Swedish Nuclear Expansion Will Require Direct State Investment, Says Vattenfall

Vattenfall has said that Sweden’s plans to revive and expand its nuclear power sector will require direct state investment, citing the scale and financial risk of new nuclear developments. The utility’s chief executive, Anna Borg, said that the size of upcoming projects makes it unrealistic for companies alone to carry the investments on their balance sheets.

Sweden’s right-of-centre government has outlined ambitions to expand nuclear capacity as part of its long-term energy strategy, offering incentives such as low-interest loans and price guarantees to attract private capital. However, Vattenfall argues that these measures will need to be complemented by direct state ownership.

 

Small Modular Reactors Planned at Ringhals Site

 

Vattenfall’s subsidiary Videberg Kraft is planning to build several small modular reactors at the Ringhals nuclear site in south-west Sweden. The proposed reactors would have a combined capacity of approximately 1,500 megawatts. The company applied for government funding for the project in December.

According to Borg, a consortium of industrial companies is expected to take a 20 percent stake in the project company. She added that the intention is for the Swedish state to also hold a direct ownership stake, reflecting the long development timelines and capital intensity of nuclear power.

 

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Financial Scale Limits Balance Sheet Exposure

 

Borg said that the scale of the nuclear investment means it cannot be consolidated on Vattenfall’s balance sheet. While negotiations with the government and reactor suppliers are ongoing, she declined to provide cost estimates for the project.

Her comments highlight the financial challenges facing new nuclear builds in Europe, where long construction periods, regulatory complexity, and high upfront costs have made private-sector-led projects increasingly rare.

 

Strong Q4 Performance Supports Near-Term Investments

 

Vattenfall reported a sharp increase in fourth-quarter underlying earnings before interest and tax, which rose to 9.5 billion Swedish crowns, or roughly $1.1 billion, compared with 922 million crowns a year earlier. The improvement was driven by better price hedging for its continental European power generation and stronger availability and pricing for its Swedish nuclear output.

Despite the earnings rebound, the company said most of its planned capital expenditure remains focused elsewhere.

 

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Five-Year Investment Plan Prioritises Wind and Grids

 

Of Vattenfall’s 165 billion Swedish crown investment budget over the next five years, the majority will be allocated to wind power development and electricity grid infrastructure. Borg noted that the main investment volumes for new nuclear capacity are expected to come after this five-year planning horizon.

The comments underline a broader trend across Europe, where utilities continue to prioritise renewables and grids in the near term, while nuclear expansion is increasingly viewed as a longer-term, state-backed infrastructure strategy rather than a purely commercial undertaking.