Fortum's project company, NuCore Energi, has applied for state aid from the Swedish government to develop a new nuclear power plant in Oskarshamn. The project, with a potential capacity of 1,200 MW to 3,400 MW, is part of Sweden's broader strategy to increase nuclear power generation.
Fortum's application for state aid signals a significant step towards expanding nuclear power in Sweden, a move crucial for the country's energy security and its transition to fossil-free electricity generation. The project's success could influence regional energy markets and the broader European nuclear renaissance.
Nordic energy company Fortum announced on Thursday that it has submitted a state aid application to the Swedish government. This move initiates discussions regarding the terms and conditions for advancing a new nuclear power project in Sweden, a country increasingly focused on nuclear energy.
NuCore Energi, Fortum's subsidiary established for developing new nuclear power in Sweden, is seeking state aid to construct a new nuclear power plant in the municipality of Oskarshamn. The project's final scope, which could range from 1,200 MW to 3,400 MW of electricity, will be contingent upon several factors. These include the selection of technology, the benefits of constructing multiple reactor units, anticipated growth in Sweden's electricity demand, and the risk-sharing arrangement between the project and the state to ensure viability and financeability for the owners.
Sweden's national energy strategy includes plans to build two new nuclear reactors by 2035 and aims for a total of 10 new reactors by 2045, as a hedge against low-carbon energy security. The government intends to support these new nuclear power initiatives through state loans, contracts for difference (CfD), and a substantial risk-sharing mechanism.
In recent years, Sweden has adjusted its renewable energy policy, shifting from a goal of 100% renewable electricity by 2040 to "100% fossil-free" electricity, thereby facilitating the construction of additional nuclear power plants. Historically, Sweden decided to phase out nuclear power in 1980, but this decision was reversed by Parliament in 2010. Currently, six of the twelve reactors that were once operational remain in service.
Fortum indicated that the progress of the Oskarshamn project also hinges on securing customer offtake commitments for the new power generated and maintaining sustained long-term political support for nuclear power in Sweden. A critical condition is also NuCore Energi's ability to secure access to and control of the Ävrö site in Oskarshamn, which is currently owned by Oskarshamn Kraftgrupp AB, an entity in which Fortum holds a significant ownership stake.
Separately, Sweden is also pursuing Small Modular Reactors (SMRs) technology. Earlier this year, Videberg Kraft selected Rolls-Royce SMR to supply three SMRs for the west coast of Sweden, marking the country's first new nuclear power development in over four decades.