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UPDATE 2-Sweden's Ringhals to shut two reactors by 2020
October 15, 2015 / 10:54 AM / 2 years ago

UPDATE 2-Sweden's Ringhals to shut two reactors by 2020

* Ringhals-2 to shut down in 2019, Ringhals-1 in 2020

* The two reactors produce 7 percent of Sweden’s power

* Announcement ends months of uncertainty

* Could spell higher power prices (Adds market reaction, analyst)

OSLO, Oct 15 (Reuters) - Ringhals nuclear power plant will close two of its reactors by 2020, shareholders said on Thursday, ending uncertainty over the future of units which produce 7 percent of Sweden’s power.

Analysts said the decision in the loner term could spell higher long-term Nordic power prices.

Swedish utility Vattenfall holds a 70.4-percent stake in Ringhals and Germany’s E.ON owns the rest.

The two companies have clashed over when to shut the two reactors, which were previously expected to operate until around 2025.

“At the extraordinary general meeting held today in Ringhals AB, it has been decided to end operation of Ringhals-2 in 2019 and Ringhals-1 in 2020,” the companies said in a statement to the Nordic power bourse.

Ringhals’ board decided last month to halt investment projects from 2017 and cancel new investments in the two reactors, which have a total capacity of 1,746 megawatts.

Vattenfall has come under pressure to close older reactors in Sweden after a minority government made up of Social Democrats and the Green Party came to power in 2014, raising taxes on nuclear power.

The state-owned utility took a 17 billion Swedish crown ($2.08 billion) writedown in the second quarter due to lower nuclear power profits and the planned reactor closures.

The Ringhals announcement comes a day after E.ON and Finland’s Fortum said they would shut down two nuclear reactors at the Oskarshamn plant in Sweden before the end of their planned life.

Power for delivery in 2019 was up 5 cents to 24.35 euros per megawatt-hour (MWh) by 1200 GMT, while the 2020 contract didn’t trade.

“The decision to shut (the two reactors) has already been priced in,” said Kristoffer Uppheim, an analyst at Thomson Reuters Point Carbon.

However, wholesale power markets could see an impact in the long run, analysts said.

“With four Swedish nukes out, it will be interesting to see what the prices look like for winter 2020,” Uppheim said.

Marius Holm Rennesund, a senior consultant at Oslo consultancy THEMA, said phasing out Ringhals 1 and 2 could lead to an increase in prices of roughly 2 euros per MWh in 2020.

Combined with closure of the two Oskarshamn reactors, the impact could amount to around 3.5 euros per MWh in 2020, he said.

$1 = 8.1572 Swedish crowns Reporting by Nerijus Adomaitis, Stine Jacobsen and Christoph Steitz; editing by Jason Neely; Editing by Gwladys Fouche and Pravin Char

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