May 29, 2013 / 12:51 PM / 6 years ago

INTERVIEW-Sweden stands by refusal to subsidise new nuclear

* Nuclear provides 40 percent of Sweden’s electricity

* Existing reactors to be phased out from 2022

* Government subsidies favour renewable investment

By Nerijus Adomaitis

STOCKHOLM, May 29 (Reuters) - Sweden’s government will not subsidise new nuclear power stations, the energy minister said, sticking by a policy that casts doubt on the sector’s long-term survival after the major operator sought to delay new investment.

The centre-right coalition government in 2010 overturned a nuclear phase-out policy, dating from the 1980s, by permitting construction of new plants to replace Sweden’s existing 10 reactors, which now provide about 40 percent of its electricity.

But it insisted this would not involve financial support from the government, although the high initial costs mean companies hesitate to invest in nuclear without help.

Reflecting this reluctance, operator Vattenfall last week said it was seeking leave from regulators to run five of its seven reactors for a decade longer than planned, which would put off a decision on fresh investments.

Energy Minister Anna-Karin Hatt said the government had not changed its stance.

“There will be no public subsidies for new nuclear in Sweden,” Hatt said in an interview.

“We say to the market: it’s up to you to decide on the energy sources you want to invest in,” she added.

According to the International Energy Agency (IEA), Sweden must replace its ageing nuclear fleet between by 2022 and 2035, assuming an operational lifespan of 50 years for each reactor. Its policy on state support is unlikely to result in investment in new nuclear capacity.

“Very few examples of successful outcomes using such an approach exist and it is the reason why countries such as the United Kingdom have opted for introducing some price certainties for investors in nuclear power plant construction,” the agency, energy adviser to 28 industrialised countries, said in a report earlier this year.

(IEA report: here

Germany’s E.ON and Finnish utility Fortum also have investments in Sweden’s nuclear sector.

MORE RENEWABLES

Hatt said Sweden needed to diversify away from large-scale hydro - which also provides about 40 percent of current supply, and nuclear power generation.

“Due to environmental and economic reasons we need to make sure we build more legs to stand on, which is really important in a country that is so much dependent on energy,” Hatt said.

She said the country still had unexplored wind power potential, and with falling prices of photo-voltaic equipment Swedes were also interested in developing micro solar generation.

Sweden wants to add 25 terawatt-hours (TWh) in annual production from renewable sources by 2020, compared with 2002, using a market-based system that allows producers to get a premium on the energy price by selling green certificates.

The system has so far delivered about 15 TWh in annual production, mostly from biomass and wind, equivalent to a tenth of the country’s total annual power production.

Norway joined the Swedish system in 2012, making it the world’s first cross-border renewable support scheme.

“We have found a very cost-effective way to stimulate the development (of renewables), and they are driving down power prices.” (Editing by Henning Gloystein and Anthony Barker)

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