Germany approves nuclear waste storage deal with utilities

Germany has reportedly approved a deal with its major utilities on how to cover the costs of handling and storing nuclear waste.

The cabinet on Wednesday passed an agreement whereby the nation's four largest utilities – E.ON, RWE, EnBW and Vattenfall – will begin paying into a €23.6bn ($26bn) fund, and in return the government will assume responsibility for the practicalities of storing nuclear waste.

The utilities will continue to be responsible for the costs of shutting down their nuclear power plants by 2022.

The deal, reached after intense talks, is aimed at addressing uncertainty over potential costs for the taxpayer, as well as offering financial clarity for the utilities and their investors.

The utilities had initially earmarked nearly $45bn in provisions to pay for nuclear plant dismantling and waste storage. But concerns over their financial health fuelled fears that the power firms may be unable to turn the provisions -- mainly cash, assets and shares -- into liquidity, eventually leaving taxpayers to foot all or part of the bill.

In April, the Commission on the Review of Funding for the Phase-Out of Nuclear Energy (Kommission zur Überprüfung der Finanzierung des Kernenergieausstiegs, or KFK) recommended setting the utilities’ contribution to the waste storage fund at €23.3bn, which included their own estimates plus an additional 35 per cent risk premium designed to cover any extra costs.

All four utilities objected to the addition of the risk premium. RWE, E.ON and EnBW, in a joint statement, said the proposal would “overburden energy companies’ capacities”, while Vattenfall said “the so-called risk premium which the Commission requests on top of the amount of provisions already in the books of the companies is disproportionate to the economic strength of the affected utilities”.  

However, it now appears that the utilities have accepted the government’s proposal. 

In a statement, E.ON said the agreement raises "the possibility of finding a social consensus that will put an end to a highly controversial discussion which has been ongoing for decades", and that the company "is prepared to make a significant contribution to make this consensus happen. The implementation will coincide with a release from liability for interim and final storage of nuclear waste," it added.

A discussion of where to store the waste is also ongoing, with an expert commission reporting in July that a suitable long-term storage facility may not materialize until the 22nd century. Currently, German radioactive waste is placed in interim storage, with used fuel mostly stored at reactor sites. Most German used fuel is reprocessed overseas.


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