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Google's 22-year Loviisa contract underwrites €700m of refits Fortum has not yet approved
The €13 billion Google is putting into Finnish data centres in 2027 and 2028 comes with a two-decade electricity contract that Fortum says will support its programme to extend the Loviisa reactors' operating life.
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What happened
- Google will buy up to half of the Loviisa nuclear plant's output under a contract that starts at reduced volume in 2028 and runs at the full 50 percent from 2030 through 2049.
- Google will build data centres in Kajaani, Muhos and Vaala and expand the Hamina site it set up in a converted paper mill in 2009.
- Fortum said around 80 percent of the projects required for the life extension, about €700 million worth, still lack investment decisions.
- Loviisa's two VVER-440 pressurised water reactors entered commercial operation in 1977 and 1981, and in 2023 the Finnish government extended their operating licences through the end of 2050.
- The two companies also signed a memorandum of understanding on new nuclear, renewable generation and electricity-system flexibility, including possible new reactors at Loviisa.
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Why it matters
- capability A two-decade revenue stream gives Fortum's board a named counterparty for refurbishment work it has not signed off, so the 2050 licences become something a lender can price.
- exposure Finnish industry and households will now compete for the uncommitted half of a plant that covers more than a tenth of national supply, with the other half spoken for until 2049.
- decision Buyers who want round-the-clock power in Finland have to be willing to underwrite a generator's capital programme, which moves diligence onto outage plans and unapproved projects.
- contradiction Google presents the contract as protection for affordable Finnish electricity while taking up to half the plant's output, and no price has been published to test that against.
Fortum's programme to extend Loviisa's life runs to about €1 billion. Take out the €700 million that has no investment decision behind it and roughly €300 million is committed. World Nuclear News reported that the Google contract is intended to provide a predictable revenue stream that can support those investments.
The two published accounts describe the term differently. Interesting Engineering called it a 20-year deal; the BBC reported a 22-year contract with Fortum. Both fit the schedule, because 2028 through 2049 inclusive is 22 years, and the stretch at the full 50 percent, 2030 to 2049, is 20.
Unit 1 entered commercial operation in 1977. It will be 72 years into service when the contract ends.
Loviisa supplies more than 10 percent of Finland's electricity. The contracted half is therefore upwards of 5 percent of national supply at today's share, and other buyers are arriving for what is left: TikTok said this week it would put $1 billion into a data centre in Kouvola. Google said keeping Loviisa running would help preserve access to reliable and affordable electricity for Finnish households, businesses and industry. Ruth Porat, president and chief investment officer of Alphabet and Google, said the investment "underscores Google's commitment to grow our presence responsibly, pairing the expansion of our technical infrastructure with new energy capacity, grid enhancements, and energy affordability initiatives". Finland's Prime Minister Petteri Orpo said "Google's decision is a clear testament to our strengths". The announcements do not include a price.
New generation at the site is small next to the storage. A 38 MWe uprate is already underway for completion in 2028, and the agreement is expected to enable a further 10 MWe. That is 48 MWe of extra output against the 94 MW battery system Fortum has agreed to optimise at Google's Kajaani data centre.
For anyone structuring the same kind of deal elsewhere, two figures decide whether the seller can deliver what it signs. The first is the share of its refurbishment spending that has a board decision behind it, which at Loviisa is about €300 million of €1 billion. The second is how much of its output is already promised to someone else, which here is half, for 20 years at full volume. Fortum has said that new nuclear projects would require strong customer demand secured through long-term power purchase agreements, strategic partners, appropriate financing and risk-sharing arrangements. Google has now supplied the first of those conditions at a plant that started up in 1977.
What to watch
- Whether Fortum's board approves the remaining €700 million of life-extension projects, and on what schedule.
- Whether the memorandum of understanding on new reactors at Loviisa turns into a signed contract with a stated price.
- Who buys the other half of Loviisa's output from 2030, and on what terms compared with Google's.