In early April, Fermi Energia announced a cooperation agreement with South Korean company Samsung C&T to prepare for the construction of two small modular reactors in Estonia. Under the agreement, Fermi Energia and Samsung will work together to develop plans for building a nuclear power plant with a capacity of up to 600 megawatts.

Speaking on ERR's online broadcast "Otse uudistemajast" on Wednesday, Fermi Energia CEO Kalev Kallemets said the new cooperation agreement is a step forward. The company can now begin preparations to apply for a building permit, assess potential sites, budget for the project, and select partners.

"Learning from the many mistakes made in nuclear energy, we realized that early cooperation with a realistic builder, based on a specific technology, and examining potential sites together with a partner is essential — especially in a country likely undertaking its first construction," he explained.

Kallemets said the application submitted in mid-January includes one planned area covering two neighboring municipalities, Lüganuse and Viru-Nigula. The municipal councils have agreed to participate in the process.

The preliminary agreement with Samsung includes preparatory work to identify credible and potential subcontractors for the company, and determine the division of labor between the partners and Korean supply chains. The construction budget can then start to be developed.

Both coalition parties, Reform and Eesti 200, support nuclear power. Kallemets said it is welcome that both parties understand the need to ensure security of supply and, over the longer term, meet climate neutrality goals.

He said the project's timeline is holding up surprisingly well and it is hoped the planning process can begin next year. The site should be finalized by 2029. By that time, the first plant of the same type in Canada should already be generating electricity. This would then be an ideal moment to make the next funding and political decision to begin processing the construction permit.

"If we can obtain the building permit in two years — and in Canada, it was granted in two years, which is a conservative estimate — then site construction could begin by the end of 2031," he said. "And by Christmas 2035, the first reactor could be producing electricity. The second reactor would follow 12 or 14 months later."

This means it would still take at least a decade before a plant could start generating electricity. Kallemets believes this is not such a long time.

Speaking about the plant's projected average electricity price per megawatt-hour, Kallemets said the key factor is the time frame.

"In the initial period, when loans and capital assets are being repaid, then depending on the cost of capital /…/ the total average price would fall in the range of €70 to €90," the CEO said. Cost of capital is the main factor, he added.

In the second period, the price would drop to "around €25, €26, €27" after loans have been repaid.

The first pricing period would last 20 years, while the lower-cost second period would last another 40 to 50 or even 60 years.

The nuclear plant's expected lifespan is 60 years, though in the United States, Kallemets noted, even plants built in the 1970s have had their licenses extended to 80 years.

Fermi Energia also wants a price guarantee from the state. Kallemets explained this is necessary as there is currently no production asset in the Baltics that can offer large consumers price stability. The state itself would also be a large consumer.

"A very important component is precisely those Baltic consumers who today have no other source that can provide 100 percent, meaning 8,760 hours, of clean energy at a fixed price," Kallemets said.

Fermi Energia wants to cover more than half of its production capacity in the Baltics through direct power purchase agreements (PPAs), and according to Kallemets, this is a realistic goal.

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