Swedish energy earnings slump after green tax

Sweden's state-owned energy group Vattenfall has reported a record loss for 2015, blaming a tax on nuclear energy and sliding electricity prices.

Swedish energy earnings slump after green tax
A security guard outside Vattenfall's Stockholm HQ. Photo: Maja Suslin/TT

Vattenfall's net loss came in at 19.8 billion kronor (2.1 billion euros, $2.3 billion), compared to an 8.3-billion-kronor loss the previous year, while sales eased one percent to 165 billion kronor.

“The major challenge in 2015 continued to be the impact that today's very low electricity prices have on Vattenfall's profitability and on the valuation of our assets,” Vattenfall chief Magnus Hall said in a statement.

“Continued falling prices and a nuclear tax corresponding to SEK 0.07 per kilowatt-hour have put Swedish nuclear power in a critical situation,” he said.

Vattenfall has had to write down over 36 billion kronor due to the early closure of two nuclear reactors in Sweden, which became unprofitable because of stringent safety requirements.

It has also experienced the depreciation of coal assets in Germany in 2015 as a consequence of the German government's target to curtail energy production with high CO2 emissions.

The firm has already said it will shed 1000 jobs in northern Europe.

The closure of the brown coal plants in Germany ignited hot political debates in both Sweden and the northern European nation amid shift towards more non-renewable energy sources in both countries.

In Germany power companies demanded subsidies to keep spare capacity active on the grid in case renewable sources generated less power than they had hoped for.
The German government rejected this but still plans to pay hundreds of millions in compensation to companies – including Vattenfall – forced to close brown coal plants between now and 2020.

Sweden's Green Party called on the previous centre-right Swedish government to avoid allowing Vattenfall to sell on the sites, arguing that the move amounted to encouraging other firms to continue producing emissions that harm the environment.

After entering into coalition with the ruling Social Democrats, the party argued that sales could go ahead if buyers could demonstrate that their strategies included “tangible climate benefits”.
Vattenfall also has operations in the Netherlands, Denmark, the UK and Finland.