German utilities and government disagree on ‘bad bank’ proposal

A plan by Germany’s major utilities to set up a ‘bad bank’ as a means of transferring the risks associated with decommissioning has been rejected by the country’s environment minister.

Minister Barbara Hendricks said: “The full responsibility for the safe phasing out, closure, decommissioning and interim storage of nuclear waste lies with the energy companies.”
Barbara Hendricks
Eon, RWE and EnBW have discussed the creation of a state-owned foundation to oversee the decommissioning process, according to Spiegel. Under the plan, the utilities would transfer to the foundation billions of euros in reserves that they have built up to pay for demolition and disposal. In return, the German government would shoulder the risk for any cost overruns.

The German government ordered a phasing out of nuclear energy after the Fukushima incident in Japan and the subsequent decommissioning process is expected to cost around $41bn (€30bn) for those companies.

One German energy executive said on Sunday that while the idea had been discussed, there were no concrete plans. Eon, RWE and EnBW all declined to comment.

The proposal is the latest sign of strain between Berlin and utilities, which have clashed in the courts over the closure of nuclear plants and the validity of a nuclear fuel tax.

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