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 The company has also withdrawn its application for a permit for new nuclear build, submitted in 2012.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.
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)