Posted By Global Banking and Finance Review
Posted on January 23, 2025
STOCKHOLM (Reuters) - The cheapest way for Sweden to meet its expected rise in demand for electricity and goal of net zero emissions by 2045 is to build more onshore wind parks rather than increase the number of nuclear power plants, a leading think tank said on Thursday.
Sweden's government has said it wants to build up to 10 new nuclear power plants by 2045 as transport and industry shift away from fossil fuels and demand for electricity is forecast to reach around 300 Terawatt hours (TWh) from 135 TWh in 2023.
The SNS think tank said that new nuclear power would be the most expensive solution, while more onshore wind and solar power combined with boosted production from hydropower plants and existing nuclear reactors would be able to meet increased demand without increasing Sweden's low electricity prices.
"The high costs linked to nuclear power mean that these kinds of plants should primarily be built in countries with significantly higher electricity prices," SNS said in a report on Sweden's energy transition.
SNS said new nuclear power could be commercially viable in the future, but only when Europe has agreed on common standards that would lead to much lower building costs for new reactors.
Sweden's electricity is currently 98% fossil-free and costs around half the price of the rest of Europe, according to Eurostat.
Hydropower accounted for around 40% of electricity production in 2023, with nuclear at 29%, wind at 21% and solar around 2%, according to the Swedish Energy Agency.
The government is working on a plan that would give cheap loans to nuclear developers, a scheme that could cost around 400 billion crowns, according to a government commission, although the money would be paid back eventually.
The government says new reactors are needed to provide "base" power when it is not windy. SNS, however, said that energy flexibility measures like running some industrial processes in off-peak hours could solve this without the need for nuclear power.
SNS said the government should focus on improving the electricity grid and regulatory framework to support private investment in new energy production.
(Reporting by Simon Johnson; Editing by Frances Kerry)
