Sweden Moves to End Nuclear Moratorium

What do you think of when you think Sweden? IKEA? Volvos? Blonds? Glögg? Smörgåsbords? Socialism? Minimalist design? Efficiency? Environmentalism?

Nuclear energy?

Oh, yes Sweden gets 42 percent of its electricity (2008 total) (sub req’d) from nuclear power, more than double, as a percentage, the United States. In fact, 34.7 percent of Sweden’s total primary energy supply (2007 total) comes from nuclear, more than other source.

But Sweden also has a Chernobyl-era ban in place on new construction and has come to this point of time with no viable alternative to replace that 42 percent. So, it should be no surprise that last week the government of Prime Minister Fredrik Reinfeldt introduced legislation to allow the construction of new nuclear power plants

“…The government’s move to introduce a bill to Parliament this week highlights renewed interest in nuclear power as countries try to reduce their dependence on energy imports and lower their CO₂ emissions … coming just six months before Prime Minister Fredrik Reinfeldt faces a general election, it also underscores how confident many governments are in a renaissance of nuclear power. The latest opinion poll shows 52 percent of Swedes now support new nuclear power.”

The bill is scheduled for a vote in June, but the prime minister has made clear in a report where he stands. A “sustainable energy and climate policy for the environment, competitiveness and long-term stability,” released in February 2009, plots a course forward for nuclear energy in Sweden. His attitude is a clear as can be:

“…Swedish electricity production today is essentially based on only two sources – hydropower and nuclear power. Climate change is now in focus and nuclear power will thus remain an important source of Swedish electricity production for the foreseeable future…”

The paper also has some pretty simple prescriptions on how Sweden can get there:

“…The Nuclear Phase-Out Act will be annulled. The prohibition against new construction in the Nuclear Activities Act will be lifted. An inquiry will be appointed to design nuclear power legislation that enables a controlled generational shift in Swedish nuclear power…”

The goal for Sweden will be to keep their 10 reactors up and running and phase out old reactors as they reach the end of their operating life:

“…The transitional period during which nuclear power will be in use will be extended by allowing new construction at existing sites within the framework of a maximum of ten reactors. It will be possible to grant permits for successively replacing current reactors as they reach the end of their technological and economic life…”

That’s not a full-blown restart of the industry, but it’s a far cry from an outright ban on new build. There’s also a plea in the report for regulatory stability:

“…Swedish businesses and consumers must be able to rely on there being a secure supply of energy. This requires giving energy companies long-term rules and stable operating conditions. Constantly changing rules lead to insecurity and a lack of investment, which in turn lead to high electricity prices and a failure to make the necessary adaption in response to climate change...”

Regulatory stability leading to money saved for electricity ratepayers, that’s music to our ears.

And in a good nod to current economic downturn, Swedes seem to increasingly think nuclear energy is not just good for the environment, it’s also good for the economy:

“…A poll earlier this year quoted by media showed most Swedes favored nuclear energy as the best source to protect the environment and create jobs: 26 percent versus 21 percent for wind power and 18 percent for hydro…”

Oh, and don’t forget the rather attractive long-term levelized cost of nuclear energy:

“Some of that increased support [for nuclear energy] may be due to increased electricity prices. Last winter, spot prices for electricity in Sweden soared by up to 400 percent due to scheduled shutdowns of the old reactors and delayed start-ups, underlining what Sweden’s power prices could look like without nuclear.”

This will come to a vote in June and it will be close, so there are no guarantees. But it seems Swedes have more and more reasons each day to reconsider nuclear energy.

Something to think about next time you’re picking out some new furniture at IKEA.

Fluor Invests in NuScale

You know, it’s kind of sad that no one is willing to invest in nuclear energy anymore. Wait, what? NuScale Power celebrated the news of its company-saving $30 million investment from Fluor Corp. Thursday morning with a press conference in Washington, D.C. Fluor is a design, engineering and construction company involved with some 20 plants in the 70s and 80s, but it has not held interest in a nuclear energy company until now. Fluor, which has deep roots in the nuclear industry, is betting big on small-scale nuclear energy with its NuScale investment. "It's become a serious contender in the last decade or so," John Hopkins, [Fluor’s group president in charge of new ventures], said. And that brings us to NuScale, which had run into some dark days – maybe not as dark as, say, Solyndra, but dire enough : Earlier this year, the Securities Exchange Commission filed an action against NuScale's lead investor, The Michael Kenwood Group. The firm "misap...

Wednesday Update

From NEI’s Japan micro-site: NRC, Industry Concur on Many Post-Fukushima Actions Industry/Regulatory/Political Issues • There is a “great deal of alignment” between the U.S. Nuclear Regulatory Commission and the industry on initial steps to take at America’s nuclear energy facilities in response to the nuclear accident in Japan, Charles Pardee, the chief operating officer of Exelon Generation Co., said at an agency briefing today. The briefing gave stakeholders an opportunity to discuss staff recommendations for near-term actions the agency may take at U.S. facilities. PowerPoint slides from the meeting are on the NRC website. • The International Atomic Energy Agency board has approved a plan that calls for inspectors to evaluate reactor safety at nuclear energy facilities every three years. Governments may opt out of having their country’s facilities inspected. Also approved were plans to maintain a rapid response team of experts ready to assist facility operators recoverin...

Nuclear Utility Moves Up in Credit Ratings, Bank is "Comfortable with Nuclear Strategy"

Some positive signs that nuclear utilities can continue to receive positive ratings even while they finance new nuclear plants for the first time in decades: Wells Fargo upgrades SCANA to Outperform from Market Perform Wells analyst says, "YTD, SCG shares have underperformed the Regulated Electrics (total return +2% vs. +9%). Shares trade at 11.3X our 10E EPS, a modest discount to the peer group median of 11.8X. We view the valuation as attractive given a comparatively constructive regulatory environment and potential for above-average long-term EPS growth prospects ... Comfortable with Nuclear Strategy. SCG plans to participate in the development of two regulated nuclear units at a cost of $6.3B, raising legitimate concerns regarding financing and construction. We have carefully considered the risks and are comfortable with SCG’s strategy based on a highly constructive political & regulatory environment, manageable financing needs stretched out over 10 years, strong partners...

NEI Nuclear Notes

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