OSLO: Vattenfall’s plans to shut Sweden’s two oldest nuclear reactors later this decade pushed up forward Nordic power on Tuesday, prompting concern from the country’s energy-intensive industry over future high power prices.
Nordic power prices for long-term delivery rose more than 4 percent on news that Ringhals-1 and Righals-2 nuclear reactors with a combined capacity of 1,746 megawatts could be shut by 2018-2020.
The two reactors generated 9.8 terawatt-hours (TWh) of electricity in 2014, compared to 11.6 TWh produced by all wind power turbines in Sweden.
Vattenfall said it is being forced to shut the two reactors due to falling wholesale power prices and rising costs.
Nuclear power operators in Sweden have to pay a tax on each megawatt-hour produced, and the government has decided to raise it from around 6 euros to 7 euros from August.
“If there was no nuclear tax, we wouldn’t have to shut the reactors,” Vattenfall Chief Executive Magnus Hall told.
Sweden’s energy-intensive industry, such as pulp and paper makers, metal producers and miners, say government policies are creating uncertainty, which could discourage new investment.
“If we have two or even three reactors taken out of service before 2020 … we will have a very difficult supply situation in southern Sweden, particularly during winter,” said Maria Suner Fleming, head of energy and climate policy at the Confederation of Swedish Enterprise, the main business lobby.
“Who will choose to invest in energy-intensive industry in Sweden given such a situation?” she added.
Mats Gustavsson, chief executive of BasEl, an association of steel, forestry, mining and chemical firms in Sweden, said the shutdown could lead to a jump in wholesale power prices.
“Sweden’s industry is built on the fact that electricity is available and at low cost,” he added.
Analysts said power prices for 2018-2020 rose as plans to shut the two reactors meant there will be less supply than previously expected.
“The shutdown will wipe out about two-thirds of what was yesterday expected to be a 15 TWh power surplus in the Nordics in 2018,” said Kristoffer Uppheim, an analyst at Thomson Reuters Point Carbon.
Vattenfall said the decision to shut two reactors at Ringhals plant will have to be approved by Germany’s E.ON , which holds a 29.6 percent stake.
