Sweden's Blykalla applies for state funds to build nuclear reactor park

STOCKHOLM, June 5 (Reuters) - Swedish nuclear reactor developer Blykalla said on Friday it had applied for a share of billions of crowns promised by the government in cheap loans and price guarantees to build an advanced reactor park near the city of Gavle.

Blykalla is the second applicant to the financing scheme after state-owned utility Vattenfall, which plans to construct three to five small modular reactors (SMRs) at its Ringhals nuclear facility in southwest Sweden.

"We will now also start actual negotiations with the government," Blykalla CEO Jacob Stedman said.

He declined to say how much funding the company was seeking, but said projects of this kind typically run into the tens of billions of Swedish crowns.

Blykalla is developing 55-megawatt reactors using an updated version of lead-cooling technology developed for Russian nuclear submarines in the 1950s.

Its planned reactor park would generate around 330 MW of electricity, enough to power 150,000 homes, and could start producing power in the first half of the 2030s.

New reactors require approval from the government, the nuclear regulator, the environmental court and the European Union.

Sweden's right-of-centre government wants to revive nuclear power amid energy security concerns and forecasts that electricity demand will double by 2045.

With private investors deterred by high costs and risks, the government has offered up to 440 billion crowns ($47 billion) in loans, 40-year price guarantees and support for nuclear waste management, aiming to spur the construction of at least 5,000 MW of new nuclear capacity.

It also plans to take a majority stake in Videberg Kraft - Vattenfall's nuclear development arm - and provide up to 34 billion crowns in funding.

Critics say renewables such as onshore wind would be cheaper and quicker to build, and question whether demand will rise as projected, noting that electricity consumption has been broadly flat since the 1990s due to efficiency gains.

Overall, the government is targeting capacity equivalent to around 10 new, full-size reactors by 2045 to complement the six currently in operation.

Sweden's electricity production is already 98% fossil free with hydro, nuclear and wind the main sources.

($1 = 9.3427 Swedish crowns)

(Reporting by Simon Johnson. Editing by Mark Potter)