On Thursday Vattenfall and E.ON announced that two of the reactors at the Ringhals power plant would close by 2020. The announcement comes a day after E.ON and Fortum said they would close two of the Oskarshamn reactors by 2019.
Four of Sweden’s ten reactors are being decommissioned early as a result of falling electricity prices and the Swedish government’s imposition of a nuclear capacity tax. Vattenfall, E.ON and Fortum are together facing losses of more than SKr 32 billion from the early closure.
The utilities are not the only ones to suffer, however. A number of analysts suggest the closure will erode the government’s budget. The Confederation of Swedish Enterprise (Svenskt Näringsliv) has calculated that the early closure will in fact cost the Treasury an annual SKr 1.5 billion annually in lost revenue.
At an extraordinary shareholders’ meeting on Wednesday, E.ON made a final decision to close two nuclear reactors at the Oskarshamn power plant.
One of the reactors has already been shut down and will not be re-started while the second reactor will close some time between 2017 and 2019. Oskarshamn’s third reactor, which is the newest, will be kept in operation until 2045.
Low electricity prices and the introduction of the nuclear capacity tax lie behind the decision to close the reactors.
And, at another extraordinary shareholders’ meeting to be held later today, E.ON and Vattenfall will discus the timeframe for the closure of two reactors at Ringhals. Vattenfall has said they should be closed by 2020, but E.ON has said it needs more time.
Following yesterday’s decision, Lars Hjälmered, the Moderates’ spokesman on energy policy, has slammed the government’s energy policy, suggesting it lacks long-term predictability.
When Volkswagen initially placed a bid on the rest of Scania last year it faced massive opposition. Swedish institutional investors such as the Fourth National Pension Fund (AP4), AMF, Robur and Skandia Liv rejected the bid but eventually had to concede defeat.
AP4, AMF and Robur now say they are open to the idea of buying back the truck maker from troubled Volkswagen. “Scania is a quality company, which we know well. Given the right valuation and circumstances, we are always interested in investing in such a company,” Robur’s Marianne Nilsson says.
Sweden can continue to tax nuclear power production, following a ruling by the European Court of Justice (ECJ) in the government’s favour. The Court ruled that the tax did not fall within the scope of two European Council directives, and is a national, rather than a European Commission matter.
The tax has cost OKG, which operates the Oskarshamn nuclear power plant, an additional SKr 1 billion this year alone and is one of the main reasons as to why four nuclear reactors will close early. Following the ruling, OKG CEO Johan Sveningsson expressed his disappointment and anger, saying that Swedish energy policy has unfortunately been designed in such a way that competition on the deregulated market has been eliminated.
The ECJ ruling is the final nail in the coffin for the two Oskarshamn reactors, which will now close early along with the two Ringhals reactors, comments DI. Sveningsson says: “This is value destruction on a massive scale with billion kronor losses for the owners. In addition, it increases the vulnerability of the Swedish electricity supply”.
A Dagens Industri study shows that the Volvo Group can raise close to SKr 60 billion by divesting a number of odd assets, shareholdings and properties. The holdings include a stake in Inner Mongolia Hauler Joint Stock worth SKr 2 billion, and in Germany’s Deutz worth SKr 1 billion.
Other holdings include Volvo Information Technology, which is Sweden’s largest IT consulting company with sales of SKr 9.7 billion, 20% of which is from external customers. There has been talk of divesting or outsourcing the business in the past year.
Volvo is also one of Sweden’s largest property companies; the buildings and land owned by the Group have a booked value of close to SKr 28 billion.
On 20 March SVT reported that investment company Industrivärden had discovered a listening device at its office and reported the matter to the police. Later TV4 revealed that a GSM bugging device had been planted under a radiator in Industrivärden’s boardroom.
In an interview with TV4 in June, Sverker Martin Löf, the former chairman of the board of Industrivärden, was asked if he thought the new chairman Fredrik Lundberg lay behind the planting of the bug. Löf declined to comment, but said that Lundberg had moved forward his position after the discovery of the device.
Based on the police’s findings and sources within Industrivärden, DI can now reveal that the bug was not installed by an outsider to listen in on Industrivärden. Moreover the plan seems to have been hatched internally to discredit opponents and make the then senior management within Industrivärden appear the victim in the ongoing power struggle, say well-placed sources.
The prosecutor is now planning to close the investigation due to lack of evidence of interference from an outside party.
Concerns about Sweden’s housing market bubble are spreading, writes Dagens Industri (DI) in an analysis. However, too few see the link between rising household debt and the currently extremely low interest rates, continues the paper, and calls on politicians to take control of the situation before the housing market bubble bursts.
The fact that the Riksbank’s policy has helped inflate the bubble has gone unmentioned in the news, claims the paper, saying the time has come for the government to rein in the governor of the central bank.
The US Department of Justice (DOJ) has threatened to sue telecom operator TeliaSonera for SKr 8 billion in the wake of the corruption scandal in Uzbekistan, sources have told Svenska Dagbladet (SvD). TeliaSonera is now seeking settlement outside court.
Peter Utterström, an independent lawyer and leading expert on US corruption laws, believes that the threat from DOJ has spurred TeliaSonera to divest its Eurasia operations and show it is serious about cleaning up its business.
Sweden’s booming housing market could be heading into a bubble, warns the National Institute for Economic Research, NIER, according to SVT.
Rising incomes, low interest rates and less tax cannot alone explain the latest increase in home prices, according to the NIER report.
“Prices have continued up. The rate of increase is 10 to 15% per year so it cannot continue for ever,” comments Mats Dillén, director general of NIER, who says that unless something is done to dampen prices Sweden could be heading towards a crash.
Last week Svenska Dagbladet (SvD) reported that the Wallenberg sphere-owned health care and care provider Aleris demands SKr 60,000 in rent for temporary refugee accommodation in Gothenburg.
Morgan Johansson, the justice and migration minister, has described the high rent as “objectionable”, and is calling on Marcus Wallenberg and Björn Savén, chair of private equity firm IK which owns care provider Attendo, to take action.
“A nod from the owners would suffice for the companies to lower their prices,” Johansson tells SvD.