I have been very critical of nuclear power in this blog. Recently I posted a list of reasons that nuclear power is a poor choice to fight climate change. Despite the many reasons against the use of nuclear power, the nuclear industry is still selling reactors into the third world. China claims to be building forty new reactors in the next five years. One of the main reasons that nuclear power is seriously considered for future energy needs is because there is so much money involved. It costs billions of dollars to build a nuclear reactor and there is plenty of gravy for everyone involved. Recently, the representative of a Russian nuclear technology company was arrested in the U.S. and charged with using bribery to expand his business. Sadly, in the end, it will probably not be any of the environmental, public health or corruption problems that bring down nuclear power but just the economics. If they cannot sell the power at a competitive price, they will fail in the marketplace in spite of all the bribes they can manage.
Vattenfall is a Swedish utility that owns and operates nuclear power reactors. Recently it announced that because of low electricity prices and the tax that Sweden imposes on power reactors, it's reactors are currently being operated at a loss. It costs Vattenfall about three and a half cents U.S. to generate a kilowatt hour of electricity. The price of electricity in Sweden is about two and three tenths cents U.S. The tax that Sweden charges is about eight tenths of a cent U.S. on each kilowatt hour. This means that even if Sweden stopped collecting any tax from Vattenfall, they would still be selling electricity for half a cent less than their generating cost.
Vattenfall has announced that it will decommission one of its reactors at the Ringhals plant in 2019 and another in 2020. These reactors were previously scheduled for decommissioning in 2025. Vattenfall is moving the date forward because of "declining profitability and rising operation costs." Vattenfall intends to keep operating two newer reactors at Ringhals and three other new reactors it owns up to 2040.
Vattenfall will have to make a number of expensive upgrades to the new five reactors to keep them operating properly and to comply with some Swedish safety regulations. They have been hoping that the price of electricity would rebound but that has not happened. They have to invest almost five hundred million dollars over the next few years in their nuclear operations and they are operating at a loss. Given the current and projected future situation with electricity prices, that does not seem like a reasonable investment.
Vattenfall says that in order for nuclear power to be able to continue operating in Sweden, the government must end the tax on its reactors. Vattenfall says that Sweden needs nuclear power and, unless something is done to return nuclear power to profitability, they will have to shut down their new reactors early. They say that this would be devastating to Sweden because of rising electricity prices and the risk of power shortages. Time will tell whether Swedish government officials are sufficiently impressed by Vattenfall's arguments to give them the tax relief they demand.
Ringhals Nuclear Power Plant:
