Nuclear, onshore wind cheapest way to meet sweden's electricity needs, OECD report says

OECD: Nuclear and Onshore Wind Are Sweden's Cheapest Electricity Sources

Sweden's Energy Future: Nuclear and Onshore Wind Lead the Way

OECD Report Highlights Cost-Effective Solutions

STOCKHOLM, March 4 (Reuters) - Expanding nuclear and onshore wind power is the cheapest way for Sweden to meet surging electricity demand, leaving no place for offshore wind, the OECD's Nuclear Energy Agency said on Wednesday.

Sweden is aiming for net zero emissions by 2045. Electricity demand is expected to double as transport and industries such as steel shift to cleaner power.

Nuclear and Onshore Wind: The Leading Roles

"It is incontrovertible that both nuclear energy, including long-term operations and new build, and onshore wind will play the leading roles in any future least-cost capacity mix," the NEA said in the report.

Projected Capacity and Costs for 2050

In the NEA's base case for 2050, with an annual system cost of around $18 billion, Sweden has 13 gigawatts of installed nuclear power and 30 GW of onshore wind.

A similar system cost - covering generation, transmission, balancing and backup - could be achieved with 8 GW to 19 GW of nuclear energy, plus 10 GW to 55 GW of onshore wind.

Sweden currently has 7 GW of installed nuclear capacity and 17 GW of onshore wind, and only around 200 megawatts of offshore wind.

Offshore Wind: Limited Role for Now

If nuclear builds become more expensive or electricity imports cheaper, "there might be an opening for offshore wind to enter Sweden's optimal capacity mix", the report said. "For the time being, this is not the case."

Cost Comparison of Energy Sources

Onshore wind is the cheapest to build at around $1,500 per kilowatt, followed by offshore wind at $3,000 and nuclear at $7,000, the report said.

But nuclear reactors can produce round-the-clock electricity independent of the weather, reducing overall system costs, the NEA said.

Government Policy and Future Outlook

Sweden's right-of-centre government wants the equivalent of around 10 new, full-size reactors by 2045 to complement the six now in operation.

It has offered cheap loans and price guarantees to developers for 2,500 MW of new capacity. It has cut subsidies for offshore wind and rejected applications for sites off the Baltic coast.

Current Electricity Generation Mix

Sweden's electricity generation is already essentially fossil-free, with around 40% coming from hydro-electric power, 29% from nuclear, 21% from wind, 8% from thermal power and 2% from solar.

(Reporting by Simon Johnson. Editong by Mark Potter)