Fortum Seeks State Aid for Major New Nuclear Project in Sweden

Nordic energy company Fortum has submitted a state aid application to Sweden to kickstart negotiations on the terms and conditions for a new nuclear power project in the country. Fortum's project company, NuCore Energi, has applied for state aid to build a new nuclear power plant in the municipality of Oskarshamn, a coastal city in southern Sweden.

The size of the project, which could generate between 1,200 MW to 3,400 MW of electricity, will depend on various factors such as technology selection, building multiple reactor units, projected growth in electricity demand in Sweden, and risk-sharing between the project and the state. Sweden aims to construct two new nuclear reactors by 2035, with a goal of 10 new reactors by 2045.

The government intends to support these projects through state loans, Contracts for Difference (CfD), and a risk-sharing mechanism valued at billions of U.S. dollars. Sweden has shifted its renewable energy policy from a 100% renewable electricity target by 2040 to a "100% fossil-free" electricity goal, which has led to the revival of nuclear power discussions.

Following a 1980 ban on nuclear power, Sweden's government reversed the decision in 2010, shutting down five of the twelve reactors then in operation. Currently, six of the twelve reactors remain in operation. The success of the new project in Oskarshamn will also hinge on securing customer offtake commitments for the new power and maintaining long-term political backing for nuclear power in Sweden, according to Fortum.

Sweden is also exploring Small Modular Reactors (SMRs) technology. Earlier this year, the Swedish company Videberg Kraft chose the UK's Rolls-Royce SMR to deliver three SMRs on Sweden's west coast, marking Sweden's first new nuclear power generation in over four decades.