The Swedish parliament, the Riksdag, has passed a pivotal government bill outlining a novel approach to financing and risk sharing for investments in new nuclear power.
The legislation aims to address the country’s challenges with fluctuating electricity prices and system imbalances by expanding its fossil-free base load capacity.
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The newly adopted Act provides a structured framework for financing the initial nuclear reactors, with state aid capped to support investments for a total installed capacity of 5GW – that of approximately four large-scale nuclear reactors.
Minister for Financial Markets Niklas Wykman stated: “This is a historic announcement that takes responsibility for public financing and taxpayers’ money when we enable actors to build new nuclear energy. An expansion of nuclear power is expected to result in greater price stability and lower system costs, which helps households as well as businesses.
“With new nuclear reactors, we are paving the way for higher growth, more jobs and better conditions to achieve the climate transition.”
Companies interested in receiving state aid for new nuclear investments are encouraged to submit applications to the government.
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By GlobalDataThe aid will be delivered through government loans and two-way contracts for difference (CfDs), each offering financial support at different project stages.
Government loans will assist in constructing and testing new reactors, including planning and other preparatory actions.
These loans will not cover the full investment cost, necessitating additional share capital injections. Once a reactor is operational, the loans must be repaid in instalments.
The two-way CfDs come into play when a reactor is fully licensed and operational.
This hedging mechanism could result in either costs or revenues for the central government, depending on electricity prices. Companies will receive compensation from the government if the average annual electricity price is below a set strike price.
If the price exceeds the strike price, companies must pay the difference to the government.
The state aid conditions also incorporate a risk and profit-sharing mechanism between the company and the central government.
The Act on state aid for new nuclear energy investments will be effective from 1 August 2025, and companies can apply for aid from that date.
