While its causes, humanitarian costs and impact on geopolitical paradigms will focus the minds of many a historian in the future, one of the most lasting impacts that Russia’s invasion of Ukraine had was to focus the minds of European policy-makers on energy security. The need to combine these concerns with climate mitigation and adaptation efforts and the role of the path adopted for the bloc’s sustainable energy transition has seen nuclear energy increasingly embraced by European governments.
Sweden is no exception. In 2022, the incoming centre-right-wing coalition government of Ulf Kristersson made no secret of its intention to embrace nuclear power. The last three months have proved fruitful in these efforts, with new financing models and frameworks to incentivise investment in nuclear energy capacity. Despite its many caveats, these efforts are well-meaning and likely to point in the right direction. Nuclear energy is not in any way ideal, but it is crucial to address both CO2 emissions and the intermittency issues faced by solar and wind energy. However, governments should be careful to not be more focused on cost containment and quick fixes rather than on realism and the actual security implications of expanding nuclear capacity while facing external threats.
It is also not a field where checks and balances should be relaxed, be it on the negotiating table or on operational standards. Nuclear energy projects famously tend to run over budget and overtime. Conflicts of interest will only invite public distrust and claims of corruption. Incompetence in nuclear energy is also incredibly dangerous. If there ever was a policy area where transparency and bland competence are crucial, nuclear energy is it; particularly at a time of rising geopolitical tensions with antagonistic neighbours.
Renewable Energy in Sweden’s Budget for 2026
Last week, the Swedish government presented its budget for 2026. As is the tradition in these parts, Finance Minister Elisabeth Svantesson (below) walked from the ministry’s offices to Riksdagen to deliver the document. The budget includes a range of provisions, including SEK 9 billion of support for Ukraine and claimed reforms totalling almost SEK 80 billion.
However, one of the topics that received most coverage in the report was the government’s energy policies and expenditure. A significant portion of the budget is allocated to energy research, with a proposed allocation of SEK1.5 billion, suggesting a strong focus on developing new energy technologies and solutions. An additional was put aside for energy planning is allocated SEK 1.195 billion, highlighting the importance of strategic planning and coordination in the energy sector.
Support for biogas production amounts to SEK1.035 billion while electricity preparedness received SEK705 million. Keeping up with electric vehicle (EV) adoption, SEK605 million was put aside for charging infrastructure. Wind and solar energy are mentioned but do not seem to have separate lines
Nuclear energy was also a prominent topic in the 2026 budget. The budget includes a specific line item for “Subvention of expected costs for loans to new nuclear power reactors” which accounts for SEK50 million. The document also refers to an additional expense dedicated to “Compensation for two-way contracts for difference for new nuclear power reactors” (“Ersättning för dubbelriktade differenskontrakt för nya kärnkraftsreaktorer”) for SEK1 million.
A Financial Framework for Nuclear
However, the figures above underestimate the incentives that the budget offers to nuclear energy. The budget also outlines a financial framework for negotiating support for companies in the nuclear energy sector. The framework is in three parts.
First, regarding the authorisation of loans, the budget allows loans from the National Debt Office for investments in new nuclear power worth up to SEK220 billion (in 2026 prices) between 2026 and 2045. Next, the budget also seeks to establish a risk reserve for additional loans in case of unexpected cost increases, up to another 220,000,000,000 SEK (in 2026 prices) for 2026-2045. This provides a buffer to address potential financial challenges in nuclear projects. Finally, there’s a financial commitment toward state support in forms of different contracts as long as it does not exceed a maximum of SEK 400 billion.
These measures come only three months after the government announced a new support model for financing new nuclear energy works, including provisions for a two-way Contracts for Difference (CfD) in nuclear energy and risk and profit-sharing mechanisms seemingly absent from the budget.
Mixed Reactions
The announcement of nuclear energy details was met with mixed reactions.
Commentators from the energy sector welcomed the budget’s nuclear ambitions, seeing them as long overdue steps toward stable baseload power and ensuring energy security, especially amid electrification pressures.
One criticism accused the government of presenting overly rosy cost and revenue assumptions, what it termed “glädjekalkyl”. Critics argue that estimates of construction costs, timelines, and future electricity prices are uncertain, and that the state (and taxpayers) may bear large, unpredictable risks.
Greenpeace criticised the scale of borrowing and state support for new nuclear as potentially diverting funds and political energy from faster, cheaper renewable alternatives. Some commentators also warn that locking in long-term nuclear contracts might hinder flexibility and innovation in emerging clean energy technologies.
“New nuclear power is a high-risk economic project and a climate scam. The Tidö government’s nuclear power project will place a massive mountain of debt on Swedish taxpayers and reduce the scope for reform for future governments. The billion-dollar subsidies for nuclear power also put a wet blanket over renewable electricity production that would contribute much more quickly to major emission reductions and more electricity. We expect the Riksdag to take responsibility and vote down the government’s budget, Erika Bjureby, Sweden director at Greenpeace, commented on this occasion.
Nuclear: Necessary, but Not Easy
Like the rest of the reception to the nuclear energy provisions of the budget, my views are mixed. I’m not a nuclear engineer, but I know enough to know that expanding nuclear capacity is both necessary and extremely complex.
Nuclear power is expensive, heavily regulated, slow to build and raises environmental concerns. Presently, risks such as meltdowns, radioactive waste, and proliferation of fissile materials are simply a part of running NPPs, according to the International Energy Agency (IEA). However, nuclear energy’s ability to produce energy without CO2 emissions or interruption is certainly appealing. Recent progress on small modular reactors seems to have inspired some hope that some of these issues, especially construction times, can be addressed, but the technology is still too young for us to know.
The risks are high and I’m fairly certain nuclear power would not have been re-embraced were it not for the energy security constraints that the war in Ukraine has imposed on Europe. Nevertheless, we must take the world as it is and nuclear power seems to be the only way to improve energy security while mitigating CO2 emissions.
Is Sweden’s Nuclear Push a Good Idea? It’s not an ideal solution, but given present conditions and priorities, it is difficult to disagree with it. I would however be suspicious of any boasting of cost-cutting and expedited deals. Few sectors can create as dangerous mistakes as nuclear energy.
Rising geopolitical tensions on the door of the Nordic countries should also warrant careful consideration. Seeing the dangers faced by nuclear power plants during the conflict in Ukraine and the ease of recent drone incursions, a security assessment of the actual implications of building more nuclear reactors in the present security environment would be very welcome, as would contingency plans.
Last but not least, new nuclear power plants will require the purchase of nuclear material and the disposal of nuclear waste, which will raise new questions. Who will Sweden buy nuclear material from? Will Sweden invest in the necessary nuclear waste management facilities? These are all crucial questions looming just beyond the government’s headline figures that will be crucial for the future.
