Sweden launches a new era of nuclear power: first application for state aid submitted

The Swedish government has received the first application for state aid under legislation designed to support investment in new nuclear power. The application concerns a project to build new reactors at the Ringhals site on the Värö peninsula, with a total installed capacity of around 1 500 MW.

The application was submitted by Videberg Kraft AB. The project is considering two options for the supplier and configuration: five GE Vernova Hitachi BWRX-300 reactors, or three SMRs from Rolls-Royce.

Videberg Kraft AB is a project company owned by Vattenfall AB and backed by industrial companies grouped in the Industrikraft i Sverige AB consortium.

The Industrikraft consortium was established in June 2024 to support the development of Sweden’s energy sector. It brings together ABB, Alfa Laval, Boliden, Hitachi Energy, Höganäs AB, SSAB, Saab, Stora Enso and Volvo Group. The consortium is seeking approval to acquire a 20% stake in January 2026.

Support mechanism: state loans and two-way CfDs

According to a government briefing, state support will be provided in two main forms. The first is government (state) loans to finance the construction and testing of new reactors, as well as planning and other preparatory work. The second is two-way contracts for the electricity generated (two-way Contracts for Difference, CfDs), under which an agreement between the nuclear power plant operator and the central government is intended to ensure a minimum level of compensation (protection when electricity prices are low) while also setting a cap on “excess compensation” (limiting gains when prices are high).

Support limits and key programme parameters

The government says the support is “limited” and is planned for investments in up to 5 000 MW of total installed capacity, equivalent to around four large nuclear units.

Support may be granted only if the following conditions are met:

• the new reactors must be located at a single site,
• the project’s total installed capacity must be at least 300 MWe,
• two-way CfDs may be concluded only after a new reactor has entered operation and been licensed to generate electricity at its nominal capacity.

The State Aid Act entered into force on 1 August, allowing interested parties to apply for support from that date. The Swedish parliament approved the government’s state aid proposal in May 2025.

Negotiations and dialogue with the European Commission

The application will now be assessed by the Ministry of Finance. Negotiations will then take place between the government and the project applicants on the terms and scale of the requested support.

The process will also include an “ongoing dialogue” with the European Commission before the EC assesses whether the proposed financing complies with EU state aid rules.

Timeline for supplier decision

Vattenfall said an “intensive evaluation process” is currently under way for both options under consideration (BWRX-300 and Rolls-Royce SMR), and that a decision on the final supplier is planned for 2026.

Minister for Financial Markets Niklas Wykman said receipt of the first application confirms that Swedish industrial companies are interested in participating in the construction of nuclear power plants. The government also expects further applications for state aid for new nuclear projects, following preliminary discussions with other parties.