Measures to spur investment in up to 5,000 MW of new-build
Sweden's parliament has approved a government proposal to offer state support for investments in new nuclear power, marking a significant step in the country's push to stabilise electricity prices and ensure long-term energy security.
The legislation outlines a financial support framework for companies planning to build nuclear reactors, including government-backed loans and contracts for difference (CfD) schemes.
The move aims to support projects with a total installed capacity of up to 5,000 MW —roughly equivalent to four large-scale reactors, a statement by the government said.
“This is a historic announcement that takes responsibility for public financing and taxpayers’ money,” said Sweden’s financial markets minister Niklas Wykman.
“An expansion of nuclear power is expected to result in greater price stability and lower system costs, which helps households as well as businesses,” Wykman said.
The aid package is part of Sweden’s broader strategy to address rising electricity price volatility and system imbalances. The government argues that increasing fossil-free baseload capacity is critical for supporting economic growth, job creation, and the green transition.
Under the approved framework, government loans will be available for construction, testing, and preparatory work, though they will only cover a portion of total project costs. Private capital will also be required, and loan repayments must begin once the reactors become operational.
Once new facilities are producing electricity at full capacity, two-way CfDs will be applied. These financial instruments guarantee a fixed “strike price” for electricity. If market prices fall below this level, the government compensates the producer, while if prices rise above it, the producer reimburses the government.
The new law also includes mechanisms for sharing risk and profits between the government and interested companies, the government statement said.
The act will come into force on 1 August 2025. Companies can begin submitting applications for state support on that date.
In August 2024, a government commission found that Sweden’s plans for a rapid expansion of its nuclear power capacity are likely to cost around 400 billion crowns ($39bn, €36bn) and should be financed by a mix of government loans and price guarantees, a government commission has recommended.
The commission proposed a programme of four or five new nuclear power plants with a total of 4,000-6,000 MW – or four large-scale reactors – of installed capacity in order to make the programme cost-effective.
Sweden will now need to seek approval for its state support scheme from the European Union under the bloc’s strict competition rules on state aid.
