Fortum Shares Surge 10% on 22-Year Nuclear Power Deal with Google

Shares of Finnish energy company Fortum surged after it announced a landmark 22-year power purchase agreement with Google. The deal secures a long-term buyer for up to half the output from its Loviisa nuclear power plant, enabling a critical life-extension project for the facility.

Details of the Agreement

The agreement provides Google with a significant source of carbon-free energy and gives Fortum the revenue certainty needed to invest in its Loviisa plant. Without this deal and the subsequent life-extension program, the facility, which currently supplies about 10% of Finland’s electricity, would have been unable to operate past 2030.

The key terms of the power purchase agreement (PPA) include:

• A 22-year duration.
• Coverage of up to 50% of the Loviisa plant's generating capacity.
• Support for an upgrade program that will keep the plant operational through 2050.

Market Reaction and Financial Impact

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Investors responded positively to the announcement, sending Fortum's shares up 10% on Tuesday. The long-term nature of the contract provides decades of revenue certainty, significantly de-risking future cash flows for the utility.

Fortum said it expects the agreement to lift its group comparable return on net assets by approximately 1.4 percentage points over time, once half of the plant's output is contracted under the new terms.

Google's Expanding Finnish Footprint

The deal is part of a broader collaboration aimed at meeting the growing energy demands of artificial intelligence and digital infrastructure. The companies also signed a memorandum of understanding to explore future projects in new nuclear, renewable energy, and grid flexibility capacity in Finland.

This PPA aligns with Google's substantial planned investments in the country. The tech giant intends to invest at least €13 billion in Finnish digital infrastructure between 2027 and 2028. Google will also allocate €31 million over four years to support local community initiatives, including €10 million for research and innovation.