Sweden’s silent phaseout

20 September 2017

John C.H. Lindberg looks at the geopolitical ramifications of closing Sweden’s nuclear reactors.

Following an energy conference, a professional economist protested that France and Sweden “didn’t count” as examples of solving the energy trilemma of balancing sustainability, affordability and security. Why? Because “they only decarbonised because they didn’t want to burn fossil fuels, not because they cared about carbon emissions.”

This is entirely in line with a worrisome trend in which certain tales are removed as they do not fit the current discourse. It should be seen in the context of a shift within the public policy sphere, away from nuclear power and towards renewables as a vector for decarbonisation. This is the master narrative within an environment where nuclear power is fighting to remain relevant.

The question is whether we really care about decarbonisation. If so, Sweden should be heralded as a global leader. More than 80% of its electricity is from hydro and nuclear. Less than 3% now comes from fossil fuels. Sweden has spent half a century demonstrating that it is possible to increase living standards while achieving virtually complete decarbonisation of the electricity system and it has turned the relationship between economic growth and carbon emissions on its head. 

Since its first reactor became operational in 1972, Sweden’s greenhouse gas emissions have plummeted. In 1970, an average Swedish citizen emitted 11.49t of CO2. In 2013, the corresponding number was 4.62t of CO2 – a 60% reduction in less than half a century.

Sweden’s nuclear programme was, for the size of the country, remarkable. Following an extensive but ultimately abortive effort to acquire a nuclear deterrent, Sweden was in an excellent position to expand its nuclear power programme, from fuel fabrication to designing and constructing nuclear reactors. In Sweden’s atomic heyday – as recently as 2004 – eleven nuclear reactors generated 50% of the country’s electricity. Following a string of closures, however, the proportion has now fallen to around 40%.

In 2016, the Swedish government announced that it would phase out a decades-old penal tax on nuclear power. Earlier this year, changes were made to the funding structure of the nuclear waste management policy the industry is obliged to fund, which could reduce some of the financial burden on operators. This would seem to be an environment that would content most nuclear operators. At face value the future of nuclear power in Sweden should surely be regarded as being as safe as it gets.

However, slowly but steadily a phaseout is taking place. Four reactors have been closed prematurely since 1999 and another two are scheduled to close by the end of 2020. Economic reasons are cited as the drivers for the closures of Oskarshamn 1&2, although plant upgrades were close to completion, and Ringhals 1&2. The combination of low electricity prices (in part driven by extensive subsidies for renewables) and stringent post-Fukushima safety demands (especially for the older reactors) has played a significant role in ensuring these premature closures. It has also played a role in limiting lifespans of the entire fleet. Hardly a positive outcome for a government that is claiming a climate leadership.

The closure would see removal of almost 4000MW of low-carbon electricity in a period of less than five years. In order to fully appreciate the Swedish nuclear policy environment, it is pertinent to revisit the historical developments that have led us to the present- day situation.

Sweden’s nuclear history

As a part of Sweden’s ‘armed neutrality’ doctrine during the Cold War, it pursued its own nuclear deterrent incorporating the full range of nuclear capabilities. The civilian and military programmes diverged early and the effort to build nuclear weapons was abandoned in 1972.

Nuclear power expanded after the 1973 oil crisis, when energy independence was thrust to the top of the political agenda, and 12 reactors were constructed at four sites. Of these reactors, nine were indigenous designs by ASEA-Atom.

In the aftermath of the Three Mile Island accident in 1979, Swedish prime minister, Torbjörn Fälldin called a referendum on the future of nuclear power. However, all three options envisioned a phaseout, albeit at different speeds. Hardly a democratic exercise. The 1980 referendum saw a softer stance being adopted, with Parliament subsequently setting 2010 as the final phaseout date.

The 1990s saw the introduction of a capacity tax on nuclear power. It was initially set at 5514 SEK/MWt ($660/MWt), and was subsequently increased a number of times. In 2015 the Swedish Parliament authorised a further increase to 14,770SEK/MWt ($1780/ MWt), which resulted in the nuclear industry contributing more than 4.5 billion SEK to the treasury.

Whilst 2010 saw the official abolition of the phaseout policy by a very narrow parliamentary majority (174 to 172) and a mandate for new reactors to be built, the overall momentum still remains with phasing out the remaining Swedish fleet. If Ringhals 1&2 are shut down by the end of 2020, the fleet will lose more than 30% of its initial capacity. This move, however, fundamentally undermines some of the pillars of the country’s energy policy.

Climate leadership

The cross-party deal that was struck between the Swedish government and opposition parties in 2016 made it clear that Sweden should become a zero net emissions country by 2045, with negative emissions in each year following that. Sweden definitely has the track record to prove that its ambitions could be realistic.

Across the world, Sweden is hailed as a role-model and moral authority in regards to the battle against anthropogenic climate change. After 1970, as nuclear power became increasingly integral to the system, CO2 emissions decreased significantly, whilst GDP continued to grow at significant rates (Figure 1). Additionally Sweden’s energy independence improved during this period, as fossil fuels for electricity production were replaced by nuclear power (Figure 2).

The main remaining contributor to energy imports is fossil fuels for transport. It has been calculated that if the entire personal vehicle fleet were to be converted to electric cars, an additional 11TWh of electricity would be needed annually – the equivalent output of 1.5 of Sweden’s nuclear reactors. The transport sector is also one of the few energy sectors where Sweden is highly dependent on the surrounding world. If electricity were to replace petrol as the pillar upon which the transport sector is based, near-complete energy independence could be achieved, whilst ensuring a transformation to a low-carbon economy.

However, by failing to halt its nuclear phaseout Sweden is setting a poor example for countries worldwide that are concerned with issues around the environment, energy independence and decarbonisation.

Nuclear power has been the best way in which decarbonisation of Sweden’s electricity system can be achieved. The role of hydroelectric power cannot be understated; however environmental politics likely constrains any future build of hydro in Sweden. The increase in solar and wind has had negligible impacts on deep decarbonisation, yet the Swedish government is proposing to replace its nuclear fleet, by 2040, with 100% renewables. This is achievable if the last remaining untouched (and protected) rivers of northern Sweden were dammed, but otherwise 100% renewables is little more than a politically motivated policy. This would be a highly regressive act, as it would see a world-class example of deep decarbonisation being squandered, undermining Sweden’s leadership role in climate change mitigation. 

Exports and regional politics

Sweden’s nuclear phaseout also threatens to undermine much of the progress in regards to decarbonising and politically stabilising the energy markets of the Baltic region. While a phaseout is unlikely to result in power shortages in Stockholm, the effects on its neighbours will be many.

First, Sweden indirectly acts as a low-carbon battery for Scandinavia and parts of the Baltic region. Sweden can export power because it produces more electricity than domestic demand. This allows countries like Denmark and Lithuania to attempt to rely on highly volatile renewables, knowing that low-carbon electricity is often available for import from Sweden. At present, Sweden is one of the most profitable electricity exporters in the world. Last year, Sweden exported over 22TWh of low-carbon electricity, at a profit of over $800 million.

Secondly, the phaseout would have significant geopolitical ramifications. The cross-party deal of 2016 states that ‘...Sweden is closely linked to its neighbours in northern Europe, and aims to find joint solutions to challenges in the common electricity market’. This should be regarded as an acknowledgement of the geopolitical situation in Baltic region, where the last decade has seen a deterioration in relations between Russia and its neighbours. As a consequence, the Baltic States have tried to realign their energy policies away from Russia. Lithuania represents a prime case.

As a condition for entry into the European Union, Lithuania was forced to close the two RBMKs at Ignalina, wreaking havoc in the Lithuanian electricity supply system, where it supplied up to 85% of demand.

With the closure of Ignalina 2 in 2010, the country became largely dependent on Russian gas and imports of electricity from Russia and Belarus. Interconnectors were with Poland, Sweden and Finland/ Estonia, alongside a planned replacement for Ignalina. However, the Visaginas plant seems unlikely to materialise and Lithuania is likely to remain highly dependent on electricity imports, while imports from Belarus have become problematic.

One of the chief goals of interconnectors between Baltic states is energy security. But this has arguably come at the cost of energy independence. All the three Baltic States depend heavily on electricity imports. Last year, Sweden exported 2435GWh of electricity to Lithuania. However, the closures of Swedish nuclear reactors will undermine regional stability, and force countries like Lithuania to reassess their highly fragile energy systems. 

John C.H. Lindberg, Department of Geography, King’s College London, London, United Kingdom and UK Director, Environmental Progress, Berkeley, California, USA.

Sweden Figure 2: Sweden’s energy imports from 1960-2016 (Source: BP Statistical Review of World Energy)
Sweden Oskharshamn 3 produced a record 13.6TWh of electricity in 2016 (Source: OKG)
Sweden What will the closure of Ringhals 1&2 by 2020, mean for low-carbon energy in Sweden? (Source: Vattenfall)
Sweden Figure 1: Sweden’s carbon intensity and economic growth (Source: BP Statistical Review of World Energy)
Sweden OKG closed Oskarshamn 1&2 early due to economic reasons (Source: OKG)
Sweden Hydropower has long been a source of low-carbon energy in Sweden. Porjus, built 1910-15, is one of the country’s oldest projects and one of its largest with a capacity of 430MW (Source: Vattenfall)

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