Sweden plans to expand nuclear power to fight climate change, which will cost about 400 billion crowns ($38 billion). A government commission suggests funding through loans and price guarantees.
The goal is to add 2,500 MW of new nuclear power by 2035, equivalent to two reactors, and ten more reactors a decade later. However, private investors are hesitant due to the high costs, long project timelines, and risks associated with such long-term investments.
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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.
The commission recommends that the government provide loans to cover 75% of the cost of building nuclear power plants, with the owners providing the remaining 25%. Any cost overruns should be financed in the same way.
Additionally, the government should guarantee an electricity price of approximately 0.8 Swedish crowns/kWh ($0.0760) for investors over 40 years.
Last year, the government decided it would need to cover a larger portion of the costs and appointed a commission to find the best deal for taxpayers.
To ensure the program is cost-effective, the commission has now proposed building four or five new power plants with a total capacity of 4,000-6,000 MW.
Critics highlight the significant cost overruns and long delays of recent projects like Britain’s Hinkley Point C and France’s Flamanville 3.
They argue that nuclear power cannot be developed quickly enough to meet the surge in electricity demand from green-steel plants, battery production, and mining, which are expected to need an extra 88 TWh of power in the next decade.
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They fear the program might become a costly failure. However, the government maintains that nuclear is essential for providing reliable power when wind, water, and solar sources are unavailable, especially during peak demand periods.
Sweden currently operates six reactors, all built in the 1970s and 1980s.
