Loans and guarantees
Government project published on Monday in Stockholm contained information about his preferred financing modelwhich would provide certainty of profits to investors. Financing instruments include government loans to support the construction and 40 years of guaranteed income transferred via the so-called Contract for Difference or CfD.
Blackout in Sweden
Sweden urgently needs new powers. In the coming years energy demand will double thanks to the larger electrification of the economy. The country currently has six reactorswhich provide about one third of the power, and water and wind turbines are responsible for most of the rest.
Czech Financing Model
Finding financing is one of the biggest problems for nuclear energy. Building reactors costs many billions of dollars, and their construction takes years. Unfortunately, this is reflected in the final bill for building the plant. The model presented on Monday was based on Czech experiences related to financing of new units in the Dukovany complexThe Swedish plan involves financing a program with a capacity of up to 6,000 megawatts, which would involve the construction of four large-scale reactors.
“We looked at it a lot Czech model” – he said at a press conference in Stockholm. Mats Dillenwho led the study on behalf of the government. “(The program) was recently approved by European Commissionwhich makes it interesting for us because it allows us to accept support modelwhich we know has the blessing of the Commission.” The new proposals will be sent for consultation to various institutions, companies and government agencies before they are adopted by the government.
Contract for Difference, what is it?
Cfd Financing Model is also used in the one belonging to Electricite de France Hinkley Point C power station in the UK. Under this mechanism developers and the government set a fixed price for electricity for a specific periodthus providing certainty of steady future revenues. If market prices fall too low, the energy producer receives a subsidy from the state. On the other hand, the power plant operator must return the difference if the market rate is higher. Among the strategic energy companies that are considering building new reactors are also state-owned company Vattenfall AB and Finnish Fortum.
Sweden’s energy production in 2022 to be dominated by hydro and nuclear power / Bloomberg
In contrast to the financing scheme for Hinkley Point, the total estimated cost of which is around £47.9 billion ($61.2 billion) at today’s prices, the suggested model for sweden also includes public loans to finance the construction. According to the proposal the government would finance it in the form of a loan 75 percent of the investment costs, which Dillen believes could increase public debt by approximately 300 billion Swedish kronor (28.5 billion dollars).
Risk divided between three participants
“When the owner, the state and the customers they will share profits and risks together – Financing costsand will drop significantly,” said Jesper Marklund, Head of New Nuclear Projects at Fortum Oyj. “This will benefit both households and industry, as well as will strengthen Sweden’s competitiveness”.
Vattenfall’s Doubts
In a comment posted on his website Vattenfall said he agreed with many of Dillen’s arguments, but it was unclear how the state would ensure that the first group of new reactors will actually be built.
They both want and are afraid of nuclear energy
Sweden has ambivalent attitude towards nuclear energy since it was launched in 1972 first commercial reactor. Growing grassroots opposition in the following years culminated in a 1980 referendum calling for the dismantling of all reactors. Ultimately, this demand was not implemented. The winning center-right coalition in the 2022 elections made the renaissance of cheap nuclear energy pillar of his election campaign.
When will the first reactors start operating?
Government road map It is assumed that by 2035 at least 2,500 megawatts of power. That’s enough for powering approximately 2.5 million European homes. This is confirmed by Vattenfall, which claims that the fastest new reactor could be launched in the first half of the 2030s.
One of the possible places where new nuclear power plant could be built on land adjacent to the Ringhals plant on the country’s west coast. The government is trying to pave the way for new units through legislation and more than 10 studies similar to the one on financing.
