Oct 14, 2022
Sweden’s Incoming Cabinet Says Will Build New Nuclear Reactors
(Bloomberg) -- Sweden’s incoming government will ask state-run utility Vattenfall AB to add nuclear power stations as the economy becomes increasingly electrified.
“New reactors will be built in Sweden,” Ebba Busch, whose Christian Democrat party belongs to an alliance that won the most seats in last month’s general election, said at a news conference Friday. The right-wing bloc is slated to become the Nordic nation’s government in a parliamentary vote next week.
Swedes have debated nuclear energy for decades, but the source has garnered popular support recently amid the ongoing global crunch. Demand for electricity is poised to soar in coming decades as everything from heavy industry to transportation will rely on power instead of fossil fuels to keep humming.
The Nordic nation currently has six reactors, operated mainly by Vattenfall. Atomic energy, hydro power and wind turbines meet virtually all of Sweden’s electricity demand. Other nations are turning to nuclear to boost domestic supplies, with fears over the security of key infrastructure highlighting the need for nations and the European Union to become more self-sufficient.
New reactors could be built at the Ringhals facility on the west coast, said Jakob Magnussen, global head of credit research at Danske Bank A/S. But success is far from certain, given recent examples of new reactors in Finland, France and the UK running massively over budgets and construction schedules.
For Vattenfall, “it will mean a considerable boost to capex with a very long payback time,” Magnussen said.
The Swedes’ love-hate relationship with the technology began with the first commercial reactor in 1972. But mounting grassroots opposition in subsequent years culminated in a 1980 referendum that ordered lawmakers to dismantle reactors.
Polls ahead of last month’s election showed that 60% of the population wanted new reactors to complement the drive to expand clean energy. While there is plenty of power when the wind blows, the current crisis has exposed the shortage of stable power, particularly in the south.
Vattenfall decommissioned two units at its Ringhals plant in 2019 and 2020. There were fierce debates through the election campaign as the Moderates accused the government of intervening in the utility’s decision. The government maintained it was a commercial decision by Vattenfall.
The company has been preparing for a nuclear revival for some time. The first additions could be a new breed of small modular reactors, known as SMRs, which are about a quarter in size compared with the current units.
In June, just after the government warned that Sweden was facing an acute power crisis, Vattenfall said it would start an 18-month study into the technology. The first could come online in the early 2030s, the firm said.
(Updates with analyst comment beginning in fifth paragraph.)
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