, RAOS Project and Titan-2 have used of concrete physical products or structures. The activity is a large number of different operating models that are not com- In addition to Titan-2, we conducted fairly black-and-white: the product being inspected either patible with the requirements of the Hanhikivi 1 nuclear power audited safety culture audits of the other complies with the requirements, in which case it is approved, plant. In addition to creating a coherent and holistic operating key suppliers – RAOS Project, AEM Tech- or fails to meet the requirements, in which case it is rejected. model, the plant supplier must assume a stronger position in nology (Kolpino), and Gidropress – in 2019. There is no middle ground. In accordance with the nuclear the control and supervision of the supply chain and the main Furthermore, RAOS Project conducted safety principles, we do not comment on how the product contractor, in particular. The ball is also in our corner, however, safety culture audits of Atomproekt and should be repaired. as we must be able to tell them what we want, when, and why. Atomenergomash. We participated in these audits as an observer. In addition to Fennovoima’s internal development, the inspec- We have yet to reach a mutual understanding on the oper- tion operations of the plant supplier and the main contractor ating model with the plant supplier and the main contractor, On the basis of the audit results and the need to be developed, and more inspection resources are but we are working hard at it. Our approach is more proactive safety culture observations we have made, needed. It has taken time for us to form a clear picture of than before: we strive to state as clearly as possible what we there is some variation in the safety cultures how the plant supplier and the main contractor perceive the want and what our expectations are, and to actively guide the of the project’s key suppliers. Many of the inspections and what kind of procedures they have. operations. companies still have plenty of room for development, but we also made some pos- itive observations. In general, the safety culture of the companies is improving.

CEO Review Plant Construction Implementation Operational People and Financial status Reporting 38 and Strategy safety readiness quality readiness competence and governance principles We assessed the strengths and weak- nesses of the companies’ safety cultures Manufacture of plant in accordance with our renewed safety culture model. The model that we further developed in 2019 is based on interna- main components tional guidelines of the IAEA and WANO, statutory requirements, and our own has started safety culture principles. It consists of twelve dimensions (including manage- ment, decision-making, and openness of The manufacture of the the turbine generator rotor was the atmosphere) that have been further started last fall beginning the manufacturing the plant’s main divided into several subdimensions. The components. The generator is one of the most important assessment model allows us to analyze the components in the entire plant, as it generates electricity by safety cultures of the companies and their converting the kinetic energy of the turbine into electrical development more accurately than before. energy. The generator rotor in turn, transmits that energy to the generator.

The rotor is an important component, but the start of its man- ufacture is also important for another reason: it has allowed us to clarify our practices to ensure that those support efficient Murat Agcay Tiina Partanen manufacture once the full-scale manufacture of hundreds of Project Manager, Turbine Island Director plant components starts all around the world. We have also generator and had the chance to further specify our expectations and the auxiliary systems criteria we will use to grant permission to proceed with the manufacture. variety of other matters. Meanwhile, we were also able to fine- It is clear that such a large-scale project will always include tune our cooperation practices with the different parties. both expected and unexpected challenges. Therefore, we must have at our disposal the practices needed to resolve By the way, due to the size and the mechanical and chemical these matters. Over the course of the period of two and a half requirements of the component, Japan Steel Works is the only years preceding the manufacture of the rotor, we resolved supplier in the world that is capable of forging the rotor. The – together with the parties involved – a multitude of matters generator is classified as a non-nuclear safety component, relating to the interpretation of requirements, manufacturing which is why its manufacture can be started already at the plans, management systems, manufacturing control, and a nuclear power plant licensing phase.

CEO Review Plant Construction Implementation Operational People and Financial status Reporting 39 and Strategy safety readiness quality readiness competence and governance principles Imple- Plant Construction mentation Operational safety readiness quality readiness

Operational readiness

We will be ready for the operation of the plant once the plant itself and the operating organization are ready for safe, cost-effective, and efficient operation of the plant.

CEO Review Plant Construction Implementation Operational People and Financial status Reporting 40 and Strategy safety readiness quality readiness competence and governance principles Kim Stålhandske Operational Preparing for commis- Readiness Miika Manager Hyvärinen sioning of the plant Maintenance Manager

We will be ready for the operation of novoima’s needs and development areas They will closely participate in different the plant once the plant itself and the related to the operational phase to obtain activities at the plant to get familiar with operating organization are ready for safe, a clear idea of all the key goals and duties. the entire plant and to learn how it works cost-effective, and efficient operation of Later on, we will also investigate the readi- in practice. Practical training with simu- the plant. In other words, the plant must ness of all external parties important for lators that are fully compatible with the meet the technical and safety require- the operation of the plant. plant is also extremely important when ments specified for it, be easily operable verifying the competence of the operat- and maintainable, as well as be capable of One of the most important factors influ- ing personnel. producing the agreed volume of electric- encing the successful commissioning of a ity. In addition to structural aspects, the plant is a competent organization. Organ- The organizational readiness must be organization’s readiness requires, above izational competence is continuously achieved in due time before the initial all, the correct competencies and func- developed throughout the project. At fuel loading. There are examples of tional processes. the planning phase, this means technical power plant projects elsewhere in the training realized by the plant supplier, world where the organization was not Our working group, Fennoforum 4, which for instance. All Fennovoima employees ready for commissioning once the plant focuses on the operational readiness of are obligated to attend the training. In was complete. Such situations have led the organization, convened for the first addition to training, the employees learn to considerable delays in the start of time in early December. Naturally, work a great deal when reviewing the plant electricity production and major financial to ensure readiness had been going on supplier’s design documentation. losses. Getting ready on time is extremely throughout the organization already important. In our opinion, we are pro- before the establishment of the working The plant’s commissioning and testing ceeding well on schedule in terms of the group. Fennovoima’s renewed strategy phases are especially important for the development of operational readiness. pays more attention to the preparation operation and maintenance personnel, as for operation at all organizational levels. these are the stages at which they need This year, we will focus on surveying Fen- to internalize the operations of the plant.

CEO Review Plant Construction Implementation Operational People and Financial status Reporting 41 and Strategy safety readiness quality readiness competence and governance principles PLANT AVAILABILITY Capacity factor is a figure which indicates the amount of time during a specific period Our capacity factor for which a plant or a component is capable of performing a required action. In the case of a nuclear power plant, the capacity factor goal is ambitious refers to the plant’s ability to produce elec- tricity to the network. The review period is We started an availability project together with the plant supplier Ville Määttä usually one year. last March, because we had noticed that we might have some chal- Project Manager, lenges involving achievement of the agreed plant capacity factor. Availability Maintenance At the plant design phase, we study avail- Every per cent of capacity factor is valuable, and the savings poten- ability in relation to time, i.e. for how long tial may amount to billions during the 60-year lifecycle of the plant. during the review period is the plant capa- ble of producing electricity to the network Traditionally, VVER plants in Russia have not achieved capacity hindering availability that would be extremely difficult or at 100% capacity. Availability depends factors similar to that required from Hanhikivi 1. Through continu- impossible to correct through design modifications at a on, for instance, planned annual outages, ous improvement, the Loviisa VVER plants currently in operation later point in time. From layout, we will gradually proceed to unplanned shutdowns, plant moderniza- in Finland have, however, reached a world class level despite the studying smaller entities all the way to the optimization of tions, and any major repairs that were not fact that they consist of older technology. Our capacity factor component-specific maintenance actions. Naturally, the impact scheduled in the maintenance planning. goal is highly ambitious – it is at the world class level. of any modifications of the smaller entities will have a smaller impact on the capacity factor. An availability project started during the first The current plant design does not correspond to the availability half of 2019 aims to verify that the Hanhikivi 1 requirements specified for the plant yet. We have therefore pro- We are also eagerly awaiting for what will possibly be the most nuclear power plant will produce at least the posed modifications to the plant supplier to improve the plant’s important document of the year, the first availability analysis volume of electricity specified in the plant availability. Above all, the modifications aim at improving the report which will analyze the design phase capacity factor of supply contract for its shareholders. During plant’s maintainability and shortening planned maintenance out- the Hanhikivi plant. This will be the first official capacity factor the year, we analyzed the availability of ages. The proposed modifications involve some of the systems of the plant. VVER plants based on operating experience and components to be purchased, for instance, and are based feedback data. We presented dozens of on methods, technologies, or practices that have been used and I’m confident that we will reach our capacity factor goal improvement proposals based on the analysis found functional in nuclear power plants elsewhere in the world. despite the fact that we detected the availability challenges results and the expertise of our employees to regrettably late. I’m more confident because the plant supplier further improve the availability of the plant. Plant design is proceeding at a fast pace. The farther the design is committed to finding solutions to the availability issues. The proceeds, the more challenging the implementation of any benefits from improved availability are mutual – we will reach We will continue to analyze the modifica- changes important in terms of availability will become. In 2020, our availability goals and the plant supplier will end up with a tions and the key analysis object in 2020 we will ensure that the plant layout does not include any factors better plant design. will be availability of the plant layout. As part of the analysis, e.g. a plant maintainability analysis will be carried out.

CEO Review Plant Construction Implementation Operational People and Financial status Reporting 42 and Strategy safety readiness quality readiness competence and governance principles Simulator preparations

The simulator preparations for the do in case of a transient fault or accident. Topi Tahvonen Hanhikivi 1 nuclear power plant are pro- This will enable us to be prepared for even Simulator Expert ceeding and the prospective simulator the most unlikely situations in advance. supplier performed simulator quality The development simulator will be used planning in 2019. We have received a particularly to develop the control room description of the implementation stages operations and test the control room user of simulator design, and we expect to interfaces. The testing simulator, on the receive the quality planning documenta- other hand, will be used to test automa- tion as a whole for review soon. tion as part of factory acceptance testing before the delivery of the I&C of the plant. The simulator delivery related to the Han- hikivi 1 nuclear power plant will consist More detailed simulator design can start In addition to the simulator design, I of a total of three separate simulators: once the simulator supplier has been participated last year in the review of the the training, development, and testing selected and the design of the plant plant’s safety design in terms of the con- simulators. The training simulator will be (incl. the control room) has reached a trol room user interfaces and the plant’s used to train the control room operators. sufficiently detailed level. State-of-the- functional structure, which are part of my An exact copy of the plant’s control room art technology will be used in the plant area of responsibility. However, an impor- will be created in this simulator so that simulators, and the simulation models tant part of the year and a great source the operators can be trained in the opera- will correspond to the design of Hanhikivi of pride for me personally was the fact tion of the plant as if they were inside the 1 plant. The behavior of the plant can that I was mentoring a student preparing actual control room. Simulations are an therefore be very accurately simulated his master’s thesis. My mentee graduated extremely important part of control room whereby the training and test situations late in the year after having completed operator’s training. In addition to the are realistic. The training simulator must his master’s thesis on modelling of the normal operation of the plant, the training be ready for training 18 months prior to I&C architecture, and is now working here simulator will be used to practice what to the initial fuel loading. in Fennovoima’s I&C team.

CEO Review Plant Construction Implementation Operational People and Financial status Reporting 43 and Strategy safety readiness quality readiness competence and governance principles People and Competence

Committed and competent personnel is a prerequisite for the success of the Hanhikivi 1 project. Fennovoima’s organization and its competencies must meet the statutory requirements set for each project phase. Our strengths in the global competition for nuclear power professionals are the interesting and challenging work, the opportunity to get involved in developing new nuclear power company operations and grow as a professional in a caring and encouraging work community.

CEO Review Plant Construction Implementation Operational People and Financial status Reporting 44 and Strategy safety readiness quality readiness competence and governance principles ORGANIZATIONAL STRUCTURE Oversight Director, Communications Director, SUPPORTS SUCCESS Chief Information Officer, and Chief Legal A major reform of the organizational struc- Officer also started their work in the man- Fennovoima employees 345 ture and operating methods was carried agement team during the course of the year. In Helsinki 282 out in 2019 in a development project called Fennovoima Reprogrammed. The organiza- Personnel commitment and retention In Pyhäjoki 63 tional change aimed at clarifying internal improved from 2018 by 3.1 percentage points. responsibilities, roles, and decision-making, The voluntary employee turnover rate was Female 30% Male 70% as well as promoting in-house cooperation. 10.4% in 2019. The average number of personnel Furthermore, the decision-making structure over the course of the year was 342 people. Average age of the was made more versatile and flattened. Our recruitment needs for 2019 were mod- employees 42.6 years The new organizational model was intro- erate, and the focus was on longstanding duced in April, and most of the changes nuclear power expertise in technical and Personnel total, including internal were completed by the end of 2019. Most project management positions. Many of consultants 417 recruitments to new supervisory positions the open positions were filled by means created by the structural change were made of internal job rotation. In a manner typical from within Fennovoima’s own organization. for project-natured operations, we comple- New permanent employees 56 mented our organization’s expertise with Based on feedback provided by the consultants working together with our own Growth of the organization at the end of employees, the changes support the personnel. We will continue to strengthen the year 32 people work and success in it, clarify the roles, our organization’s internal competencies in and improve cooperation, but there is still the areas of automation, quality control, elec- Outgoing employees 36 room for development in internal commu- trical, power plant, and turbine technology, Voluntary employee turnover 10.4% nication within the organization. We will nuclear safety, and project management. (2018: 13.5% and 2017: 9.6%) continue the development work according to the agreed organizational structure. We strive to hire new personnel who can start their work directly at the Hanhikivi Average training hours 43 Recruitment and personnel changes project area. We will provide all of our (2018: 50 hours) Timo Okkonen, DSc (Tech), was nominated as employees with flexible ways of working in Chief Operating Officer in April. He has been in Pyhäjoki. We have worked in close coop- We rewarded a total of 26 employees for their charge of the reprogramming of Fennovoima eration with the region’s municipalities for excellent work with a sum corresponding to their salary for one month. and serves also as the Interim CEO as of several years to ensure that the transfer of November 1, 2019, following the resignation our personnel and their families to the new of Toni Hemminki. A new Project Director, region will be as smooth as possible.

CEO Review Plant Construction Implementation Operational People and Financial status Reporting 45 and Strategy safety readiness quality readiness competence and governance principles LEARNING ORGANIZATION We support continuous learning of our Competence devel- employees by a variety of means. We have several training courses that are manda- tory for all employees, and we also provide opment is based many voluntary courses to support the employees’ professional competencies. on the needs of the Visits to the Hanhikivi plant area are also an important part of getting familiar with the pro- ject. VVER plant technology training arranged organization and the by the plant supplier will continue in 2020. In addition to the in-house training courses employees and training outside the company, learning by experience is essential in the nuclear At present, our most important task is to ensure and verify that Emmi Päivikki power industry. Fennovoima engineers, in Fennovoima has sufficient competencies for the construc- Hanhimäki Aarni particular, visit peer companies to observe tion phase. Meanwhile, we are preparing for the competence Development HRD Manager how other nuclear power companies requirements of the operational phase. Manager, General operate in different parts of the world. Such Training visits are organized by the World Associ- The planning of competence management is based on ation of Nuclear Operators (WANO), for competence model that we have developed for the needs of example. Furthermore, several Fennovo- Fennovoima and the plant. It describes Fennovoima’s key com- and that it corresponds to the needs of the organization and ima employees participate each year in a petence areas at each project phase. The model is also used as the employees. complementary training course on nuclear the framework when reviewing the adequacy of the resources, safety and nuclear waste management that competencies, and development areas of the different teams. As part of the implementation of SAT, we are developing our is for all operators in the nuclear industry. When necessary, we support the teams by training, recruiting methods of assessing the quality and effectiveness of training. new personnel, or by providing them with consultants to sup- This is a difficult, but important, step in the management of In fall 2019, we adopted a new compe- port their work. personnel competencies. Meanwhile, we are also develop- tence management system that provides ing our online training portfolio to better correspond to the us with better tools to help our personnel We are about to switch to a systematic approach to training project’s needs. Furthermore, we have divided our annual per- in developing themselves professionally (SAT) in the planning and development of training. It is a well- sonal development discussions into two stages. The change and to monitor their performance. In early known five-tier method recommended by the international allow the supervisors and us to better support people in their 2020, we replaced Competitiveness Pact nuclear industry organizations WANO and IAEA. It allows us to work and their wellbeing and to boost the professional devel- working hours with a new practice where ensure that the training we offer is current and of a high quality, opment of the employees. we encourage the employees to use the

CEO Review Plant Construction Implementation Operational People and Financial status Reporting 46 and Strategy safety readiness quality readiness competence and governance principles 24 annual Competitiveness Pact hours to development discussions and personnel According to the Työvire survey carried supervisors to pay special attention to their develop their competencies or do volun- satisfaction surveys. out in the fall, 67% of the employees have own wellbeing and the wellbeing of the others. tary work in compliance with Fennovoima’s good or excellent work motivation (72% responsibility principles. In early 2019, we carried out a workplace in 2018). The total occupational wellbeing survey focusing on health effects of the score was 3.8, which is the same as in 2018. Personnel HIGH PERSONNEL WELLBEING work and the workplace. With the survey, The survey provides an overall idea of occu- By investing in wellbeing at work and a good the occupational health care provider pational wellbeing, safety at work, and the wellbeing working atmosphere, we also support assessed health risks, physical and psy- mental and physical stress caused by the work. productivity, commitment, and motivation. chosocial factors contributing to work 5% A functional organizational structure, load, and the work arrangements. The New working hour model 6% 5% high-quality management practices, and project-natured work and the project We want to offer our employees the 6% opportunities for professional development, delays were reflected in the results. On opportunity to do their work flexibly, and among other similar factors, are the key to the other hand, the employees felt that we want to support location-independent a prosperous workplace community. they could influence their own work and work. In 2020, we will introduce Fennovo- 22% 22% 43% were supported by their supervisors. ima’s new working hour model in stages. 3.83.8 43% Top and middle management, employees, They also considered the training and It will provide the maximum working GoodGood and the occupational health care services development opportunities provided by hour flexibility allowed by working hour develop wellbeing together as a shared the organization good. legislation and the collective labor agree- effort. The occupational health and safety ment: we will, for instance, further extend committee, OHS representatives that the In the summer, we also arranged a health our flextime and shorten the permanent 24%24% personnel elect from amongst themselves, survey for all employees in coopera- working hours. Work done outside the and a personnel representative are also tion with our occupational health care workplace will also be included in the involved in the planning and implementa- provider. The response rate was 63%. working hours. oooo tion of actions to promote wellbeing. The occupational health care provider aiai contacted all employees whose results The more freedom the employees have to atiatoy atiatoy We monitor wellbeing indicated the need for a health check. decide upon their own working hours, the oo We monitor the wellbeing of our employ- Personal treatment plans were designed more responsibility they carry on their oo ees through, for instance, personal for the employees as necessary. own wellbeing. That is why we instruct ellent ellent

CEO Review Plant Construction Implementation Operational People and Financial status Reporting 47 and Strategy safety readiness quality readiness competence and governance principles First safety culture self-assessment

Good safety culture is about respecting Both development areas and strengths Research Centre of Finland in 2017. VTT’s safety, having the right understanding of were identified with the self-assessment. assessment stated that the level of Fen- safety and dangers, being alert, bearing The observed development areas novoima’s safety culture is adequate. your responsibility, and ensuring that included the need to clarify roles and there are good prerequisites for work- responsibilities, to strengthen leadership The development and assessment of the ing, among other things. Structural and for safety, and to improve cooperation and safety culture will continue throughout technical factors in the organization also information flow within the organization. the lifecycle of the nuclear power plant. influence the safety culture. Identified strengths of the organization Changes do not take place overnight: are the possibility to report observations they require time. The most important In early 2019, we carried out Fennovoima’s and thus assist the organization in learn- aspect is that the safety culture must first safety culture self-assessment. The ing, opportunities linked to the Fennovoima not be merely empty words, but an inte- assessment method we used is based on Reprogrammed development program, grated part of the organization’s daily the safety culture framework of the Inter- good atmosphere at work, and support operations and management. national Atomic Energy Agency (IAEA) for employees in the development of and Fennovoima’s own safety culture their competencies. principles. Praise should also go to Fenno- voima’s own safety culture ambassadors, On the basis of the results, we were able who were responsible for the practical to determine that Fennovoima’s safety implementation of the self-assessment culture has somewhat improved since an Karolina Wrona with the help of a safety culture specialist. independent assessment by VTT Technical Safety Culture Specialist

CEO Review Plant Construction Implementation Operational People and Financial status Reporting 48 and Strategy safety readiness quality readiness competence and governance principles Financial status and governance For us, economic responsibility means producing value for shareholders over the long term and generating a positive impact on the Finnish national economy. We protect our operations from risks and secure our ability to operate in the Finnish society by complying with the laws, regulations and our Code of Conduct in all our activities.

CEO Review Plant Construction Implementation Operational People and Financial status Reporting 49 and Strategy safety readiness quality readiness competence and governance principles Financial figures 2019

Investments in Fennovoima Key figures in 2019

1800

1600 Balance sheet total 1 584M€

1400 Equity ratio 32.2% 1200 1056M€ 1000 Liquidity position Good

800 Average number of personnel 342 600

400 Personnel expenses 27.1M€ 596M€ 200 Payment to the State Nuclear 99.2M€ 0 Waste Fund 1.8M€ Investments in Project costs Fennovoima 2007 2019 2019 The company does not have any turnover before the start of electricity generation, which is estimated for late 2028. Shareholder’s investment Until then, the company is estimated to make small losses. Other liabilities, mainly long term debt inancing

CEO Review Plant Construction Implementation Operational People and Financial status Reporting 50 and Strategy safety readiness quality readiness competence and governance principles RISK OVERVIEW Fennovoima’s risk management supports the Causes Consequences Project costs Project delays Plant performance Operational costs achievement of the set objectives and prevents negative effects on operations. We strive to Nuclear & radiological safety Safety issues Necessary upgrades identify risks as early as possible and to actively take corrective and preventive measures. Design & specifications Availability issues Unplanned shutdowns Plant By effective risk management we Implementation & quality Lifetime issues Unplanned maintenance strengthen: Operation & maintenance Operational issues Additional resource needs

• nuclear safety, quality and security of Engineering & licensing operations, • safety and security of personnel, Procurement & supply chain • economic value creation and minimizing Additional Delayed resources deliveries potential economic loss, Construction & installations Deiveries • corporate responsibility and • cooperation and dialogue with Commissioning & training stakeholders. Management & leadership Delayed work The focus of risk management is on iden- Competence & resources Delayed operation tified risks related to plant performance,

progress of the project and efficiency of Partners & advisors Lagging support Lacking support Enablers work. In addition, the local impact of the project and stakeholder relations are a cen- Platforms & tools Low productivity Missing information tral part of our risk management. Financing Financing delays Interest rates With regard to project management, our risk management focused mainly on risks Authorities Authority delays related to the schedule, quality and tech- Shareholders Financial pressure nical risks of the project in 2019. In 2020, External risks are further studied particularly from Regional aspects Local challenges the perspective of financial risks.

CEO Review Plant Construction Implementation Operational People and Financial status Reporting 51 and Strategy safety readiness quality readiness competence and governance principles RESPONSIBLE BUSINESS PRACTICES of Directors, and the CEO carries the Compliance with laws, regulations and responsibility for its implementation. In our Code of Conduct secures our abil- practice, the Compliance unit is in charge Company policy ity to operate in the Finnish society. All of the development and follow-up of Fennovoima employees carry the respon- the Program, processing of concerns, Defines the key principles on quality, nuclear safety, occupational sibility for following the law, protecting and providing instructions and training health and safety, human resources, environment, company human rights and promoting justice. We to the personnel. The Compliance unit security and communication. operate with absolute integrity and honesty. also processes suspected violations and non-conformities and implements the Compliance management necessary actions. Fennovoima The identified key risks associated with Code of Conduct business ethics for Fennovoima are Compliance & Ethics training • Corruption Successful operation in the nuclear indus- Incorporates the principles that are followed in all our operations. • Unjust influence and conflicts of try requires that all the personnel are interests familiar with the applicable laws and reg- Instruction on prevention of money Instruction on anti-bribery and • Risks related to the supply chain ulations and is committed to compliance laundering and terrorist financing corruption • Risks related to the neglect of legal with them and with the nuclear safety requirements. principles, company policy and ethical principles that steer the organization’s Our Company Policy and the Code of Conduct follow the principles of Fennovoima’s Compliance & Ethics Pro- operations. the UN Global Compact responsibility initiative. gram places special emphasis on these risk areas. In 2019, 93% of our own personnel and the time limit of six months. In 2018 the training course for our personnel to sup- 50% of the internal consultants (total: combined completion percentage was 89 port and maintain their understanding of The Compliance & Ethics Program has 86%) had completed the compulsory and the set time limit was four months. ethical matters. been approved by Fennovoima’s Board training on our Code of Conduct within We are also planning to adopt an online

CEO Review Plant Construction Implementation Operational People and Financial status Reporting 52 and Strategy safety readiness quality readiness competence and governance principles Reporting concerns In 2019, some confidential documentation gift must comply with applicable laws and pliance & Ethics training to ensure that the We encourage our employees to report related to safety design of the nuclear Fennovoima’s instructions. rules are clear to everyone and to avoid any suspected violations of laws, our power plant was found from our former ambiguity. Companies included in the Code of Conduct and internal regula- employee's home. The case is still under In 2019, no corruption cases came to our supply chain have committed to complying tions. These should be reported primarily pre-trial investigation. As a result of the attention. However, there was one case with Fennovoima’s Code of Conduct or sim- to the supervisor or to the Compliance case, Fennovoima has identified areas for in which the conflict of interest had not ilar principles. Fennovoima has established team. Fennovoima also has a so-called improvement, for which we have taken been understood before the procurement contractual obligations for supply chain whistleblowing tool that allows anony- the necessary measures. process began. We will further illustrate companies to prevent corruption in their mous reporting of all compliance-related conflict of interest situations in our Com- own operations and in their supply chains. observations. The tool is available to all Anti-corruption Fennovoima employees. Fennovoima has versatile tools to pre- SIGNIFICANT NON-COMPLI- vent corruption. These include written ANCES WITH LAWS AND LEGAL 2019 2018 2017 Absolute confidentiality is applied to all Code of Conduct, instructions to prevent REQUIREMENTS communications related to expressing corruption and money laundering, which Fines or non-monetary sanctions for 0 0 0 concerns, and we do not tolerate any are always available to personnel online, non-compliances countermeasures, harassment or discrim- compulsory training on prevention of ination of persons who have submitted corruption (as part of the Compliance & reports. Even an attempt of a counter- Ethics training for employees and inter- CORRUPTION 2019 2018 2017 measure will lead to disciplinary action nal consultants) and procedures for the Confirmed incidents of and may even lead to the termination of processing of suspected and observed 0 0 0 employment. incidences. Any offer, promise, grant or corruption

CEO Review Plant Construction Implementation Operational People and Financial status Reporting 53 and Strategy safety readiness quality readiness competence and governance principles Reporting principles

This Fennovoima report contains infor- DATA BOUNDARIES AND INFORMA- related supply chain data is supplied by language report Occupational safety mation on the progress of the Hanhikivi TION SOURCES RAOS Project Oy. The environmental (p.23), Environment (p.26) People and 1 project and on the focus areas of cor- The data presented in this report covers data provided in this report covers the competence (p.44) and Responsible busi- porate responsibility. The report covers Fennovoima Oy’s functions in Helsinki Hanhikivi 1 project site. The information is ness practices (p.52). The performance the year 2019. The information on the and Pyhäjoki and in the Hanhikivi 1 collected from the management system, indicators included in the assurance progress of the project is based on our nuclear power plant project site, if not monthly reports and from independent scope are indicated in the sustainability internal evaluations and the views of otherwise stated. Fennovoima’s subsid- experts’ studies conducted in the plant indicator index and KPMG’s assurance Fennovoima's experts. For sustainability iary Fennovoima RUS is not included in site area. The construction waste data report. The assurance report and the reporting purposes, we apply disclosures the scope of the report as it has only one is from Fennovoima’s own systems and indicator index are available at: of GRI Standards and Fennovoima's employee. To cover the material aspects from Fennovoima’s waste management www.fennovoima.fi/en/reports-and-assurance own disclosures that we have defined as of the Hanhikivi 1 project site operations, partner Remeo Oy. Human resources essential to our corporate responsibility. the matters that relate directly to the related data in this report covers Fen- GLOBAL COMPACT COMMUNICATION material aspects of Fennovoima’s cor- novoima’s organization in Helsinki and ON PROGRESS When defining what matters to us in porate responsibility, also regarding the Pyhäjoki. Occupational health and safety Fennovoima supports the ten principles terms of corporate responsibility, we plant supplier RAOS Project and main con- data describes the Hanhikivi 1 construc- of the United Nations’ Global Compact have taken into account the expecta- tractor Titan-2, are included in this report. tion site and Fennovoima’s offices in sustainability initiative. We respect and tions and requirements of both our own Helsinki and Pyhäjoki. promote these principles throughout our organization and external stakeholders, The financial data presented in the doc- operations, and report on our progress in in accordance with the materiality matrix ument is from Fennovoima’s audited EXTERNAL ASSURANCE this report. shown on the next page. More informa- financial statement. Supply chain data An independent third party, KPMG Oy Ab, tion on the definition of materiality and includes information from the Fennovo- has provided limited assurance for the our sustainability targets can be found at: ima Management System (FMS) and the specific indicators on social and environ- www.fennovoima.fi/en/responsibility Hanhikivi 1 site register. EPC (engineering, mental performance that are presented procurement and construction) scope in the following chapters of the Finnish

CEO Review Plant Construction Implementation Operational People and Financial status Reporting 54 and Strategy safety readiness quality readiness competence and governance principles Material topics of corporate responsibility

High 1 SAFETY 3 2 1 Nuclear and radiation safety, emergency preparedness 4 Nuclear fuel life cycle and responsible nuclear waste management 4 15 Data privacy and security 18 Energy security & energy self-su iciency of Finland 8 5 18 ECONOMIC RESPONSIBILITY 9 6 2 Plant availability & economic beneits to the shareholders 7 5 Supply chain management 8 Impact on local economy and employment 18 Energy security & energy self-su iciency of Finland 10 SOCIAL RESPONSIBILITY 5 Supply chain management: labor practices, supply chain transparency, 14 respecting human rights in the value chain 6 Acceptability of nuclear power 10 Occupational health and safety 13 11 Competence development and retention 12 Employee engagement and satisfaction 11 12 14 Engaging with local stakeholders 17 16 Personnel and workplace wellbeing 17 Co-operation with educational institutions

Impact on sustainable development 16 19 Supporting good causes, volunteering ENVIRONMENTAL RESPONSIBILTY 15 3 Climate change mitigation & reducing fossil dependency 19 9 Environmental impact management

RESPONSIBLE BUSINESS PRACTICES 7 Business ethics Low High 13 Openness and transparency Impact on Fennovoima

The topics in the upper right corner of the matrix are considered most relevant to our corporate responsibility, but all the topics presented are important. Topics that are important to external stakeholders are encircled. The weight of the line indicates the importance of the topic to our external stakeholders.

CEO Review Plant Construction Implementation Operational People and Financial status Reporting 55 and Strategy safety readiness quality readiness competence and governance principles Salmisaarenaukio 1, 00180 Helsinki | 020 757 9200 | [email protected] | www.fennovoima.fi