In July, Nuclear Monitor reported that German power company E.ON announced its intention to shut down two of Sweden's oldest reactors in Oskarshamn between now and 2020 (NM #807, July 30).
Minority owner Fortum (45%) vehemently opposed the decision. So determined was Fortum that it even talked of buying out E.ON (54%) and taking over OKG, which operates three reactors in Oskarshamn. That was in early September. Nothing came of it.
In a last-ditch effort to save the reactors, Fortum and union representatives voted against the proposal in the OKG Board of Directors on September 30, which forced E.ON to take the issue to the shareholders. An extraordinary general meeting, held on October 14, confirmed the decision: O1 and O2 will be shut down.
The decommissioning process – lasting probably a decade or more – will get under way in 2017. Actually, O2 has been offline for nearly two and a half years for upgrading. That project is said to have cost €850 million. The reactor will never produce another kilowatt-hour.
E.ON's decision rested on two 'feet': (1) the company strives to develop sustainable energy sources, and (2) the two aged reactors at Oskarshamn are running at a loss – when they are actually running – due chiefly to the current drop in energy prices and unforeseen safety-related investments in the wake of the Fukushima disaster. E.ON's analysts see no prospect of profitability, even in the longer term.
Conversely, Fortum claims that shutting down the two reactors will cost it €700 million. The company's financial report for January – September 2015 does not specify the claim in detail, but the above-mentioned upgrading of O2 surely accounts for a major share. Roughly 25−30% of the amount would appear to refer to future payments to the waste and decommissioning fund that otherwise would be covered out of power sales. Fortum has opted to book the entire €700 million in the third quarter, this year.
The loss of O1 and O2 – smallish reactors whose combined output is no more than 1,111 MW – is not expected to have any palpable effect on the future price of electricity in the Nordic energy market. But the impact in Oskarshamn will be substantial. 500 of OKG's currently 900 employees will lose their jobs, and OKG is the major employer in the community of roughly 26,000 people. E.ON has expressed hopes that the reduction can be achieved through pension agreements.
The shutdowns will also impact the finances of Karlstad, a municipality distant from Oskarshamn, which has held a 2.13% share in OKG for some fifty years. Once a 'cash cow' for the municipality, ownership of OKG in recent years has been a burden, and divestment has been debated repeatedly in the local government. In 2013-2014, OKG cost the community, with a population of 89,000, a net €270,000. Altogether, Karlstad has more than €64 million locked in OKG in the form of loans and credit guarantees. What E.On's decision will cost Karlstad in the next decade remains to be seen. At face value, it ought to be 2.13% of the total cost. Some of the total may be covered by funds already paid into Sweden's decommissioning and nuclear waste fund, but far from all.
Fortum Corporation January-September 2015, 22 Oct 2015 (financial report, pp 35 and 42).
Fortum Corporation: OKG AB's Extraordinary shareholders' meeting decides to close Oskarshamn nuclear units 1 and 2 co-owned by Fortum in Sweden (press release), 14 Oct 2015.
Nerijus Adomaitis: E.ON, Fortum confirm Swedish nuclear plant closures, Reuters (Oslo), 14 Oct 2015.
Swedish press reports in Svenska Dagbladet/Näringsliv (30 Sept, 14 Oct 2015); Barometern (24 Jun 2015); Värmlands Folkblad (3 Oct 2014, 14 Oct 2015).