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Sweden proposes financing plan for new nuclear power plants amid industry concerns

Tuesday 3rd 2024 on 20:33 in  
Sweden

In August, government investigators presented their proposal for financing new nuclear power plants. The plan consists of several components, including government loans with favorable terms, a price guarantee that ensures compensation even when electricity prices are lower, and a risk-sharing mechanism that improves financial conditions in the event of poor performance.

However, many stakeholders have raised concerns regarding these proposals, particularly the significant risk transfer onto taxpayers. The Institute for Business Research has criticized the breadth and generosity of the assistance, suggesting that it may not be economically efficient. They noted that the investigation was not tasked with assessing the societal cost-effectiveness of building new reactors but instead focused on developing a framework for their construction regardless of economic feasibility.

Industry representatives warn that the proposed support could diminish the prospects for developing wind and heat power, potentially leading to a gap in energy supply until new nuclear facilities start operating, which may take 10 to 15 years. Additionally, the risks of prematurely closing existing nuclear reactors or hydropower plants could rise, as could hesitations about investments in increasing capacity or extending the life of current plants.

While some stakeholders see the proposal as a means to boost competitive pricing for Swedish industries, they also emphasize that wind power would require its support system to ensure the overall success of the planned expansion in electricity production.

The proposal outlines financing for four to five large-scale reactors, anticipated to produce 4,000 to 6,000 megawatts, expected to cost around 400 billion kronor, with the state covering a significant portion through loans. Other safety measures include a price assurance for nuclear companies for 40 years, guaranteeing a minimum rate. A risk and profit-sharing mechanism would be activated based on market evaluations after two years of operation.

Source 
(via svt.se)