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Swedish government faces criticism for nuclear push

20 Nov 2023 12:47

20 Nov 2023 12:47

(Montel) Sweden's government is undermining a key principle of energy technology neutrality and putting taxpayers’ money at risk in an ideological battle to promote more nuclear power, said representatives of the wind power lobby and opposition political parties.

The government said last week it plans to introduce a scheme to promote 2.5 GW of new nuclear capacity by 2035, adding to the sector's current capacity of 6.9 GW. The scheme, which is similar to contracts for difference and aims to reduce the risk burden for developers, comes on the heels of SEK 400bn (EUR 34bn) in credit guarantees announced in September.

"The government is abandoning the idea that expansion of power production should take place on market-based and technology-neutral terms. It is a 180-degree shift from the order that has prevailed since the deregulation of the electricity market in 1996," said Erik Almqvist, responsible for market issues at the Swedish Wind Power Association.

“All the wind farms that have been put in operation in Sweden between 2020 and 2026 – with total investments of SEK 120bn – have been made entirely on market terms,” he added.

"Ideological" push
Rickard Nordin, energy spokesperson of the opposition Centre Party, said Swedish power prices on average have been lower than the minimum prices that have been agreed to nuclear developers in countries like France and the UK.

“I am not prepared to let the taxpayers foot the bill for the government's ideological lock-in on nuclear power. All types of technology should be allowed to compete on equal terms – without massive subsidies,” he said, noting the recently announced credit guarantees already amounted to SEK 40,000 per citizen.

However, Nordic utilities Vattenfall and Fortum, which plan to build more nuclear power in Sweden, said risk-sharing measures are needed to incentivise new nuclear power, especially given the huge cost overruns and delays in new projects in Finland and France.

Fortum also disagreed that the measure would necessarily be bad for taxpayers, since more supply could reduce prices.

“The alternative for electricity customers is likely that these investments will not take place, and that electricity prices will be both higher and more volatile in the long term than they would otherwise be,” said Fortum spokesman Anton Steen.

This view was backed by industrial group SKGS, which also said the target of 2.5 GW new nuclear build provided much needed visibility for both producers and consumers.

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