17 October 2022

Sweden's new Government invests heavily in nuclear power, but opponents say the proposals are not enough to tackle climate change in society

The incoming Swedish Government says it wants to establish new nuclear power, changing Sweden’s energy policy goal from 100% 'renewable' to 100% 'fossil-free'. In doing so, it says wind power will be an important part of the energy mix, but not the basis. The incoming Government (M, KD and L with the support of SD) wants to strengthen the conditions for investments in nuclear power through a special government credit guarantee of SEK 400 billion, with more generous terms than the current system. And it wants new rules to prevent arbitrary political shutdowns of nuclear power plants, and the right to operate and generate nuclear power must be guaranteed as long as the facilities are intact and operating safely. 

According to energy researchers, the construction of new nuclear power could take a long time, possibly 10 to 15 years if all goes well. Thus, the new Government also wants to investigate the conditions required to restart Ringhals 1 and 2. It is also hoping to shorten the licensing process and introduce a fast track for new nuclear power so that it can be started up quickly with the expansion. In addition, regulations must be reviewed to allow for conditions to build SMRs (small modular reactors). Vattenfall will lead major investments in nuclear power, change energy policy goals, suspend the hydropower environment, and review offshore wind power. Shortly after announcements, the shares in Studsvik, a nuclear power company offering consulting services such as monitoring and material testing, rose by more than 11%. And renewables players, Orrön fell 10% and OX2 fell 2%. 

Markku Rummukainen, Professor of Climatology at Lund University and former member of the Climate Policy Council, thinks the proposals are good, but he does not see how they cover the entire climate transition of society. He says that the increased investment in nuclear power is risky for the ambitions of Sweden's climate work.Tomas Kåberger, also former member of the Climate Policy Council and current Board member of Vattenfall, says that the most important motivation for the transition to renewable energy is the interest of future generations. The idea of building more expensive nuclear power instead of solar and wind is economically hopeless. Because the current owners of nuclear reactors have to use insurance and disaster bonds to ensure that they can pay for major accidents, nuclear power will become more expensive and shut down more quickly. So if Swedish industry is to be able to be independent of fossil fuels, solar and wind energy needs to be built.

Energi, Energiföretagen Sweden, DN, Di, Göteborgs-Posten, ETC, OMNI, Sveriges Radio

Incoming Swedish Government’s ‘Tidö Agreement’ receives climate criticism

The 4 parties supporting the new government formation have documented their commitments in what they call the Tidö Agreement. The agreement has already come under severe climate criticism. According to the Nature Conservancy, it is irresponsible, wasteful and risks exacerbating the problem. The Nature Conservancy has also criticised the lowering of emission reduction obligations as partly delaying the energy transition, partly supporting Russian war funding and opposing investment in nuclear power, calling it a "reversal of crisis policy and a waste of tax money." WWF has also been critical of the reduction of CO2 taxes on Combined Heat and Power and the blocking of the expansion of offshore wind power. Greenpeace has also said that Sweden will "never be able to meet its international commitments or Swedish climate targets," because the 4 parties have agreed to reduce their obligation to reduce emissions by blending biofuels into petrol and diesel. The Swedish Environmental Protection Agency has expressed the same criticism, arguing that Sweden may not be able to meet its climate targets. According to them, in the first years of implementing the proposal, approximately 5 million tonnes of CO2 emissions would be added each year, and their total emissions would increase by 10%. Blending biofuels in petrol and diesel is today considered the most important control tool if Sweden is to meet its climate targets by 2030. Today, major companies such as ST1, Preem and Södra skogsägarna are undertaking and planning to invest billions of dollars to significantly increase Swedish biofuel production to meet the growing demand, and these companies are already flagging their concerns about uncertainty in policies.

Even so, the incoming Government insists that this is a necessary measure - and that climate targets still exist. They say Sweden must dare to build nuclear power in order to meet the climate goals through electrification. Lowering the currently huge price of diesel is a way to ensure people's daily lives. In the long run, people will drive their cars using electricity, hydrogen or other means instead of petrol and diesel. The climate goal therefore remains.

Expressen, SVT, SVT

The SEK multi-billion electrification boom in Sweden

This spring, the Swedish Energy Agency received a budget of SEK 1.5 billion from the Government to allocate to companies that can build charging infrastructure and hydrogen refuelling stations for heavy transport, the so-called regional electrification pilots. Åke Axenbom, a senior advisor at the Energy Agency, says the interest of Swedish companies in building charging infrastructure has been surprising. 153 stations will now be built at the same number of sites in Sweden, distributed among energy and oil companies, logistics companies and car dealers, recycling stations, real estate companies, municipalities and port companies. The south of Sweden will be more densely populated than the north. At the same time, he said that according to the instructions, the charging stations must be ready by the end of September 2023, otherwise the funding is at risk of being withdrawn.

Di

Nel ASA: Receives a NOK 600 million purchase order from Woodside Energy

Nel Hydrogen Electrolyser AS, a subsidiary of Nel ASA, has entered into a contract for alkaline electrolyser equipment from Australian company Woodside Energy for its proposed hydrogen project, H2OK, in Ardmore in the state of Oklahoma, US. The contract has a total value of about NOK 600 million. H2OK is Woodside's first hydrogen project in the US and the equipment will support the first phase of the proposed 60 tonnes per day project. Woodside says that the Ardmore location is an area well suited for hydrogen production with an abundant supply of water and energy. The company will use these resources to produce liquid hydrogen for commercial and heavy-duty transportation vehicles powered by hydrogen fuel cells. The contract with Woodside was signed only after Nel received a 200 MW purchase order for another of its large projects in the US. The electrolyzer stacks will be produced at Nel's facility in Herøya, the world's only fully automated electrolyzer facility. Woodside aims to continue FID in 2023. Production of electrodes is estimated throughout 2024.

Press Release 

Eolus Sells Solar and Battery Storage Projects in Arizona

Eolus has signed an agreement to sell solar energy and battery storage projects in the state of Arizona, USA. The project is the third sale for Eolus in the United States. The buyer is a US-based portfolio company affiliated with a large publicly traded global venture capital firm. The project is under development and is expected to have a total initial output capacity of 750 MWac, including solar cells and battery storage. Commissioning is planned for 2025. The buyer has acquired all shares of the project company from Eolus and has signed an agreement that means Eolus will provide certain development services for the project until it becomes commercially operational. Eolus has received an initial payment of USD 12 million, with additional purchase price payments to be made in stages based on the continued development of the project and the completion of specific milestones. The total purchase price is currently estimated to range from USD 104 million to USD 190 million and will be paid over the period 2023-2025. The continued development and scale of the project by the buyer will influence the level of future payments to Eolus within the above range.

Press Release 

Vårgrøn takes over more than 20% of the world's largest offshore wind farm

Vårgrøn, a joint venture between Italian energy company Plenitude and Norwegian energy entrepreneur and investor HitecVision, acquires Plenitude's shares in Dogger Bank A, B and C. The acquisition makes Vårgrøn Europe's leading offshore wind company and the largest of its kind in Norway. The acquisition makes Vårgrøn the leading offshore wind company in Europe and the largest of its kind in Norway. The deal also includes other early projects in Vårgrøn's core markets, as well as the ambition to install or commission at least 5 GW of offshore wind power by 2030. When completed in 2026, Dogger Bank will be the largest offshore wind farm in the world. The project's three phases (A, B and C) will have a total capacity of 3.6 GW. The project is Vårgrøn's first in the UK and will add 720 MW of power generation. As part of the deal, HitecVision has increased its ownership from 30.4% to 35%, while Plenitude owns the other 65%.

NTB, E24

Enova supports offshore wind concept with NOK 22 million

Norwegian company Wind Catching Systems AS is setting up a pilot for a technology for floating offshore wind power. Enova is backing the project with NOK 22 million. The new offshore wind concept will be tested in northwestern Norway. Wind Catching Systems AS has applied for a temporary licence variation for the Mehuken wind farm in the municipality of Kinn. The turbine will be installed in 2023 to be tested and certified according to international regulations.

Press Release

Vestas goes big on wind power projects in Poland

Vestas has received a 73 MW order from PAK-Polska Czysta Energia sp. z o.o, for the Czluchow wind project in Northern Poland. This order marks Vestas’ first collaboration with PAK-Polska Czysta Energia sp. z o.o, a subsidiary of ZEPAK S.A. The order includes the supply, installation, and commissioning of 33 V110-2.2 MW turbines installed at a hub height of 120m. Deliveries and installation at the Czluchow wind project are expected to begin in 3Q23, while commissioning is planned for the first quarter of 2024.

Vestas has also revealed plans to build a new assembly plant in Szczecin, Poland, near the Baltic Sea. The plant will assemble nacelles and hubs for Vestas' flagship offshore wind turbine V236-15.0MW. The plant, which will support domestic and global demand, is expected to start operations in the second half of 2024.

Moreover, Vestas has also recently been awarded preferred supplier status for PKN Orlen and Northland Power's 1.2 GW Baltic Power offshore wind project in Poland. Vestas will deliver, install and commission 76 V236-15.0 MW wind turbines and support the basic design. The contract includes a 15-year service and maintenance agreement.

Press Release, Renew.biz

Green power for 1.8 million Danes delayed under the red Government

While concerns about energy supply are growing, the installation of solar cells and onshore wind turbines is slowing down severely. New data from the Danish Energy Agency shows that solar cells and wind turbines are being built much more slowly than expected. Manufacturers say new high tariffs and long waiting times for grid connections are hampering the process. All told, authorities expect 2,900 GWh less per year from land-based renewables by 2024 if compared to previous estimates. This is equivalent to the annual electricity consumption of more than 1.8 million Danes. Energy rapporteur Søren Egge Rasmussen has repeatedly voiced his concern that expansion will come to a halt through higher grid connection costs. According to Peter Bjerregaard, Head of Market Regulation, the new tariffs mean Denmark will be one of the most expensive places in Europe to build renewable energy. Meanwhile, experts believe the situation will be worse next winter. This is linked to the fact that Europe could run out of gas reserves in the coming months.

Finans

Danish Industriens Pension joins UN-backed CO2 reduction initiative

Industriens Pension has joined the Net Zero Asset Owners Alliance investor network and has now committed to a five-year medium-term target for reducing emissions from its investments. By joining the global investor network Net-Zero Asset Owners Alliance, Denmark’s Industriens Pension is now taking another step in its efforts to create a more climate-friendly investment portfolio. As a member of the alliance, Industriens Pension must now set five-year interim targets for the CO2 reduction of its investments and must submit regular progress reports. At the same time, the entire portfolio must be carbon neutral by 2050, and preferably sooner. The alliance is supported by the United Nations Environment Programme - Finance Initiative (UNEP FI) and the Principles for Responsible Investment (PRI). 

Press Release

What we're reading

• EU seeks temporary power to set maximum gas price (Financial Times, Reuters)
• Liebreich: 'Hydrogen is starting to look like an economic bubble — and here’s why' (Hydrogen Insight)

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