Politics in Sweden: Where's the money coming from for new nuclear?

To judge by the headline and the soundbites, last Wednesday's press conference by climate and environment minister Romina Pourmokhtari marked the launch of a massive new buildout of nuclear power. 

"Sweden needs three times as much nuclear power in 20 years," ran the headline of the press release.

"This government has worked nonstop from day one to sweep away the barriers standing in the way of building new nuclear in Sweden," Pourmokhtari followed up when she took to the podium. 

But when it came to the really big question, "where's the money going to come from?", she provided nothing but obfuscation. 

In reality, the press conference was about something technical dressed up to seem more important than it was.

Pourmokhtari was being presented with a report from the Radiation Safety Agency, originally ordered by the former Social Democrat government, on regulatory reforms to make the permitting for new nuclear more efficient. 

She said that the government would push ahead with changing the law in line with the agency's recommendations, which would mean, among other things, removing rules that limit the total number of reactors allowed in Sweden to ten and new nuclear to existing sites, and that give local municipalities a veto.

But as Peter Alestig, climate editor at DN, pointed out in an article, and as the Lund University professor Lars J Nilsson, told the UK's Guardian newspaper, none of these changes will make a jot of difference so long as the key question of how to subsidise investment in new nuclear remains unanswered.

When asked whether she favoured giving energy companies direct government subsidies to build a new nuclear plant or guaranteeing new plants an electricity price high enough to ensure profitability, Pourmokhtari suggested neither would be necessary. 

If all of the unnecessary limits and special rules for nuclear were swept away and there was a level regulatory playing field with wind and solar power, she said, private developers would step forward of their own accord. 

It wouldn't, she added, even be necessary to give Sweden's state-owned power company Vattenfall an order to build new nuclear plants, which the government is empowered to do. If the regulations were less onerous, Vattenfall would decide to do it itself. 

But that simply isn't true, something she presumably must know. 

A report this May by the energy consultancy Wood Mackenzie found that the cost of electricity from nuclear power, when construction and operation costs are taken into account, was "at least four times that of wind and solar".

This is why Nilsson told The Guardian that Pourmokhtari's announcement was purely "symbolic" unless the subsidy issue was addressed. “I don’t expect any new nuclear power in Sweden, unless the government provides quite far-reaching guarantees similar to what you have at Hinkley Point [in the UK]," he said. 

The government is preparing a package of measures to promote new nuclear to be announced in the autumn, Pourmokhtari said, and she has told Alestig that "if [new nuclear] requires that kind of measure, then we quite simply have to do it". 

It seems unlikely, though, that even this pro-nuclear government will offer energy companies quite as generous a deal as the UK did to get Hinkley Point built.

At the press conference, Pourmokhtari made much of additional funding the government was giving to the Swedish Radiation Safety Authority and the Swedish Energy Agency. 

But this extra funding totals only about 200 million kronor over two years, an infinitesimal fraction of what will be needed. 

Hinkley Point, the UK's new nuclear plant, is now expected to cost a whopping £32.7 billion (€45 billion), and is already two years late. Finland's Olkiluoto 3 came into production 12 years late last year at a cost of €11 billion. 

Now multiply that by ten. 

Pourmokhtari seems convinced energy companies will stump up this colossal sum, and soon, sticking fast to the government's target of "breaking ground" on the first of Sweden's new nuclear plants before the next election in 2026.

Not only did she think this was possible, she told the gathered journalists. She fully believed it would happen. 

We've got three years to find out. 

Politics in Sweden is a weekly column looking at the big talking points and issues in Swedish politics. Members of The Local Sweden can sign up to receive an email alert when the column is published. Just click on this “newsletters" option or visit the menu bar.