Fortum chief executive Mikael Lilius said that the fifth Finnish nuclear unit would help meet short-term electricity demand, but more capacity is needed to meet projected long-term demand.

A fifth unit “is absolutely not the final solution,” he said at an energy conference in Stockholm. He said that when the fifth unit is built, it will only add 2-2.5% baseload electricity to the Nordic system. He estimates Finland will need more capacity by 2010. For a new unit to be built, however, electricity prices need to increase over the long-term, he said. “There has to be motivation to invest. Investment has to be profitable.” He said prices need to stabilise at E30-35/MWh to make building new capacity profitable.

Lilius said Fortum would decide whether to invest directly in a new unit after bids have been received and reviewed by TVO. “It has to be economic. With a nuclear plant, the aim is to push the start button and preferably push the off button 40 years later.” One certainty, he said, is that “the Finnish state is not going to contribute at all.” He added that he considered this to be very good, since it means that the project will operate on purely commercial terms.

Lilius also predicted continued consolidation in the Nordic electricity market, as smaller utilities band together to fend off large continental power companies and maintain a European presence in the coming deregulated European market.