Swedish Government Will Help Finance ‘Massive’ Nuclear Expansion

Niclas Rolander
·3 min read
1

(Bloomberg) -- The Swedish government pledged to take an active role in securing financing for a “massive” buildout of nuclear power to meet an expected surge in electricity demand.

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The center-right coalition and their partner Sweden Democrats said Thursday that they will launch an inquiry into the various models for how the state can share financial risks with utilities that choose to invest in the largely emissions-free technology.

Power consumption may double in the next decade as everything from heavy industry to transport sectors will electrify. At the same time, public support for new nuclear plants has never been higher.

“We’re providing the necessary market conditions by saying the state will step in and assume some of the risk,” Finance Minister Elisabeth Svantesson said at a press conference. “We are tearing down the obstacles.”

Sweden is also among nations likely to sign a declaration at the COP28 climate summit to triple the amount of installed nuclear power capacity globally by 2050. The push is led by the US and other backers may include the UK and France.

The swedes have had a love-hate relationship with atomic energy since the first commercial reactor in 1972. Mounting grassroot opposition in subsequent years culminated in a 1980 referendum that called on lawmakers to dismantle reactors. That never actually happened though, and ahead of last year’s election, the winning center-right coalition made a nuclear renaissance a pillar of its election campaign.

Thursday’s announcement comes on top of an earlier pledge to provide 400 billion Swedish kronor ($37.9 billion) in credit guarantees, as the ruling parties are anxious to fulfill promises to get going on the expansion before the next election in 2026.

However, reactors are notoriously expensive to build and can come with huge risks of delays. In Finland, Europe’s biggest reactor started commercial operation this year — 14 years later than planned. In the UK, Electricite de France SA’s Hinkley project is billions of pounds over budget.

The Swedish government hopes that so-called small modular reactors can speed up the process and aims to have plants in place that generate output equivalent to two full-scale reactors by 2035, said Tobias Andersson, the energy policy spokesman of the Sweden Democrats.

The most likely operator of such smaller units, which will be quicker to build than conventional plants, is state-owned utility Vattenfall AB. The firm operates five of Sweden’s six reactors, which supply about a third of the country’s power. The company earlier this year began a process to purchase land adjacent to the Ringhals plant on the west coast.

Sweden’s energy agency’s most bullish scenario is that power demand may double by the middle of next decade already, and it says land-based wind energy is likely to provide most of the new production capacity by then.

“Of course you can dream, hallucinate and pray for wind power to generate the energy that’s needed, but it will ultimately not be anything more than dreams, prayers and hallucinations,” Andersson said at the press conference. “The government can’t build its policy on that. Instead, we have chosen to create conditions for a massive buildout of nuclear power.”

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