Big Story 10

E.ON, Fortum confirm Swedish nuclear plant closures

OSLO (Reuters) - Germany’s E.ON and Finland’s Fortum confirmed on Wednesday they would shut two nuclear reactors at the Oskarshamn plant in Sweden before the end of their planned life.

The 638-megawatt (MW) Oskarshamn-2 unit will not restart after maintenance while the 473 MW Oskarshamn-1 unit will be shut and decommissioned once the Swedish authorities grant a permit.

The decision to shut the two reactors, the oldest in Sweden, came as a result of persistently low Nordic power prices combined with a nuclear capacity tax in Sweden that made operations at the plants unprofitable.

It was not possible to say when a permit would be granted for Oskarshamn-1, but the decommissioning was expected to happen in 2017-2019, the plant’s operator OKG told the Nordic power exchange in a market message.

Oskarshamn-2 has been offline for maintenance since May 2013 so the decision means it will never resume production, OKG said

The shutdown plans, previously announced by E.ON, were confirmed at a shareholders meeting of OKG, which is 54.5 percent owned by E.ON and 45.5 percent by Fortum.

“There are no prospects of generating financial profitability either in the short or the long term, neither for the unit 1 nor for the unit 2,” OKG said in a statement.

The two reactors, in operation since 1972 and 1974 respectively, were expected to operate for at least 50 years.

The third, newer and larger unit at the plant, the 1,400 MW Oskarshamn-3, was expected to operate until 2045, OKG said.

Fortum has said the closure of the two Oskarshamn units before the end of their planned life will have a one-off negative impact of about 700 million euros ($800 million) on its third-quarter net profit this year.

Fortum will report quarterly results on Oct. 22.

Longer-term Nordic power prices were little changed by the news as the market has already priced in the shutdown. The forward power contract for delivery in 2019 firmed by 10 cents to 24.30 euros per megawatt-hour (MWh).

Reporting by Nerijus Adomaitis; editing by David Clarke