Sweden rejects British model for new nuclear plant deals

PARIS Wed Nov 20, 2013 8:47am EST

PARIS (Reuters) - Sweden, reviving its nuclear power, will not follow Britain's example of offering state guarantees to fund the construction of new plants, its energy minister said on Wednesday.

Last month, Britain signed a deal with France's EDF (EDF.PA) to build a new nuclear plant, becoming the first European country to guarantee a company a feed-in tariff for an atomic energy project.

Sweden's biggest power group Vattenfall VATN.UL has touted Britain's price guarantee system to help companies commit to build new nuclear power plants in a market with low power prices.

"We won't address any direct or indirect subsidies for new nuclear power production in Sweden, which means that we will not introduce any feed-in tariff for nuclear," Swedish Energy Minister Anna-Karin Hatt told reporters in Paris.

"Nuclear in Sweden has to stand on its own, it has to bear its own cost, it has to bear its insurance cost as well as the cost for handling the waste after the uranium has been used," she said.

The International Energy Agency has called on Sweden to develop post-2030 scenarios for nuclear in a future energy mix and recognise the hurdles new nuclear investment faces in a liberalised market.

The Paris-based IEA said Sweden must replace its ageing nuclear plants between 2022 and 2035, assuming an operational lifespan of 50 years for each reactor.

The centre-right coalition government in 2010 overturned a nuclear phase-out policy, dating from the 1980s, by permitting construction of new plants to replace Sweden's existing 10 reactors, which now provide about 40 percent of its electricity.

It insisted at the time this would not involve financial support from the government, although the high initial costs mean companies hesitate to invest in nuclear without help.

Hatt said Sweden will stick to its position in spite of the British deal and that the European Commission should examine any possible distortion to competition in the common EU market.

"I won't judge on what kind of choices Great Britain makes, that's an issue for the British government and the people that have appointed them. But it is very important that the Commission looks into the issue," she said.

The British project will need EU approval in the coming months.

In Paris for the biannual International Energy Agency's ministerial conference, the minister said she would seek in her keynote speech to explain to delegates how Sweden managed to promote renewable energy without imposing a burden on energy-intensive companies and consumers.

The cost of renewable energy subsidies for an average Swedish household is only ten percent of what a German household has to pay, she said.

Sweden wants to add 25 terawatt-hours (TWh) in annual production from renewable sources by 2020, compared with 2002, using a market-based system that allows producers to get a premium on the energy price by selling green certificates.

($1 = 0.6210 British pounds)

(Editing by Muriel Boselli and William Hardy)

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Comments (1)
Jack_Lindsay wrote:
So it’s “Subsidies for me, but not for thee.” Wind and solar advocates often talk about a level playing field, but I see it’s not going to happen in this case.

Britain’s recent agreement to a ridiculously inflated strike price with EDF/AREVA is certainly something that neither Sweden nor any other country should emulate, that much is certain. If the UK gets reasonable in future nuclear builds they should be able to cost-average that bad deal down for their citizenry. Not surprising that Vattenfall would push for similar giveaways in Sweden.

The introduction of large amounts of wind and solar is definitely throwing the old utility company business model into disarray, especially in Germany and its neighboring countries. Wind and solar not only receive feed-in tariffs but are guaranteed sales of their juice as the lowest-cost provider at any time. Since nuclear power fuel costs are trivial, if the playing field were truly leveled nuclear would be similarly characterized, and feed-in tariffs for all sources would be eliminated. As things stand now, wind and solar get subsidized and when they’re producing more than anybody needs or wants (usually at night in the winter), nuclear power providers sometimes have to pay as much as 200 Euro/MWh to dump their electricity into a market with negative pricing. Yet if the wind suddenly stops blowing they’re expected to pick up the slack. Good luck if such a tilted playing field drives out the nuclear power plants. It’ll be coal and gas that end up providing the electricity most of the time, not wind and solar.

Germany is leading the way in exposing the problems with a dependence on “unreliables”. Other countries should watch very carefully but be extremely cautious in emulating a very costly experiment with dubious prospects of success.

Nov 21, 2013 2:43pm EST  --  Report as abuse
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