STOCKHOLM (Reuters) – The Swedish government on Thursday proposed state loans and power price guarantees to help companies fund the construction of four new nuclear power plants, part of its strategy to boost electricity output and reduce carbon emissions.
Sweden’s government has said the Nordic country may need 10 new large nuclear reactors by 2045 as transport and industry shift away from fossil fuels and demand for electricity is forecast to rise to around 300 terawatt hours (TWh) from 135 TWh in 2023.
With worries over profitability hampering interest from the private sector, the government has accepted it will need to help finance construction costs, estimated in previous studies at tens of billions of dollars.
The right-wing government said it aims to attract the required investment by offering state loans as well as a contract-for-difference power price mechanism expected to boost producers’ income, but declined to give specific cost estimates.
“It is a limited, well-balanced, responsible support to enable something we have not done for a very long time, namely build new nuclear reactors,” Financial Markets Minister Niklas Wykman said of the government’s proposal.
“It is also our judgement that this is the way to get an approval from the European Commission with broad support,” he added.
EU countries need approval from the Commission under EU state aid rules to use subsidies to finance new nuclear plants.
Applications for funds can begin as soon as August this year, according to the government.
State-owned utility Vattenfall, which hopes to build a new nuclear reactor by the mid-2030s, said it welcomed the government’s proposal and that it would study the details.
Finnish utility Fortum on Monday said it was not commercially viable to build new nuclear production capacity without state support.
Sweden’s existing nuclear reactors were constructed in the 1970s and 80s.
(Reporting by Anna Ringstrom, editing by Louise Rasmussen, Terje Solsvik and Susan Fenton)
