Rolls-Royce Beats GE Vernova to Supply New Reactors to Sweden
(Bloomberg) Sweden picked Rolls-Royce Holdings Plc over GE Vernova Inc. to supply several new small nuclear reactors to help meet surging power demand in the decades ahead.
The offer by the British company was the best overall, in terms of the supply chain, timings and returns, Anna Borg, chief executive officer of state-owned utility Vattenfall AB said at a briefing in Stockholm.
Rolls Royce, which competed with US-based Vernova in the final decision process, is gaining momentum with its technology, having been picked previously by both the UK and Czech Republic to deliver new reactors. The modules will be constructed in these countries and being European was an advantage, but not the sole reason, Borg said.
“It’s a supply chain that is already well developed, especially regarding critical components that will be important to us and the majority of the suppliers are also geographically close to where we are,” Borg said. “That means less risk for disturbances in transportation routes, but also less exposure to geopolitical impacts.”
Building out Sweden’s nuclear capacity was a central promise from the center-right coalition ahead of the last election in 2022. With the electrification of everything from heavy industry to transportation, Sweden’s power demand is expected to surge in the coming decades along with most other developed nations.
Financial details of the contract weren’t disclosed by Vattenfall or project company Videberg Kraft, but the UK government said in a statement that it was a “multibillion-pound deal,” helped by Business Secretary Peter Kyle’s visit to Sweden earlier this year. The Rolls-Royce SMR is in the final stages of the UK regulatory process, the company said in a separate statement.
Rolls-Royce SMR previously signed a deal with Great British Energy – Nuclear for the nation’s first SMRs, as well as an agreement with the Czech Republic’s CEZ Group.
Located on the nation’s west coast, the so-called small modular reactors would provide a combined output on par with Sweden’s largest reactor today. The target is that they will start to generate power by the middle of the next decade.
Three Reactors
The project includes three reactors of 470 megawatts each. They will be built simultaneously in part, with construction on the second starting before the first is completed, Borg said.
The project company, Videberg Kraft, was set up last year by Vattenfall, which was the majority owner. The state has plans to own 60% of the shares, with Vattenfall holding 20%. Industrikraft, a consortium which includes some of the nation’s biggest power consumers, has the remaining stake.
Sweden has six reactors in operation now, providing about a third of the nation’s power. Hydro generation is the biggest power source, with almost half. However, a growing share of weather-dependent renewables has led to price volatility, imbalances and a lack of available grid capacity. The solution, according to the center-right cabinet, has to be nuclear.
But it’s a gamble given how technologies such as solar and wind continue to get cheaper, and critics argue that energy storage and other rapidly developing technologies could balance weather-dependent power sources.
Videberg Kraft is not the only firm looking at building new reactors in Sweden. Applications have also been filed by startup Blykalla AB and nuclear services company Studsvik AB.
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