Sweden's Vattenfall applies for state aid for new nuclear reactors

STOCKHOLM, Dec 23 (Reuters) - Swedish utility Vattenfall has applied for state financing to build new reactors at its Ringhals plant, it said on Tuesday, the first company to do so under a scheme the government hopes will lead to a renaissance in nuclear power.

State-owned Vattenfall, through its majority-owned subsidiary Videberg Kraft, plans to build small, modular reactors (SMRs) at the site of its current Ringhals nuclear facility in south-west Sweden.

"State support will be critical for the project," Desiree Comstedt, head of new nuclear power at Vattenfall, said in a statement.

The government said the size and conditions for any financing would be subject to negotiation with Videberg Kraft. Financing will also need to be approved by the European Commission.

Sweden's right-of-centre government has promised to revive Sweden's nuclear power sector. In total, the government wants the equivalent of around 10 new, full-size reactors by 2045 to complement the current six in operation.

"New fossil free electricity production is critical for the electrification of Sweden's transport and industry," Prime Minister Ulf Kristersson said on X.

However, the industry and the power sector have been wary of pumping billions of dollars into projects that could prove unprofitable as the cost of renewable energy, such as wind and solar continues to fall.

To spur investment, the government will share the cost and risk of building around 5,000 MW of new capacity through a combination of cheap loans - up to 440 billion crowns ($47.76 billion) - and price guarantees.

In August, Vattenfall short-listed Britain's Rolls-Royce SMR RR.L and U.S. group GE Vernova GEV.N as potential suppliers of the reactors - three if it picks Rolls-Royce, or five BWRX-300 reactors from GE Vernova, giving a total capacity of 1,500 MW.

It will pick one sometime next year, but has said a final investment decision on new nuclear reactors will not be made until 2029.

Sweden's current reactors were all built in the 1970s and 1980s. Its electricity production is already almost entirely fossil-free, with hydropower accounting for around 40% of output, nuclear 30% and wind 20%.

($1 = 9.2126 Swedish crowns)

(Reporting by Simon JohnsonEditing by Tomasz Janowski)

((simon.c.johnson@thomsonreuters.com; +46 70 721 1045; Reuters Messaging: simon.c.johnson.reuters.com@reuters.net))