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.
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...
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