German plan to close nuclear loophole a blow to utilities

Germany’s government is attempting to change the law with regard to nuclear liability in order to fund its phasing out of the sector, and it’s a move which could prove to be hugely expensive to the country’s utilities.

The government wants to close a legal loophole to prevent utilities from evading a $45bn payment to fund the country's nuclear exit, a copy of the draft law seen by Reuters shows.
E.ON building
E.ON, which has announced plans to spin-off its ailing power plants, threatened legal action on Wednesday if the revision of the law goes ahead.

"Should (the draft) be passed in its current form, we would likely have to take legal action," a spokesman for E.ON said in emailed comments to Reuters.

The current law states energy companies are only liable for spun off companies for five years. The revised law will make them liable for the costs of shutting down and decommissioning power plants, as well as disposing of nuclear waste, for as long as it takes, even if they spin off subsidiaries that own the nuclear entities.

"The five-year period is by far too short. Dismantling a nuclear plant alone usually takes about 20 years," the text of the draft law said. It foresees extending liability until the point at which remaining nuclear waste has been sealed.

Germany's "big four" utilities, E.ON, RWE, EnBW and Vattenfall, have set aside a combined EUR38.5bn to cover the dismantling of their nuclear plants. But there has been concern that they might break up to avoid paying for dismantling the plants - the last of which will be shut for good in 2022 - and the revised law aims to prevent the costs falling on the taxpayer.

Relevant government ministries approved the plans on Wednesday with few changes and the Cabinet will now discuss it, an economy ministry spokeswoman said.


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