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PP RUEHAG RUEHAST RUEHDA RUEHDBU RUEHDF RUEHFL RUEHIK RUEHKW RUEHLA
RUEHLN RUEHLZ RUEHNP RUEHPOD RUEHROV RUEHSK RUEHSR RUEHVK RUEHYG
DE RUEHSM #0088/01 0431316
ZNR UUUUU ZZH
P 121316Z FEB 09
FM AMEMBASSY STOCKHOLM
TO RUEHC/SECSTATE WASHDC PRIORITY 4100
RHEBAAA/DEPT OF ENERGY WASHDC PRIORITY
INFO RUEHZL/EUROPEAN POLITICAL COLLECTIVE

UNCLAS SECTION 01 OF 02 STOCKHOLM 000088 
 
SIPDIS 
 
E.O. 12958: N/A 
TAGS: ENRG SENV KGHG PREL SW
SUBJECT: SWEDEN REVERSES BAN ON NEW NUCLEAR REACTORS 
 
¶1. Summary:  The four center-right governing Alliance party leaders 
announced the removal of the ban on construction of new nuclear 
power reactors February 5.  This is a key element of the GOS' 
Climate and Energy policy bill, which it will send to Parliament in 
March.  New reactors may be built to replace old ones -- but only at 
the current nuclear sites and on the condition that no more than 10 
reactors are in operation at any one time.  The agreement on energy 
policy also includes other ambitions.  By 2020 Sweden will: 
 
-- use 50 percent renewable energy, 
-- use 10 percent renewable energy in the transport sector, 
-- have 20 percent more efficient energy usage, and 
-- have a 40 percent reduction in greenhouse gas (GHG) emissions. 
 
The GOS invited the opposition to consultations aimed at getting a 
broad political agreement.  Reversal of the ban represents a victory 
for PM Reinfeldt, a move towards a pragmatic political platform for 
the 2010 general election.  Given his Center Party coalition 
partner's historical anti-nuclear stance, this new agreement 
underlines both Reinfeldt's leadership and the adaptability of the 
governing Alliance coalition.  End summary. 
 
¶2.  The four parties of Sweden's centre-right governing Alliance on 
February 5 announced they had reached a historic agreement to 
reverse a 1997 decision to phase out the country's 10 nuclear 
reactors.  The party leaders agreed that the plants can instead be 
replaced at the end of their life spans as part of an ambitious new 
climate program. 
 
A Tortured History 
------------------ 
 
¶3.  Nuclear power accounts for nearly half of Sweden's electricity 
production.  Nuclear energy policy has caused serious political 
divisions over the last three decades, leading to abrupt reversal of 
energy policies, considerable uncertainties for market operators, as 
well as even causing a government to resign over the issue (Center 
Party-led government in 1978). 
 
¶4.  The country voted in a non-binding referendum in 1980 to phase 
out Sweden's 12 nuclear reactors by 2010, but that target was 
abandoned in 1997 after officials acknowledged that there would not 
be sufficient alternative energy sources to replace the nuclear 
output.  Instead, the government agreed to phase out nuclear power 
over the course of about three decades by not replacing the aging 
reactors.  The Center Party in particular has long been a virulent 
opponent of a return to nuclear energy. 
 
A Pragmatic Political Decision 
------------------------------ 
 
¶5.  Pressure mounted on Center Party leader Maud Olofsson late 
January when her coalition partner Christian Democrats switched 
sides on the issue, joining the Moderates and the Liberal Party in 
calling for the ban to be lifted.  After a top secret party meeting 
on February 4, the party leadership announced it had the mandate to 
negotiate a new nuclear energy deal.  Olofsson was careful to point 
out that the party has not changed its mind about nuclear power, but 
that the compromise is one the party can live with.  In return, she 
won a commitment for resources for the scaling up of renewable 
energy as well as energy efficiency programs, including for the 
development of wind energy and biomass. 
 
¶6.  Another measure, which will be further specified in the energy 
and climate bill to be presented to the Parliament on March 17, is 
that the carbon dioxide tax will be raised.  In total, GHG emissions 
will be reduced by 20 million tons compared to 1990 emissions.  Two 
thirds of these reductions will be done domestically and one third 
will be done through investments in other EU-countries and in 
developing countries. 
 
¶7.  Alliance government leaders hope that the deal will remove the 
problem of their decade-long division on the nuclear issue well 
before the next general election in September 2010.  The debate will 
likely be intense within the Center Party, although all Center Party 
MP's stand behind the agreement -- which strengthens party leader 
Maud Olofsson in the debate to come. 
 
A Divided Opposition 
-------------------- 
 
¶8.  Immediately after the Alliance's announcement, the three 
opposition parties - Social Democrats, Greens, and Left Party - 
called a press conference, where they criticized the deal and stated 
that if/when they are in government they intend to continue with the 
nuclear phase-out.  Maud Olofsson has invited the opposition parties 
to talks with the aim of getting broad political agreement.  If 
those attempts fail, the nuclear issue will figure prominently in 
the 2010 general election. 
 
Comment 
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STOCKHOLM 00000088  002 OF 002 
 
 
 
¶9.  With her party divided on the nuclear issue, Social Democrat 
Party leader Mona Sahlin faces a dilemma.  About half of the party 
favors building additional nuclear power plants, and the powerful 
trade unions and energy-intensive industries are vocally praising 
the Alliance government's deal.  Sahlin will face considerable 
opposition from within, then, if she appears to be closing the door 
to a broad agreement with the ruling Alliance parties.  But for the 
governing parties, this development is another significant move 
towards a pragmatic political platform for the 2010 general 
election.  Given his Center Party coalition partner's historical 
anti-nuclear stance, the deal also underlines PM Reinfeldt's 
leadership and the adaptability of the governing Alliance coalition. 
 
 
SILVERMAN