Aerial view of the Olkiluoto nuclear power plant area in Eurajoki, Finland 10 December 2020. A severe abnormal disturbance occurred at the Olkiluoto nuclear power plant Unit 2 that led to reactor shut down.; Credit: Tomi Glad / Lehtikuva / Reuters

HELSINKI (Reuters) - Finland's much-delayed Olkiluoto 3 nuclear reactor started test production on Saturday 12 March 2022, operator TVO said, delivering power to the national grid which over time is expected to reduce the need for electricity imports and lead to lower prices.

Plagued by technological problems that became the subject of lawsuits, the 1.6 gigawatt (GW) reactor had originally been due to open in 2009. It is Finland's first new nuclear plant in over four decades and Europe's first in almost fifteen years.

Olkiluoto 3 started test production at just over 0.1 gigawatt, a small fraction of its capacity, with a ramp-up to full, regular electricity output planned by the end of July.

"OL3 significantly improves Finland's electricity self-sufficiency and helps in achieving carbon neutrality goals," operator Teollisuuden Voima (TVO) said in a statement.

Once fully operational, it is expected to meet 14% of Finland's electricity demand, reducing the need for imports from Russia, Sweden and Norway.

"Olkiluoto 3 will decrease Finland's import dependency and it will become a cheaper price zone," Aurora Energy Research economist Alexander Esser told Reuters.

Finland's net imports of power averaged 13 terawatt hours (TWh) over the last few years, which should drop to 5-8 TWh by 2025 with Olkiluoto 3 in operation, economist Esser said.

Nuclear power remains controversial in Europe, with some countries such as Germany phasing out reactors amid safety concerns, while others including France and Britain discussing new developments.

TVO is owned by Finnish utility Fortum and smaller energy and forestry firms.

Finland is the only Nordic country with a large power deficit, said Marius Holm Rennesund, a partner at Oslo-based consultancy Thema.

Thema predicts that Finnish wholesale power prices will drop to €60 per megawatt hour (MWh) in 2023 from a predicted average of €70 per MWh in 2022, although the expected reduction will also come from lower gas prices.

In 2024, Finnish wholesale power prices will likely fall further to €45 per MWh, Rennesund said.