A prerequisite for building new nuclear power at a reasonable cost is that the financing costs can be limited. At the same time, nuclear power projects are associated with a political risk that must be managed. New nuclear power therefore needs government. The financing must be designed in a way that ensures the industry’s competitiveness.
The inquiry’s proposal covers both the financial, market and political risks. Properly designed, the inquiry’s proposal should be able to lead to the expansion of new nuclear power at a competitive cost for both taxpayers and electricity customers, while being feasible with regard to EU regulations.
Governmental loan financing is a prerequisite for keeping the cost of new nuclear power at a competetive level. The inquiry’s proposal for a scheme for government loan financing should be cost-neutral for taxpayers, provided that the loans can be repaid. A thourough screening process is therefore required to ensure that the project owners have a good possibility to succeed with the project. A limited amount of funding corresponding to new nuclear power of 4000–5000 MW is likely to reduce the cost and risk for both taxpayers and electricity users. Further expansion of nuclear power should then be possible with more limited support from the state.
A double-sided CfD can be a good way to manage market risk and the support and is feasible with regard to EU regulations. The level and design of a CfD needs to be analyzed in detail before it is possible to comment on these in detail. The electricity users’ cost of financing a two-sided CfD must be at a level that gives the industry a competitive total cost.
The proposal for risk and profit sharing needs further analysis before it can be commented on.
Government support for nuclear power should replace the need for a market-wide capacity mechanism. However, an extended strategic reserve will be needed to cope with generation adequacy until new nuclear power is in place. New nuclear power with state funding should not receive income from future ancillary service markets as the electricity users contribute the funding to nuclear power precisely to give the power system these capabilities.
The political risk for new investments in nuclear power would be significantly reduced if a stable parliamentary majority can stand behind the main parts of the design of the support and that the implementation can be secured over several mandate periods.
In parallel with the design of support for new nuclear power, the work to remove obstacles to the expansion of both electricity grids and land-based wind power must continue. Even in a scenario where the government’s goal of the equivalent of 10 new reactors is in place by 2045, wind power will need to be greatly expanded. In order to meet the industry’s needs in the near term, wind power needs to be expanded from today’s 34 TWh/year to approx. 70 TWh/year in 2030 and approx. 90 TWh/year in 2035. A special support for offshore wind should be considered if onshore wind power cannot be expanded to a sufficient extent. The government’s planning goal for the Swedish electricity system of a total of 300 TWh by 2045 is welcome. In addition, the 2045 target needs to be supplemented with sub-targets for 2030, 2035 and 2040. If the industry does not have access to fossil-free electricity at a competitive cost, even in the short term, there is a risk that investments in the transformation of the industry will not occur.
