Vattenfall and E.On in dispute over Swedish NPP

7 September 2015


Sweden's Vattenfall and Germany's E.On, the co-owners of Sweden's Ringhals nuclear plant, are in dispute over the early closure of units 1 and 2.

Vattenfall, which owns 70.4% of Ringhals plant, intends to limit investment in those units from 2017, which means they can only operate until 2020. In April, Vattenfall announced that, due to declining profitability and increased costs, it had informed E.On that it planned to close Ringhals 1&2 in 2018-2020.

However, this requires the consent of E.On, which holds the remaining 29.6%, and which believes it is too early to decide on formal shutdown dates. "We agree that the pressure from taxes and the market is extremely tough, but we think it's too early today to decide the exact date of the shutdown," Jakob Holmstrom, a spokesman for E.On in Sweden, said.

Citing low Nordic power prices and high nuclear taxes, Vattenfall said Ringhals 1&2, with a total capacity of 1750MWe, are no longer profitable and should be shut to avoid costly upgrades. Torbjörn Wahlborg, head of generation at Vattenfall and chairman of the board of Ringhals, said: "The investment decision, which had to wait while talks with E.On were under way, will not be subject to review." He added, "Clearly, I wish we hadn't had to take the decision to limit investments." He noted that Ringhals 1&2 have recently been upgraded and modernised to comply with new safety requirements, but added: "The situation on the market gives us no scope for continuing to make investments which will be required in the future". However, he stressed that investment plans for Ringhals 3&4 will not be affected.

Holmstrom said E.On wanted to wait for possible "political developments", which could lead to lower nuclear taxes. Vattenfall says the taxes account for about a third of total costs at the reactors and make them unprofitable. Sweden will hold next parliamentary elections in 2018 and the centre-right opposition is more in favour of nuclear power. The government is also under pressure from the Swedish industry, including its metal or paper producers, who fear an early nuclear shutdown could increase power prices and lead to shortages during winter when demand is highest.

Sweden has 10 nuclear reactors which generate about 40% of its power. The two Ringhals reactors produced 7% of total electricity in 2014. Ringhals 1, an 878MWe boiling water reactor that started operating in 1976, had been due to be closed in 2026. Unit 2, an 807 MWe pressurized water reactor, began operation in 1975 and was scheduled to shut down in 2025. Ringhals 3&4 are larger PWRs that started up in the early 1980s.

 



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