Sweden gets first application for state aid for new nuclear

The application has come from Videberg Kraft AB, a project company owned by Vattenfall AB and backed by a series of industrial firms via the Industrikraft i Sverige AB consortium.

Industrikraft was formed in June 2024 to support the expansion of the Swedish electricity supply. Last month it was announced that Industrikraft was to become a 20% shareholder in Videberg Kraft AB which was created for the new nuclear project. A separate project company is a prerequisite for applying for government support.

Industrikraft, which is aiming to be cleared to take up the 20% stake next month, includes ABB, Alfa Laval, Boliden, Hitachi Energy, Höganäs AB, SSAB, Saab, Stora Enso, and the Volvo Group.

It is the first application under the country's new legislation on state aid for investments in new nuclear power, which came into force in August.

According to the government briefing: "State aid will be provided in the form of government loans and two-way contracts for difference. The latter means that a contract is drawn up between a nuclear power plant operator and central government ensuring a minimum level of compensation protection by central government and setting an overcompensation cap for the company.

"Central government can provide loans for the construction and testing of new nuclear reactors, and for planning and other preparatory measures. Two-way contracts for difference may be entered into for routine operation of new nuclear reactors.

"The state aid is limited and is planned to include investments of up to a total installed capacity of approximately 5000 MW, which is equivalent to four large-scale reactors."

This application will now be processed by the Ministry of Finance with negotiations to take place between the government and the project proposers about the conditions and scope of support required.

There will also be "a continuous dialogue" with the European Commission ahead of the EC assessing whether any proposed funding is compatible with European Union state aid rules.

Vattenfall says that "there is currently an intensive evaluation process" taking place of the BWRX-300 and Rolls-Royce SMR options "and a decision on the final supplier is planned for 2026".

Minister for Financial Markets Niklas Wykman said: "The fact that we have received this first application confirms that Swedish industrial companies want to get involved in building nuclear power. This is a decisive step towards getting new reactors in place, and we are ready to receive more applications in the future."

Sweden's government says that, based on preliminary discussions with other parties, further applications for state aid for new nuclear projects are likely to follow.

In May this year, Sweden's parliament - the Riksdag - approved the government's proposals for providing state aid to companies that want to invest in new nuclear reactors in the country. The loans - aimed at lowering the cost of financing new nuclear - will be limited to the equivalent of four large-scale reactors (about 5000 MWe of capacity). The government noted that support may only be granted if the new reactors are located at the same location and have a total installed output of at least 300 MWe. Two-way Contracts for Difference may be entered into once a new reactor has become operational and has been licensed to produce electricity at full capacity. The new act on state aid entered into force on 1 August, since when interested companies have been able to apply for the aid.