Merkel Will Scrap German Nuclear Plants by 2022 After Fukushima Disaster
German Chancellor Angela Merkel’s coalition endorsed a blueprint to shut its nuclear-power plants by 2022, repealing the law she pushed to extend the life of the reactors to become the biggest nation to exit atomic power.
EON AG and RWE AG (RWE), the two biggest utilities, led declines on the benchmark DAX stock index, with RWE falling to its lowest since December 2004 as the government retained a tax on spent fuel rods. Solar-power companies Q-Cells SE (QCE) and Solarworld AG (SWV) rallied.
The decision in the early morning hours today by coalition leaders in Berlin underscored Merkel’s flip-flop from a 2009 re- election promise to extend the life of nuclear reactors. She did her about-face after the March meltdown in Japan as the anti- nuclear Green Party gained in polls. Her party lost control of Baden-Wuerttemberg state to the Greens in March and finished behind them in a state election for the first time on May 22.
“As far as the government’s credibility is concerned, it was about damage limitation,” said Bernhard Jeggle, a utility analyst with Landesbank Baden Wuerttemberg in Stuttgart. “Those people who wanted to exit nuclear probably voted Green in the first place and will continue to choose the original rather than Merkel’s copy.”
Germany’s BWE renewable energy federation said this year its members were prepared to spend as much as 200 billion euros ($286 billion) by 2020 to develop wind and solar power. Merkel wants to present five or six bills in Cabinet on June 6, including a revamp of feed-in-tariffs for solar, wind and bio- mass power, new building insulation targets and plans to build new “smart” power grids.
Businesses and utilities opposed Merkel’s move, warning of increased costs and less reliable power sources. Merkel said the government will ensure the shift won’t disrupt power supplies fueling Europe’s biggest economy.
“Germany is one of the best-performing and economically most successful countries in the world,” Merkel said today. “For that to stay this way, we have to have a competitive energy supply. Our citizens trust that there is sufficient availability at any given time.”
Nuclear supplied some 22 percent of German power in 2010, while renewable sources provided 17 percent, the Economy Ministry said. Europe is split on the future of nuclear power, with France and the U.K. planning more reactors while Germany joined Switzerland in setting an exit date and Italy extended a moratorium on plans to re-enter atomic energy.
Germany is Europe’s largest power market, followed by France. Germany last year was a net exporter of power to France, sending 16.1 terawatt hours to the country compared with imports of 9.4 terawatt hours, according to data published by grid operate Reseau de Transport d’Electricite.
“It’s hard to see how they will replace the energy,” Anne Lauvergeon, chief executive officer of French state-owned Areva SA, the world’s biggest maker of nuclear equipment, said. “I’m not sure there is enough Polish coal, and it creates carbon problems. Alternative energy sources are intermittent sources. I think they will do what Austria did in its time: import nuclear electricity from neighboring countries.”
EON slumped 2.3 percent to 19.56 euros in Frankfurt trading, extending the stock’s decline to 15 percent this year. Smaller rival RWE fell 1.7 percent to 40.31 euros.
Q-Cells jumped 8.5 percent to 1.92 euros and Solarworld added 8.8 percent to 9.62 euros.
Merkel in March said she sought to accelerate the shutdown of Germany’s atomic power plants following Japan’s Fukushima disaster, the worst nuclear crisis since 1986. The decision reversed a 2010 plan to extend the operation of the facilities by an average of 12 years.
“The seven oldest reactors that have been placed under a moratorium and the Kruemmel nuclear power plant won’t go back online,” Environment Minister Norbert Roettgen told reporters following the coalition talks. “A second group of six nuclear power plants will go offline at the end of 2021 at the latest and the three most modern power plants will go offline 2022 at the latest.”
The proposal will have to be approved by Parliament before being enacted. It may also face legal challenges. Juergen Frech, a spokesman for Essen, Germany-based RWE, said in a statement today, “we will keep all our legal options open.”
Germany may keep one of the seven oldest reactors in reserve should the country be at risk of blackouts, Roettgen said later today at a press conference with Merkel in Berlin.
Tax on Fuel Rods
A tax on spent fuel rods introduced this year to cover some of the costs of their disposal as well as help the budget will stay on the statute books, Roettgen said.
With the possibility that a federal election in 2013 may result in a new government, Merkel is seeking broad backing for revamping nuclear policy.
Roettgen said there won’t be a revision clause, meaning there’s “clarity about the end” of nuclear power in Germany that can’t be turned back.
Anti-nuclear activists, such as Greenpeace, called the shutdown process too slow. The Greens called a party conference June 25 to decide whether to support Merkel’s U-turn.
The CDU’s “Wirtschaftsrat” or council of affiliated companies, said Merkel’s “go-it-alone” nuclear policy in Europe may add billions of euros to power bills paid by industry and consumers.
“I’ve heard lots about a phase-out of nuclear power but little about the costs of phasing in renewable energy,” its President Kurt Lauk told reporters in Berlin on May 25.
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