Pricey power threatens Swedish industry: CEO
Published: 10 Dec 2010 11:59 GMT+01:00
Updated: 10 Dec 2010 11:59 GMT+01:00
The head of a Swedish pulp manufacturer forced to shut down production has slammed the country's high energy prices, citing Sweden's lack of energy policy as a threat to the industry.
"Energy companies earn a lot of money from the high prices. It is a perverse system that those who profit from this are the electricity companies," Rottneros CEO Ole Terland told the TT news agency.
Separately, Sweden's Ringhals 1 nuclear power reactor in Varberg 60 kilometres south of Gothenburg on the country's west coast was shut down again on Friday.
Rottneros has decided to suspend production at its so-called CTMP (chemithermomechanical pulping) line at its Rottneros mill north of Karlstad in western Sweden for about 10 days.
Extremely high electricity prices combined with high wood costs makes sales unprofitable, according to a company statement.
"Sweden cannot live with double the energy prices of the rest of the world and believe that we can still have energy-intensive production. It will never happen," said Terland.
According to him, the greatest problem is that Sweden has no energy policy. He added that it is absurd that Swedish energy producers benefit from electricity shortages that currently affect electricity-intensive industries.
He is also particularly critical of how nuclear power plants are operated.
"We have terribly poor maintenance and operational availability at our nuclear power plants. That is the core problem. I don't understand why Sweden is much worse than other neighbouring countries," he said.
Ringhals 1 was closed after a new fault was discovered, newspaper Hallands Nyheter wrote on its website on Friday.
The reactor was restarted last Friday after an audit, but was taken offline overnight on Monday, when a measurement error was found.
On Tuesday, the reactor resumed production with the hope that it would reach full power later in the week.
However, the reactor was disabled again on Wednesday evening for repairs and is not expected to restart until next Thursday.
"It is unfortunate that this takes place during a cold snap, but we cannot compromise with security," Gösta Larsen, communications director at Ringhals, told the newspaper.
The interruption at the Rottneros mill will result in the loss of half of its production and affects one-fifth of the entire company's output.
"This is a consequence of ineffective energy policies. Factories cannot run when the owners need to send money for every tonne that they sell. As a consequence, they have to close production," said Christer Larsson, economist at the Swedish Paper Workers Union (Pappers).
The most important task is to solve the long-term problems, he added.
"It is about getting more energy sources at lower costs than what we currently have on the margin. It is clear that upgrading nuclear power plants is of immediate importance and the need for new nuclear power plants as well," said Larsson.
"However, it requires a broad political agreement so that it remains in place through several terms of office," he added.