Power failure: What Britain should learn from Finland's nuclear saga

It was hailed as the template for all future reactors – but then they tried to build it.

The island of Olkiluoto, off Finland's west coast, seems like the perfect picture of Nordic serenity. Surrounded by the still, idyllic waters of the Gulf of Bothnia, it looks like an ideal spot for a peaceful retreat away from it all. Anyone wanting to visit the island has to travel down a long, lonely road, hugged tightly on each side by a thick forest of spruce and birch, and avoid the many elk that roam freely.

Yet many people have increasingly been paying close attention to this remote corner of Northern Europe – and not because of the scenery. At the end of this winding road, masked by such dense forest, is a building project that first became a national saga, and now has international resonance. For the island is home to the problem-plagued construction of Olkiluoto 3, the first nuclear reactor built in Western Europe for more than a decade.

Olkiluoto 3 was meant to be the power plant for the 21st century, a show home for the nuclear industry. A new type of reactor, it would banish the ghost of Chernobyl, remain safe even in the case of a core meltdown, and its steel shell would withstand an aeroplane crashing straight into it. Above all, it would produce a huge amount of cheap and clean energy to help Finland meet its Kyoto greenhouse gas targets.

Since construction began in 2005, the same design – the European Pressurised Reactor (EPR) – has been selected for a new plant in Flamanville, France. It is not hard to see why the EPR has become Europe's choice for new nuclear plants. Olkiluoto 3's reactor can produce 10 per cent more electricity than any other in Europe, while it is 4 per cent more efficient than the two existing nuclear reactors at the site. And it should provide Finland with electricity for a generation – the plant's life span is 60 years.

Advocates of the EPR design insist that the blueprints make it easier than other reactors to construct quickly. Its safety features are also the most advanced ever put in place. As well as being protected by a reinforced steel shell, its main buildings are also protected against earthquakes and pressure waves caused by explosions. Any radioactive leak is blocked from the environment by three layers of protection. Even in the unlikely event of a core meltdown, when all other safety features fail, Olkiluoto's EPR design has the answer. The radioactive material would be led to the reactor's base, where it is isolated and treated with an emergency cooling system.

As the first EPR to be built, the world has been watching to see if Olkiluoto 3 will deliver everything it promises. In Britain, the EPR is one of four designs competing to be given the go-ahead from UK regulators. The company wanting to build a similar reactor here, Areva, is one half of the consortium behind the ill-fated construction of Olkiluoto 3, with Siemens the other partner. Yet to say that Finland's experience bodes well would be optimistic to say the least. It was not long before Olkiluoto 3 was hit by a slew of safety concerns, building blunders, spiralling costs and chronic delays.

The new project was intended to deliver something altogether superior to Olkiluoto's two existing reactors, built in the 1970s. But a number of key components have already had to be remade after failing to meet safety standards. The consortium building the reactor found itself in trouble for selecting cheap and inexperienced sub-contractors. The delays have meant that the facility will contribute little to Finland's Kyoto commitments to reduce greenhouse gas omissions to 1990 levels by 2012.

The 1,600MW-capacity reactor, which was meant to be producing energy by 2009, is now around two years behind schedule. It is more than €1bn over budget, without taking into account the cost of the lost electricity production time which, rough estimates suggest, could run to €600m. After Finland's government rejected greener energy sources for being too expensive, that has angered many Finns.

Greenpeace's major campaign against the project culminated in protesters' scaling one of the cranes at the site last May. "We took the action in response to the fact that all the promises made to the public and to our parliament about nuclear energy had been let down," says Lauri Myllyvirta, one of the six protesters. "The safety problems concerned us, but also the fact that it was meant to be a source of cheap and clean power. The delays will now cost the Finnish people billions of euros."

The first major safety problem came with the first component to be built – the concrete base, which was not mixed properly. Construction was set back two months as a result. Further problems occurred with an important new safety feature – the steel container designed to house radioactive materials in case of an accident and to protect the reactor from outside threats. The finished container was found to have inadequate welding, an outdated design and was even damaged during storage. It emerged that it had been built by a Polish company more used to building fishing ships than nuclear power plant components. Those are just the most high-profile design flaws. At the last count, the Finnish nuclear regulator had detected 1,700 "listed quality deviations" on the project.

TVO, the company destined to operate the new reactor, has been in a battle to defend the reactor's reputation. Its senior vice-president, Anneli Nikula, insists that the delays have come about because the reactor building has "such demanding safety features", such as "core catcher" technology that keeps the core safe in the event of a meltdown. As for the Greenpeace intrusion, that was no big deal. "There are no fences at the site," she says. "We add the safety systems when we have things there that need looking after."

A day at the facility indicates the company's preoccupation with demonstrating just how safe its reactors are. First we go to one of its reactors, submerged below huge tanks of water – an excellent insulator of radiation, we're told. Then it's off to the underground repository designed to store waste. And finally we are told that TVO is busy drilling a pipeline 500 metres below the ground, deep into the bedrock of Olkiluoto, where it hopes to store spent fuel permanently.

Even when the Finnish government gave the go-ahead for the reactor in 2002, Finland's people and its politicians were divided. It was only narrowly given parliamentary clearance, with 107 votes for and 92 against. By the summer of 2006, Finns seemed to have finally turned the corner in support of nuclear energy. But in reality, public support was always fragile. Most felt a resignation that in order to become more independent of Russian energy and meet its Kyoto commitments, the nuclear path was the only realistic one.

British interest in the EPR design remains strong. British Energy, which runs seven of the UK's nuclear power stations, has said it is considering the EPR design, while the French firm EDF has submitted plans to build an EPR plant in Britain. It has even teamed up with the French firm Areva, one of the companies behind the construction of Olkiluoto 3, to build the reactor. It is one of four designs currently in the race. The Health and Safety Executive, which has the job of approving the design of the UK's new nuclear plants, says that it is aware of the issues that have arisen during Olkiluoto 3's construction. With another three years of the design approval process yet to run, it says it is "far too early" to speculate about which design will be given the go-ahead. Whichever design succeeds, though, Olkiluoto 3 serves as a potent warning that the construction of nuclear power plants remains an unpredictable and potentially costly business.