Finance
Sweden looks at compensation law to reduce risk in nuclear expansion
Published by Global Banking & Finance Review®
Posted on October 2, 2025
2 min readLast updated: January 21, 2026
Global Banking & Finance Review®
Company
Published by Global Banking & Finance Review®
Posted on October 2, 2025
2 min readLast updated: January 21, 2026
Sweden plans a compensation law to encourage nuclear investment, addressing investor concerns about political risks. The upcoming 2026 election could influence future policies.
STOCKHOLM (Reuters) -Sweden's right-wing government said on Thursday it would look at ways to put in place a law that would compensate nuclear power owners and developers if a future administration decided to close reactors down.
The government wants a huge expansion of nuclear power in the coming decades, but investors have been wary about financing, future profitability and the risks ensuing from potentially changing political priorities over the up to 100-year lifetime of a project.
"An owner of new nuclear power needs predictability," Deputy Prime Minister Ebba Busch told reporters.
"Sweden, unfortunately, has considerable experience of reactors being closed prematurely. Half our nuclear fleet has been closed, either as a result of direct or indirect political decisions."
The compensation scheme would provide further security for investors alongside a financing package passed by parliament earlier this year, she said.
Swedes voted in 1980 to phase out nuclear power but it has been making a comeback amid concerns about energy security and climate change.
The government has promised loans and price guarantees for nuclear developers, but analysts have warned that without cross-party support in parliament, the building programme is still in doubt.
All the opposition parties in parliament voted against the government's financing bill and Sweden will hold a national election in September 2026. Polls show the left opposition bloc in the lead.
Of the 12 reactors built in Sweden in the 1970s and 1980s, six remain in operation. The decision to close several reactors was taken for economic, rather than political reasons.
Electricity production is already almost entirely fossil-free in Sweden, with hydro-power accounting for around 40% of output, nuclear 30% and wind 20%.
(Reporting by Simon Johnson;Editing by Alison Williams)
Nuclear power is energy produced from nuclear reactions, primarily through fission, where atomic nuclei split to release energy, which is then used to generate electricity.
A compensation law is a legal framework that provides financial reimbursement to parties affected by certain actions, such as the closure of nuclear power plants.
Sustainability in energy refers to the ability to meet current energy needs without compromising the ability of future generations to meet their own energy needs, often focusing on renewable resources.
Climate change refers to significant changes in global temperatures and weather patterns over time, largely driven by human activities, particularly the burning of fossil fuels.
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