Tax relief for energy giants

Following on from the cross-party energy agreement in the spring, Sweden’s coalition government is planning tax cuts of some SKr 10 billion. The output tax on nuclear power will be phased out over two years, starting in 2017, while the property tax on hydropower will be reduced over four years, from 2.8% to 0.5% of the taxation value. In practice, Vattenfall, Uniper and Fortum will each receive a share of the cuts, with households footing the bill. Taxes on electricity for an average household will rise by SKr 800 per year, say experts.

Not necessarily the end for nuclear power

The government recently announced it wants Sweden to move towards a completely renewable energy system, a decision that has caused concern because of potential supply shortages for business if nuclear power is phased out. However, on Wednesday Energy Minister Ibrahim Baylan clarified that the new model does not necessarily mean the end for Swedish nuclear power.

If there is a strictly business line basis for building new nuclear power plants then this should be made politically possible, he stated. “There may be a situation where we produce 120% of our need and export the rest,” he says. However, he does not believe this will happen. “Nuclear power is experiencing difficulties with or without taxes and will sooner or later be phased out,” he says.

Instead Ibrahim Baylan considers hydropower to have huge potential to supply the basic industries. “We need to reduce the political risk so that the market is able to invest,” he says.