Vattenfall Puts Pressure on Swedish Government to Cut Nuclear Tax
State-owned Swedish utility Vattenfall will struggle to invest in required safety upgrades of its nuclear reactors in Sweden if the government doesn't abolish its tax on nuclear power, Chief Executive Magnus Hall said on Thursday.
His comments put further pressure on the minority coalition government and come a day after Vattenfall said all its reactors were operating at a loss due to a combination of low power prices and a high nuclear tax.
Japan's Fukushima disaster five years ago prompted regulators around the world to revise security measures.
In Sweden, where Vattenfall operates seven reactors, the regulator asked nuclear power plant operators to implement additional safety measures, such as independent core cooling system, to continue operations after 2020.
Vattenfall and Germany's E.ON EONGn.DE have since decided to shut four of Sweden's 10 nuclear reactors earlier than previously planned due to low profitability.
"From our perspective it's clear that if we don't get tax (on nuclear power) abolished, we cannot take a position on investing in the safety upgrades that we need to make to have our nuclear plants run past 2020," Hall said.
"We need to have a clear position from the government," he added, presenting Vattenfall's first-quarter results.
Hall has declined to speculate whether Vattenfall would need to stop its reactors after 2020 if the tax is not abolished and safety upgrades are not made.
The decision would depend on the regulatory regime, which currently makes safety upgrades mandatory, he added.
The company has previously warned that premature shutdown of nuclear reactors could lead to a power price spike, hitting Sweden's energy intensive industries such as pulp and paper.
Nuclear power provides about 40 percent of Sweden's electricity, helping to avoid price spikes in the hydropower-dependent region during dry years.
However, the coalition government includes the Green Party, which has campaigned on pledges to speed up a nuclear phase-out.
In Germany, Vattenfall had already to shut down its two nuclear power plants after the government decided to phase out nuclear energy by 2022, in reaction to the Fukushima disaster.
Germany's decision meant that nuclear plant operators got less time to accumulate money needed for decommissioning and storage of used nuclear fuel than previously planned.
The government-appointed commission in Germany said this week utilities would have to pay 23.3 billion euros ($26 billion) into a state fund to cover the costs of nuclear waste storage, with more than 17.2 billion euros already set aside.
While the proposed surcharge of 6.1 billion euros was smaller than previously feared, Vattenfall said it was still too much.
Hall said it meant an additional 400 million euro cost to Vattenfall on top of what the company has already set aside.
"We believe that the premium asked is too high... It's really not easily digestible by the companies," Hall added.
Sources had told Reuters that utilities had been willing to pay a maximum surcharge of about 4 billion euros.
Other operators of German nuclear power plants are German utilities E.ON, RWE and EnBW.
(Reporting by Nerijus Adomaitis)
