SaHo Model vs. other models

The SaHo Model was developed on the basis of a thorough analysis of other business models dedicated to nuclear power, with a particular focus on their advantages and disadvantages. The Model draws on the proven solutions of selected models, especially the cooperative-like models, and belongs to this group. However, the SaHo Model differs significantly not only from classic investor-owned utilities (IOU) models, but also from other cooperative models (US cooperative, Finnish Mankala model).

The main difference between the SaHo Model and utility power models (which are based on tools such as CfD, RAB, PPA) is the ownership structure. In the SaHo Model, the power plant in the operation phase is owned by the end-users. In the utility power models, the power plant is owned by the power companies that generate and sell the electricity on the market. End-users are merely ‘customers’ buying energy from the power plant through trading companies and wholesale trading platforms. The power plant owner sells energy on market basis (i.e. aiming for profit margin). The intermediaries, on the other hand, add their own operating costs (office rent, staff salaries, concession fees, insurance) and profit margins as well. All this results in the end-user (energy consumer) paying much more than if they could purchase energy from their own source at the cost of generation, as in the SaHo Model and other cooperative models.

The second main difference is the high flexibility of the ownership structure, depending on the stage of the project. In comparison, in other models the ownership structure is generally fixed or subject to only minor changes (e.g. the addition of a new investor of the same type as the existing investors).

The SaHo Model is a proposition for improvement of the cooperative models used so far. The Model is much better able to handle the financing of very large, capital-intensive and high-risk infrastructure projects and to bring more benefits to society.

Table 1. Summary of differences between the SaHo Model and other cooperative models.

SaHo Model Mankala American cooperative
Ownership structure (construction phase)
flexible
fixed
fixed
Ownership structure (operation phase)
flexible or fixed
fixed
fixed
Legal form of SPV
joint-stock company (preferred)
Oyi / Oy
cooperative
Owners type (operation phase)
only end-users [1]
mixed [2]
mixed
Financing cost
lowest possible
low/medium
low/medium
Energy offtake: right/obligation
yes/yes
yes/no
yes/no [3]
Reuse of Funds mechanism
yes
no
no
Scope of state control over NPP
from none to significant (as option)
minor [4]
none
Risk of disconnection of owners (end-users) by the TSO
no
yes
no

[1] Energy trading companies acceptable only as a supplement, in certain cases.
[2] In the TVO and Fennovoima companies, end-users account for less than 50%, with energy trading companies (investor-owned as well as public-power) dominating.
[3] Depends on the construction of particular PPA in the respective cooperative, in some cases there may be a take-or-pay obligation.
[4] Control only through a large shareholding or stake.

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