Co-ownership and incentives to avoid unplanned outages at Swedish nuclear power plants

Unplanned outages at Swedish nuclear power plants reduce electricity supply, leading to higher prices. The resulting price increase partly offsets the loss from the outage by raising revenues from the owners’ other generation. The project examines how these two effects shape nuclear power owners’ financial incentives to prevent outages and restore production quickly, and how the co-ownership of Swedish nuclear plants shapes these incentives. When several companies own shares in the same reactors, they share the loss from an outage. At the same time, each company receives a share of the increased revenues from both the nuclear capacity that remains in operation and other generation in its portfolio.

The project analyses Swedish nuclear outages from 2021 to 2024. Preliminary results show that a 1 GW outage for five days, equivalent to the capacity of a typical-sized reactor, results in lost revenue from the unavailable nuclear generation and costs in the balancing and intraday markets totaling EUR 8.4 million. At the same time, revenues increase by EUR 7.3 million from the remaining nuclear generation and by EUR 3.4 million from other generation. The net revenue is therefore EUR 2.3 million for all nuclear owners combined under the current ownership structure. In a counterfactual scenario where each company owns its nuclear capacity exclusively, the net effect is negative for all three companies. However, the results provide no indication that outages are deliberate or that owners have timed them to coincide with periods when their price effects are particularly large.