Vattenfall to Save $356 Mln a Year after Sweden Tax Phase Out
Swedish state-owned power utility Vattenfall will save about 3 billion Swedish crowns ($356 million) a year after the country's nuclear tax has been phased out and will use the savings to extend the life of its reactors, its CEO told Reuters.
On July 1, in a long expected move, Sweden started a two-year phasing out of its tax on nuclear power production, which many nuclear energy producers, including Vattenfall , said had created losses and halted investments.
"The tax reduction will be 3 billion crowns per year ... This tax relief is (for us) more pointed towards investments on the prolongation of Swedish nuclear," Vattenfall's chief executive Magnus Hall said in an interview on Friday.
Vattenfall operates seven out of the eight remaining nuclear reactors in Sweden, three at Forsmark and four at Ringhals. Two of the latter are scheduled to be decommissioned by 2020.
"We will keep to the schedule of closing them in 2020 and 2019," Hall said, adding Vattenfall was not planning to invest in new nuclear reactors in Sweden as it was pursuing other more cost-effective technologies.
He said the company planned to invest up to 2 billion crowns in solar energy over the next two years, while around 5 billion euros would be spent mainly on wind power over the next five years, much of it offshore wind.
Sweden has also voted for legislation forcing nuclear producers to expand the facilities of their reactors, adding external installations that can independently inject water to cool the reactors by 2020.
"We have taken a decision already for lifetime extensions for Forsmark 1-2-3 ... the lifetime extension for Ringhals 3 and 4 will be on the table for some decision during the fall," the CEO said.
The phase-out of the nuclear tax in Sweden was a prerequisite for the investment in the reactors' lifetime extensions, he added.
In Germany, Vattenfall was forced to halt its nuclear power production and the company is now in a legal dispute over compensation it is claiming from the German state.
Hall said the company expected a non-appealable decision from an arbitration court in Washington, D.C. by autumn 2017.
Vattenfall, which has suffered for years from low power prices and large impairments related to unsuccessful overseas ventures, made a record loss in 2016. Hall said he expected a "positive results" this year and to pay dividends in 2018.
The last time the government's former cash-cow paid a dividend was for 2012.
Unlike its German hydropower operations, where Vattenfall recently announced it would cut up to 60 percent of staff to bring down costs, the company's equivalent Swedish operations will not be downsized because they already have a leaner structure, Hall said.
(By Lefteris Karagiannopoulos)