STOCKHOLM — Sweden’s plans to expand nuclear power to help tackle climate change are likely to cost around 400 billion crowns ($38 billion) and should be financed by government loans and price guarantees, a government appointed commission said on Monday.
The government wants 2,500 MW of new nuclear power by 2035 — the equivalent of two new reactors — and 10 new reactors a decade later.
But the private sector has shied away from investment, worried about risks of projects with a life span of around 100 years, that have huge start up costs and that can take more than a decade to deliver any earnings.
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“The challenge for those who want to build new nuclear power is that the risks are seen as multiple and very large,” head of the commission Mats Dillen said.
Last year the government said it would need to take a greater share of the costs and appointed a commission to look at ways to get the best deal for tax payers.
The commission proposed a fleet of four or five new power plants with 4,000-6,000 MW of installed capacity in order to make the programme cost-effective.
It said the state should lend nuclear companies 75% of the cost of building power plants with the owners contributing 25%. Cost overruns should be financed in the same proportions.
The commission said the government should guarantee an electricity price of around 0.8 Swedish crowns/kwh ($0.0760) to investors over 40 years.
Swedes voted in 1980 to phase out nuclear power but the need to address climate change has forced a rethink and nuclear power is now a centrepiece of the current right-of-centre coalition’s strategy to meet its goal of net zero emissions by 2045.
Critics, however, have pointed to huge costs overruns and decade-long delays faced by recent projects such as Britain’s Hinkley Point C and France’s Flamanville 3.
They say nuclear cannot be built in time to meet a surge in electricity demand – projects such as green-steel plants, battery production and mining that are expected to require an additional 88 TwH of power in the next decade – and say the programme risks being a hugely costly white elephant.
The government, however, says nuclear is the only way to provide reliable power when wind, water and solar power are offline and to meet demand at times of peak demand.
Sweden currently has six reactors in operation, all of which were built in the 1970s and 1980s.
($1 = 10.5140 Swedish crowns)
(Reporting by Simon Johnson, editing by Terje Solsvik)
