Vattenfall

On 31 July the Swedish state-owned power company, Vattenfall, submitted a preliminary application to the regulator concerning the construction of one, possibly two nuclear reactors in Sweden. Considering that Sweden long had a total ban on planning new reactors, such a move might be expected to be hot news – particularly since Vattenfall is owned by a government that professes to promote environmentally sound energy solutions. But it wasn’t.

The ban on planning new reactors was lifted in January 2011. New nuclear reactors are now possible, but the total number may not exceed the present ten. In other words, any new reactor has to replace one that is taken off line. Furthermore, the amendment requires any new reactor to be placed in one of the localities that currently host a nuclear plant. 

Vattenfall’s presentation of the initia-tive makes interesting reading. Practically every third sentence of the press release assures the reader that “this does not mean we are planning to build a reactor”. Instead, the purpose of the application, according to Vattenfall, is to obtain a checklist of the requirements that would have to be fulfilled. The regu-lator’s work on the specifications is ex-pected to take about three years. Only then can the company properly judge the scope and business prospects of constructing a new reactor. 

Besides the cost of construction, other factors that will affect the decision are (1) the estimated relationship of supply to demand for electricity on the Swedish and European markets in the late 2020’s, and (2) the availability of financing and interest on the part of partners in the private sector. Vattenfall notes that its owners require that any venture the company engages in has to be “both profitable and sustainable”. This is a new specification, added after the company’s adventures in Germany (brown coal and nuclear) which eventu-ally led to an abrupt change of management in early 2010 and brought the then-Minister of Industry under fire.

Should the venture seem to be potentially profitable, a long and intricate process will ensue. First, the Radiation Safety Authority will examine a detailed application and solicit the views of several agencies (the Swedish Environmental Protection Agency, the Swedish Agency for Marine and Water Management, the Swedish Work Environment Authority) and Svenska Kraftnät, the state-owned public utility that manages the grid. Thereafter, the Authority will make its recommendation to the Government. Parallel with this process, a court will examine the application in light of the requirements of the Environmental Code, focusing on environmental impacts. All in all, approval would probably take 10-15 years. The reactor itself would come on line in 2025, at the earliest.

Political X-factors
Nuclear power is a divisive issue in Sweden, not only between parties but within them. Add to that the distant time horizon and the questions outnumber the answers by far. The decision to lift the ban on ‘new build’ was taken by a Conservative-led coalition of four parties, two of which - the Center Party and the Christian Democrats – have reversed their previous anti-nuclear stance in recent years. The rank-and-file of each are divided. According to the polls, both are dancing around the 4 per cent threshold to representation in Parliament. (The parties’ position on nuclear power is not the reason for the parties’ decline; the reversal of policy on nuclear rather reflects more general factional strife.) In sum, the future of the ruling coalition is highly uncertain. The next general elec-tions are to be held in September 2014.

With the exception of the Greens, the opposition parties that are expected to form a coalition should the current government be ousted have spotty records on nuclear power. The Greens, hardly as large a party in Sweden as in, say, Germany, are alone in their consistent opposition to nuclear. The Left, smallest of the opposition parties, is divided between two priorities: jobs versus the environment. The newly elected party leader, however, has a strong record on environmental issues, energy included. The Social Democrats, largest of the three, are a mixed bag: the most recent party congress formulated the goal of successively replacing the nuclear plant with energy from renewable sources, but at a pace that “poses no threat to either jobs, welfare or the environment”. The newly elected party leader, however, was strongly pro-nuclear when he led the metalworkers’ union. He and the energy spokesperson who commented on Vattenfall’s initiative speak of drafting an energy policy that the whole of Parliament can agree to. Just how strong the party’s commitment to renewables is, and where the Social Democrats might land on the issue 10- 15 years from now, is hard to say. 

Motives
Why the application? From a business point of view it is only natural for a nuclear power company to plan for the future. If an inquiry addressed to the re-gulatory authority is the only way to gain a clear picture of future requirements and costs, an application is reasonable enough.

Why state-owned Vattenfall? Over a year has gone by since the government lifted the ban on planning for new reactors. No private actor has stepped for-ward, albeit some major users of energy (the paper-pulp industry, for example) have urged ‘someone’ to take the initiative. It seems likely that the government may have used its influence as owner of Vattenfall to get the ball rolling. A second probable reason is that Vat-tenfall owns 70.4% of Ringhals AB, two of whose reactors are, even today, aged, faulty and costly. One commentator indicated Ringhals, south of Gothen-burg, as the likely site of renewal.

Why now? Sweden is at mid-term in the current election period. Waiting until closer to the next election would heighten the risk of political fission that nuclear power implies – for everyone but the Greens. 

Sources: The Swedish Radiation Safety Authority: www.stralsaker-hetsmyndigheten.se/start/Karnkraft/Vart-sakerhetsarbete/V... / Vattenfall’s press release:  www.vattenfall.se/sv/news-details_152996.htm?newsid=EE0 33D6727E24052BF75C979319646ED / and Application: Ansökan Dokumentnr 106880-M-2423 (pdf, in Swedish) Dagens Nyheter (web edition) 7 August, and miscellaneous media notices
Contact: Charly Hultén at WISE Sweden

On 23 June, E.ON Sweden announced plans to shut down two of the three reactors at Oskarshamn between now and 2020. The reactors' unprofitabiility is cited as the principal reason for the decision, but the move is also in keeping with E.ON's overall turn toward sustainable energy sources.

O1 and O2 (which started up in 1974 and 1972, respectively) are Sweden's oldest reactors, and are also among the four smallest. As reported earlier this year, Vattenfall announced plans to close its oldest reactors, R1 and R2 at Ringhals, in about the same time frame.¹

Interviewed after E.ON's announcement, a senior consultant to Vattenfall summed up the situation: "The way the energy market works today, all sources are pooled. The cheapest source gets to produce, and we [R1 and R2] weren't it."

E.ON's motives are the same. Like Vattenfall, it sees no prospect of the price of electricity rising between now and 2020. The two companies are simply cutting their operating losses. In this present case, however, E.ON, which owns 54.5% of the operator, OKG, has taken the decision against the will of minority owner, Fortum (45.5%).

The closure of four reactors within the next five years will bring the Sweden's nuclear park down to half, from twelve to six. Nuclear production capacity will, however, not be reduced by the same proportion. The remaining reactor in Oskarshamn (1985), for example, produces 30% more electricity than O1 and O2 combined. Yet, when Vattenfall announced the closure of R1 and R2, some analysts pointed to six reactors as a 'pain threshold', a point beyond which occasional electricity shortages in the south of Sweden could not be ruled out.

Sweden has got by without O1 and/or O2 for some time. Both have long suffered the frailty of old age. O1 has been on and offline intermittently for years. O2 was taken offline in 2006 for 'modernization' – a project that to date has cost approximately 8 billion SEK (€854m; US$928m) The reactor is scheduled to resume production at the end of 2015, but whether it actually will be brought online remains an open question. As noted above, the owners are not in agreement.

Why pour 8 billion SEK into O2? In short: to convert the reactor to use mixed uranium−plutonium (MOX) fuel. It's a decades-long saga:

• In 1969, OKG contracted with Sellafield in England to reprocess waste from O1 and O2, soon to come online. Between 1969 and 1984 OKG shipped over 140 tons of waste and paid a total of 650 million SEK to have it reprocessed.
• In 1984, Sweden changed its policy, forbidding export of waste and mandating direct intermediate storage, pending the creation of a geological repository for nuclear fuel waste in Sweden.
• What to do with the waste already at Sellafield? In 2006, OKG was granted permission to use MOX fuel in O2 and O3. The decision was controversial, but authorities deemed import of MOX, made out of OKG's waste, to be more in keeping with the new policy.
• But Sellafield's backlog was long, and years passed. The Sellafield MOX Plant was also wracked with technical problems. In 2011, a decision was taken to shut it down, and in March 2014 Swedish authorities authorized OKG to sell the waste to the British Nuclear Decommissioning Authority, who pledged that it would not be used in nuclear weaponry. With the sale, the MOX scheme would appear to have ended.

Electricity prices

Electricity prices this year are the lowest since 2000. Favorable winter conditions have filled the northern dams. But nuclear's disadvantage on the market is not just of the moment. Analysts discussing the recent phase-out decisions point to longer-term trends. The 'Energiewende' in Germany, and large-scale private investments in energy efficiency measures and renewables (Södra Cell², a paper pulp factory a stone's throw from Oskarshamn, and IKEA, for example³), are depressing the market and will continue to do so. In addition, nuclear operators face costly investments to meet new safety requirements, such as external core-cooling systems – a lesson from Fukushima. On the margins, a rise in the Swedish reactor capacity tax has also been proposed.

Choosing to look to the bright side, Jonas Abrahamsson, CEO for E.ON Sweden, sums up the situation: "Under current market and political conditions, the trend is clear. We will see fewer, but larger reactors. O3, one of the largest reactors in Sweden today, producing more electricity than O1 and O2 combined, will play a strategic role in stabilizing the Swedish energy supply system for many years to come."

References

1. Charly Hultén, 7 May 2015, 'Sweden: Vattenfall announces early retirement of two reactors', Nuclear Monitor #803, www.wiseinternational.org/nuclear-monitor/803/nuclear-monitor-803

2. www.sodra.com/en/Energy/Production-and-consumption/

3. www.ikea.com/ms/sv_SE/this-is-ikea/people-and-planet/energy-and-resource...

Sources

In English:

Fortum: "Fortum would prefer continued operations at Oskarshamn nuclear power units 1 and 2" (Press release, 23 June 2015), www.fortum.com/en/mediaroom/Pages/fortum-would-prefer-continued-operatio...

In Swedish:

— Mats Knutson/Sveriges Television: "Två kärnkraftsreaktorer kan stängas", 4 juni 2015, www.svt.se/nyheter/inrikes/tva-karnkraftsreaktorer-stangs

— E.ON: "E.on föreslår ny inriktning för OKG" (Press release, 23 June 2015), www.eon.se/press#/pressreleases/e-on-foereslaar-ny-inriktning-foer-okg-o...

— Monica Kleja: "Eon vill stänga reaktor O2 i förtid", Ny Teknik, 23 juni 2015, www.nyteknik.se/nyheter/energi_miljo/karnkraft/article3917000.ece

— Monica Kleja: "'Tungt beslut för Eon'" Ny Teknik, 23 juni 2015, www.nyteknik.se/nyheter/energi_miljo/karnkraft/article3917025.ece

— Sveriges Television: "Eon vill stänga Oskarshamn 2", 23 juni 2015, www.svt.se/nyheter/inrikes/eon-vill-stanga-oskarshamn-2

A historic day for Swedish wind power

Wind power in Sweden passed a milestone on 31 May 2015. For the first time ever, Swedish windmills produced more wattage and energy (3,412 MW) than the country's nuclear reactors (3,386 MW). The period was only a little over 90 minutes, but is historic.

Professor Thomas Kåberger, former Director of the Swedish Energy Agency and perhaps Sweden's foremost expert on energy, said:

"When nuclear power operates at maximum capacity it can produce 10 GW, whereas maximum production for wind power is roughly half that much. But, for various reasons both nuclear reactors and wind power often operate at less than maximum capacity. Wind power output is predictable because it depends on how windy it is. Nuclear power is less sensitive to the weather, but it is susceptible to technical problems that result in major, sometimes totally unexpected, outages. These past five years, Sweden oldest reactors have not been producing well, and at the moment, for a variety reasons, seven of the ten reactors are down. ..."

Wind power is often criticized for not producing the same amount of energy from day to day. But, as Svensk Vindernergi (Swedish Wind Energy trade association) points out, wind power outages are small relative to what happens when a nuclear reactor is taken off line:

"If seven out of ten reactors can be off line, and it doesn't result in any shortages, it shows we have a robust electricity supply system. It also shows that the system can handle the considerably smaller variations associated with wind power production."

One might say the 'record' is a fluke. On May 31, after all, only three nuclear reactors were on line. But, statistics show that on a regional basis, wind power production is often second only to hydro (see nordpoolspot.com). Svensk Vindernergi is confident that this will occur even more frequently as wind power continues to attract investments. In Sweden today, wind power has a potential for expansion on a large scale at the lowest cost per watt.

Sources

− "Milstolpe: Vindkraften spöade kärnkraften" Miljöaktuellt, 1 juni 2015, http://miljoaktuellt.idg.se/2.1845/1.629411/historisk-ogonblick-nar-el-f... an-karnkraft

− Svensk Vindenergi: "Vindkraft har stor betydelse" (press release), 2 juni 2015, www.vindkraftsbranschen.se/blog/pressmeddelanden/vindkraft-har-stor-bety...

On 28 April, Vattenfall CEO Magnus Hall announced that the company will shut down Ringhals 1 (a boiling water reactor that came online in 1976), and Ringhals 2 (pressurized water reactor, 1975) between 2018 and 2020. This is instead of sometime between 2020 and 2025, as previously planned. The announcement follows on the heels of Vattenfall's decision to close its R&D unit devoted to 'new build' (as reported in Nuclear Monitor #797).

The move will bring Vattenfall's remaining fleet down to five reactors, all of which, the company claims, can continue to produce electricity into the 2040s – a planned lifetime of 60 years. (Another three reactors are operated by OKG, a consortium owned by E.ON Sverige and Fortum.)

R1 and R2 are Sweden's oldest reactors, aged 40 and 39 years, respectively. Both reactors are relatively small and currently operate at a loss, due to a sustained fall in electricity prices on the Nord Pool exchange (www.nordpoolspot.com). Actually, R2 has not produced electricity since August 2014, when a routine inspection found corrosion on the bottom of the containment vessel. The reactor is expected to be out of commission until this coming Fall, at the earliest.

Some compensation for the problems in R2 and the early decommissioning of both R1 and R2 will be provided by an increase in the output of R4 (see box below).

Magnus Hall noted that Vattenfall will be shifting its focus toward sectors of the energy market that are less sensitive to the price of electricity. Alongside a stronger emphasis on renewables, Vattenfall will get more involved in district heating and consultancy in the field of energy efficiency.

Is it the market or political directive?

Vattenfall has been explicit in explaining why the company is making the move: "Electricity prices are on the way down, our costs are going in the opposite direction," Hall told Sveriges Radio in an interview after the announcement. "Market prices are too low, and we see no other way out," he continued.

Vattenfall's press release is equally unequivocal, noting that the company anticipates "continued low electricity prices in coming years", that it faces "increasing production costs", and that the decision on R1 and R2 was "business driven".

The Government, for its part, flatly denies that political pressure has been brought to bear.

In most countries, that would be convincing enough. But Sweden is into its third decade of bitter squabbles over the outcome of an advisory referendum on nuclear energy in 1980 that divided the political spectrum as well as individual parties. Positions taken back then have become entrenched in some quarters.

As a consequence, the Liberal Party leader, the Confederation of Swedish Enterprise and the political editors at leading Conservative newspaper, Svenska Dagbladet, were all quick to conclude that government pressure lay behind the decision. The current Social Democratic and Green Party Government has made it hard for Vattenfall to turn a profit, they argue, pointing to a recently announced Bill that would raise the tax on reactor capacity (not actual production) as the culprit.

The capacity tax was introduced in 2000 by a Social Democratic Government. In 2008 a Conservative-led Government more than doubled it. A current Bill that proposes to raise the tax again (by 17%) will be debated in Parliament later this month. If passed, it will take effect in August.

Neither Vattenfall's press release nor the CEO's remarks made any reference to the tax.

The consensus view is this: The market is achieving the phase-out that Sweden's politicians have been unable to agree on. The Liberal Party and the Conservatives complain, but only the Sweden Democrats – a nationalist-populist party that received 17% of the vote in last year's election, but remains a pariah in the eyes of all established parties – advocate state subsidization of nuclear energy.

"The other parties are willing to let the phase-out happen," said Tomas Ramberg, a political commentator with the (publicly-funded) Sveriges Radio, in a roundtable discussion. No-one at the table objected.

Another participant in the roundtable discussion was Per Lindvall, economic analyst for Svenska Dagbladet, whose political editors are so eager to blame the Government. Mr Lindvall sees Vattenfall's decision as simply an effective means to cut the company's losses. It is also a "wise" strategy from the company's point of view to reduce overall electricity output, he said.

What are the consequences?

Is this 'the beginning of the end' of nuclear energy in Sweden? Yes and no. More and more Swedes are recognizing that nuclear energy can be a costly habit. Finland's fifth reactor, under construction at Olkiluoto, now at about 270% of the original budget, and the massive subsidies being offered by the British Government to French utility EDF to build new reactors in the UK, have cooled most parties' enthusiasm for 'new build', and subsidization is out. But, as Sweden will still have eight reactors in operation, and the owners envisage reactor lifetimes of up to 60 years, reliance on some amount of nuclear energy will probably be in the picture through the 2030s.

Will the country's energy supply suffer? Not immediately, perhaps not at all. The dominant assessment sees a risk of shortages in the south of Sweden, but only if Sweden's next two oldest reactors, O1 and O2 at Oskarshamn, are taken offline, as well. OKG, the reactors' owner, has complained of operating losses for the same reasons Vattenfall puts forward in relation to the Ringhals 1 and 2. Whether Vattenfall's decision will have any effect on OKG's strategic thinking remains to be seen.

Energy experts caution that the current price-cost ratio may lead to additional phase-outs. As a preparedness measure, Minister of Energy Ibrahim Baylan proposes to extend the maintenance of prepaid capacity reserves managed by Svenska Kraftnät, which operates the national grid. These reserves lie idle until they are needed, for example, under extreme climate conditions when industry is producing at full capacity.

Nuclear owners' decisions to reduce output may, some commentators predict, make it easier for the parties and interest groups to get past the issue of "nuclear energy, for or against" and reach agreement on how to secure the country's power needs. If so, it would definitely facilitate the work of the Energy Commission that the Prime Minister plans to convene.

Will electricity prices rise? Yes, but only moderately in the short term. The only estimate put forward in connection with Vattenfall's latest announcement puts the price rise at +0.01 SEK in 2018, an increase of 3.7%. Predictions for the longer term are uncertain – mainly due to the impact of renewable energy sources and the addition of a fifth Finnish reactor in the region.

Higher prices would not be an unmixed evil. Should prices show a sustained upward trend, it would provide an inducement to Swedish industry to start using currently unexploited in-house energy reserves such as process heat, back pressure, and energy-rich chemical by-products and wastes.

Sources:

English:

Vattenfall: Vattenfall changes direction for operational lifetime of Ringhals 1 and 2, press release, 28 April 2015, http://corporate.vattenfall.com/news-and-media/press-releases/2015/vatte...

Swedish:

Ringhals reaktorer stängs tidigare (TT/Ny Teknik 28 April 2015), www.nyteknik.se/nyheter/energi_miljo/karnkraft/article3904252.ece

Monica Kleja: Ringhals 4 får höja effekten (Ny Teknik 4 February 2015), www.nyteknik.se/nyheter/energi_miljo/karnkraft/article3881618.ece

Sveriges Radio/P1 Studio Ett, 28 April 2015, http://sverigesradio.se/sida/artikel.aspx?programid=1637&artikel=6152756

Björn Dickson, Anna De Lima Fagerlind: Olönsam kärnkraft stängs i förtid (Svenska Dagbladet Näringsliv, 29 April 2015, www.pressreader.com/sweden/svenska-dagbladet/20150429/.../TextView

Peter Akinder: Vattenfall stänger reaktorer (op ed piece, Östra Småland/Nyheterna, 29 April 2015), www.ostrasmaland.se/ledare/vattenfall-stanger-reaktorer/

Ökad press på politikerna (Östra Småland/Nyheterna, 29 April 2015)

More power from Ringhals 4

The decision to raise the productivity of a 'middle-aged' reactor like R4 by 18% was long in the making. Vattenfall applied for permission in 2007; the regulator gave permission in February of this year. Whereas the past government was favorable all along, several members of the engineering community and the regulatory authority expressed some concern about possibly damaging stress to aging reactor components (valves, etc.).

In the interval, R4's steam generators and pressurizer have been replaced. Ny Teknik, the leading Swedish technical newspaper, reports that roughly 20 billion SEK (€2.1b, US$2.4b) have been invested in modernizing the four reactors at Ringhals over the past 10 years.

If R4 passes all the tests, to be conducted this year, sometime in 2016 it will start to contribute an extra 1.3 terrawatt-hours per annum, assuming trouble-free operation.

In this context it might be mentioned that Oskarshamn 3 (BWR, 1985) has just completed a similar test period and came online in January. Capacity there is now 1450 MW.

Source: 4 Feb 2015, www.nyteknik.se/nyheter/energi_miljo/karnkraft/article3881618.ece

Vattenfall, the state-owned Swedish power company, announced on January 23 that it has terminated all work to develop a new generation of nuclear reactors in Sweden. The company has also withdrawn its application for a permit for new nuclear build, submitted in 2012.

In 2012, the company made it clear that the application did not necessarily mean that they intended to build a new reactor, only that they wanted to assess the prospects of launching a new generation of reactors. In order to make a full assessment, they needed to initiate a process within the regulatory agency, SSM (Swedish Nuclear Safety Authority). Hence the application.

Since then, Vattenfall has put millions into the project. But the January 23 announcement definitely has a ring of finality. The unit dedicated to developing new reactors has been disbanded. Some 40 Vattenfall employees are affected; some will be transferred to other positions, some are being offered retirement. "No one at Vattenfall will be working with New Build," said Mats Lideborn, who headed the unit, in response to a direct question. 

The withdrawal of the application has an impact on the regulator, as well; 15 or more employees assigned to deal with Vattenfall's application now face transfer or retirement.

On January 15, only days before these steps were made public, Vattenfall announced a major reorganisation at group company level. The company will henceforth be organised according to function: Heat, Wind, Distribution, Generation, etc. The company's controversial lignite operations in eastern Germany have been carved out to form an independent unit, with the intention of sale in the coming year (at the urging of the new Board of Directors).

CEO Magnus Hall described the changes as strategic: "Vattenfall operates in a challenging market climate, where cost-effectivness and sustainability are key to success. ... A first step is to establish an overarching strategy. Some elements of that strategy are already clear: we need to defend our position as a European company and to develop our portfolio so that we can offer our customers more sustainable solutions. We shall also produce electricity with a focus on emissions-free or emissions-efficient solutions."

Directive or 'reality check'?

Initial press reports suggest that the new government ordered the change of course. In September 2014, Minister of Environment and Sustainability, Åsa Romson (Green Party), announced that the government would be exercising its ownership to guide Vattenfall away from nuclear power and toward sustainable energy sources. But within 24 hours her statement was qualified – not to say countermanded – by PM Staffan Löfven (Social Democrat), who stated that the future of nuclear power would be decided by a multi-stakeholder Energy Commission (see Nuclear Monitor #793).

That Commission has yet to be appointed. Yet, Vattenfall has taken these drastic steps.

It is possible, even likely, that Vattenfall instead may be responding to its own viability studies. Sweden has the benefit of plentiful hydroelectric power. The country's base-load is covered. And the market for electricity is rapidly changing. The per-kWh cost of renewables – wind power in particular – is falling, which is encouraging many actors to 'grow their own'. Several hangar-type store chains, IKEA among them, have announced plans to become energy self-sufficient through energy efficiency measures and installing rooftop photovoltaic. Cheaper renewable capacity means that spikes in electricity prices are nowhere near as sharp as they were only a year or two ago, and there is no sign that prices will rise again.

Vattenfall, to be sure, is itself a major actor in the wind power sector, with several large-scale farms in different parts of Sweden. In November 2014, the company boasted investments in wind power amounting to SEK 40 billion (€4.3b; US$4.8b) over the past six years and a doubling of its wind power production since 2011. Investments of an additional SEK 11 billion in Sweden and Europe overall are slated for the coming four years. The simple reason is that wind power is profitable.

Wind power accounts for roughly 7% of Sweden's electricity production (13 terrawatt-hours) today, but the share is steadily growing. Vattenfall's press release adds: "Our growth objectives for renewable electricity production stand firm, despite the tougher times that Vattenfall and the energy sector as a whole face today."

In August 2014, Mikael Oldenberg – formerly a Conservative politician, now Executive Director of Svenska Kraftnät, the national distribution utility − called nuclear new build "utopian". "There is currently no rational basis for investing in new nuclear capacity," Oldenberg wrote. Perhaps Vattenfall has simply come to the same conclusion.

Sources:

Ci Holmgren: "Total stopp för kärnkraft", Sveriges Radio/P1 (Eko newscast, 23 Jan 2015)
L A Karlberg: "Stopp för kärnkraft ger SSM personalproblem", Ny Teknik (23 Jan 2015)
Vattenfall: Ny organisation för Vattenfalls framtida strategi (press release, 15 Jan 2015)
Jan Nylander: "Vattenfall stoppar planer för ny kärnkraft", Sveriges Television (27 Nov 2014)
Vattenfall: Vattenfall bygger ny vindkraftpark för en halv miljard (press release, 7 Nov 2014)

On September 14, Swedish voters threw out a Right-centrist coalition that had been in power for eight years. The Social Democrats (31.0%) find themselves in a weak coalition with the Greens (6.9%), having chosen to exclude the Left (5.7%) from the government. Green Party leader Åsa Romson is Minister for Climate and the Environment and Deputy Prime Minister.

With less than 40% of the votes in Parliament, the new government faces the prospect of having to negotiate ad hoc majorities from issue to issue. The first hurdle, of course, was reaching agreement within the coalition. Non-socialist commentators touted energy policy as 'Mission Impossible' in this regard, even before the election. But to their – and perhaps even many Social Democrats' – surprise, on October 1 the parties announced that they had reached an agreement.

Up to then, the Greens were very clear on nuclear energy, urging a prompt phase-out – taking as many reactors off-line as possible, as soon as possible. The Social Democrats, however, have been of two minds regarding nuclear. For decades. Especially the party leader, now Prime Minister Stefan Löfven, who formerly headed up Sweden's most powerful union, IF Metall, has been hesitant about any move that might endanger investment in Swedish industry or Swedish jobs. Which, to his mind, a phase-out would do.

Meanwhile, the Social Democratic party congress has taken a stand for sustainability in the energy sector, favoring investment in renewable energy sources and aiming for a phase-out of nuclear when renewables and energy saving measures fill the gap nuclear would leave behind.

The new Social-Democratic Minister for Industry, Mikael Damberg, will head a red-green panel of ministers that will oversee the management of Vattenfall. Damberg has long spoken for the 'sustainability' wing of the party, but in recent weeks he has also characterised Vattenfall's demands on the German government as "reasonable".

The compromise reached between the two parties rests on the "as soon as possible" that unites all three groups, but does not specify either the number of reactors that can be taken off-line or when. Nor does it forbid future 'new build'. What it does contain is this:

• Nuclear energy shall "assume a greater share of its costs to society".
• Reactor safety shall be improved – e.g., cooling mechanisms that are independent of the reactor's status – lessons from Fukushima that are being acted out throughout the EU.
• The surcharge on electricity use, levied to cover the costs of waste management and storage, will be increased (albeit not enough to actually cover costs).
• State-owned Vattenfall has been instructed to suspend immediately all planning for new nuclear reactors − reputed to have cost well over 100 million SEK (US$13.7m; €10.8m) to date. Instead, the company shall focus on developing renewable energy sources.
• Alongside energy savings, offshore wind and solar power will be stimulated.

There is no parliamentary majority for phasing out nuclear energy. The new government is using its prerogative as owner of Vattenfall to issue a directive to the company. Vattenfall was the only actor in Sweden that actually had plans for 'new build'. Does this mean The End for nuclear power?

It is the first point above that is open to widely ranging interpretations. Put another way, it means an end to at least some of the de facto subsidies that nuclear power enjoys. But how far-reaching is the goal? Does it mean, for example, that reactor operators will have to take out liability insurance, like any other risky business? At present they do not.

The compromise has been applauded for its political sophistication. Other than the directive to Vattenfall, there is no fiat, no explicit prohibition of either R&D or investment in nuclear reactors. The 'how many' and 'when' is left to two extraparliamentary insitutions: the market, on the one hand, and a new Energy Commission, to be composed of major energy users, providers, authorities and politicians, that will be asked to discuss Sweden's path toward sustainability in the energy sector after 2020.

The principal motive for convening the Energy Commission is the PM's desire to assure the long-term stability of the new energy policy. Uncertainty has been perceived to be the Number One threat to the health of the economy, and a major deterrent to investments in energy saving technologies and a shift to renewable sources.

The glut

The truth is that Swedish nuclear energy is no longer the 'cash cow' that it once was. Sweden produces more electricity that it can use, and the export market is not what it used to be. The glut has depressed prices. The expected expansion of renewables, in combination with energy saving technologies, has dampened enthusiasm for investment in nuclear energy. Just when an ageing reactor park requires massive investment.

Some weeks before the election, Mikael Odenberg, CEO for Svenska Kraftnät (the state-owned power distribution utility), published his view, that there is currently no rational basis for investing in new nuclear capacity. Then, only days before the election, Oskarshamns Kraftgrupp (OKG) reported an operating loss of 2.5 billion krona (US$343m; €271m) for their two oldest reactors over the past two years. (Two additional reactors at Ringhals are equally small and old, but their owner, Vattenfall, has not publicly discussed their profitability.)

As for the proposed Energy Commission, the Prime Minister has stated the government's "position at entry" into the discussions: "Nuclear power will be replaced by renewable energy sources and energy savings." The immediate reaction from the most pro-nuclear parties and organisations has been one of shock. Vattenfall's new CEO among them. Energy-intensive industry and IF Metall are up in arms − but will no doubt take part in the discussions once their shock subsides. The Liberal Party leader complains that the outcome of the talks has already been decided and seems disinclined to take part. But the smaller former coalition parties are still in 'campaign mode'. Hopefully, they will get back down to the business of Parliament soon.

So, the situation at present is not entirely clear. The new government has signalled a change of course in the energy sector. Sustainability is the goal. But how long it will take to get the ship on course remains to be seen. The composition of the Energy Commission and its members' willingness to think outside their accustomed boxes will be decisive.

Energy Commission

In connection with the publication of a comprehensive progress report on the attainment of Sweden's sustainability goals, Erik Brandsma, Director-General of the Swedish Energy Agency, urges broad participation in the planned Energy Commission. In Dagens Industri on October 2, Brandsma wrote:

"As for the attainment of our goals, here is where we will stand in 2020:

• The goal of 50% renewable energy: We'll be at 55%.
• The goal of 10% renewable energy in the transport sector: It will actually be 26%, thanks to the use of bio-fuel additives.
• The goal of 20% lower energy intensity (energy efficiency measures) since 2008: 19%, but the figure is sensitive to GNP growth and the possible shutdown of a nuclear power reactor before 2020.
• The goal of 40% less CO2-emissions (since 1990) – we'll reach this goal, too, with the help of emissions reductions of 40 million tons outside Sweden's borders. ...

"Energy is decisive for our competitive strength and quality of life. The challenges will come after 2020. But to ensure that we can meet these challenges we need, now, to engage in a constructuve dialogue on energy systems of the future. We need to move on from a for-or-against debate over individual energy sources [a reference to the bitter legacy of Sweden's referendum on nuclear energy in 1980] and instead consider the whole.

"'The whole' implies a program of action that tackles energy efficiency, energy production, storage and distribution (the grid). And all this in an international context. Different groups having an interest in energy – industry, interest groups and politicians – have a lot of ideas about "what others should do", and they voice these ideas in seminars, studies and articles in the media. Now it is time for a constructive dialogue, in which all the participants shoulder a responsibility.

"A new Energy Commission may be a good vehicle for such a discussion. We have the data, but facts and documentation mean nothing unless they are used in constructive dialogue. We all have a common goal: a sustainable energy system for Sweden. This means competitive strength, security and minimal impacts on human beings, the environment and the climate."

Swedish Radiation Safety Authority: Second-rate safety good enough for old reactors

After the multiple meltdowns at Fukushima Dai-ichi in 2011, nuclear safety authorities throughout Europe have reviewed nuclear power plants' ability to withstand "extreme external conditions". In Sweden, the Radiation Safety Authority (SSM) has focused particularly on the need to have independent core cooling systems, i.e., systems that can supply cooling water to the core when existing cooling systems fail and the electricity supply has been cut off. The systems shall have a capacity to operate at least 72 hours and be designed to operate under highly improbable, up to one-in-a-million, conditions. So far, so good.

A memorandum circulated to operators on October 9 requires fully functional independent systems to have been installed in every reactor by 2017. But the memorandum also notes that, in the interval to 2020, SSM will accept so-called "intermediate solutions" which, they admit, may not provide the same level of safety as mandated. They mention mobile on-site backup systems – equipment that can be moved between reactors as needed – as one such solution. (Advantage: they are cheaper. The main drawbacks are three: the time it takes to get them on-site and set up, whether they can be moved under emergency conditions; and they can only serve one reactor at a time.)

Ironically, SSM finds such second-rate solutions appropriate for reactors that have been in operation longer than they were designed to be and may be expected to be taken offline "shortly after 2020".

This assessment drew immediate fire from Greenpeace Sweden. The organisation has long studied the problems of over-age reactors, and the statistics clearly show aged reactors to be risky business. Sweden has four reactors that are 40+ − two at Oskarshamn, two at Ringhals.

Rather than trying to save reactor owners' money, Greenpeace argues, the regulator should focus on safety. If their owners don't think the old reactors are worth the expense, maybe it's time to shut them down. Moreover, Greenpeace continues, the determination violates the Environmental Code, which requires use of "best available technology" in all aspects of nuclear safety. It is this last point that may well force SSM to think again.