(Bloomberg) -- Uniper SE is making plans to build small-scale nuclear reactors in Sweden as demand for electricity is poised to climb in the next decade.
Four older reactors have shut permanently in the past few years, leading to soaring costs in the south during cold winter days and even triggering the start of an almost 50-year-old oil plant. This caused a fierce political debate about the need for more local generation as most new capacity is wind turbines in the north.
The German utility has applied for government funding to build a non-nuclear prototype of a small modular reactor at its existing Oskarshamn plant by 2024. The prototype will test the material and technology used in a lead-cooled reactor for five years, using electricity rather than uranium as fuel.
“We see a clear role for nuclear power in the future energy system,” said Johan Svenningsson, chief executive officer for Uniper in Sweden. “It is important to not close any doors.”
Small modular reactors are drawing the attention of policy makers across the U.S. and Europe because of their potential to help meet climate challenges. Uniper's majority owner, Fortum Oyj, and Sweden's biggest nuclear operator Vattenfall AB are taking part in a project to build a unit in Estonia.
Fortum expects Swedish demand to jump 70% in the next 25 years as power hungry industries transform to use electricity instead of fossil fuels.
Uniper formed a joint venture with scientist Janne Wallenius and his company Blykalla, which developed the lead-cooled design for a small reactor.
The aim is to gain enough experience from the trial to be able to build a full-scale commercial version during the next decade. They could cost about 2 billion kronor ($242 million) each. The prototype unit will cost about 250 million kronor, and the joint venture will apply for funding for half that amount from the Swedish energy agency.
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