German Utilities Pass Government Atomic Cleanup Stress Testby , , and
Economy Ministry doesn't see need for immediate action
Companies say worst-case scenarios are `unrealistic'
Utilities in Germany have enough funds to pay for the shutdown and cleanup of nuclear power plants as decommissioning moves a step closer, the Economy Ministry said Saturday.
Total reserves set aside by EON SE, RWE AG, Energie Baden-Wuerttemberg AG, Vattenfall AB, and Stadtwerke Muenchen GmbH of 38.3 billion euros ($43.5 billion) “completely reflect the costs,” Economy Minister Sigmar Gabriel said in an e-mailed statement.
Chancellor Angela Merkel’s government decided in 2011 to phase out nuclear power by 2022 in light of the Fukushima disaster in Japan. A shift to renewable energy has resulted in slumping wholesale power prices exacerbated by an economic slowdown. Shares in EON and RWE, Germany’s biggest utilities, fell last month by the most in as much as 16 years on concern their provisions for decommissioning nuclear plants may prove insufficient.
Atomic plant operators said they disagree with the assumptions of some worst-case scenarios in a government-commissioned study by auditing company Warth & Klein Grant Thornton AG. The economy ministry said it doesn’t see any need for immediate action beyond a draft law that seeks to make sure the operators of Germany’s nuclear reactors can’t escape liability for the costs, as well as setting up a commission to review funding for the nation’s atomic exit. The proposed law still needs to be approved.
The cost estimates provided by the utilities exceed international reference values, the ministry said, citing the study.
Different scenarios associated with the decommissioning process result in a range of necessary provisions from 25 billion euros to 77 billion euros, the ministry said, due to factors such as interest and cost increases.
“We consider scenarios with high provisions improbable,” Gabriel said. EON, RWE, EnBW and Vattenfall said in a joint e-mailed statement that such scenarios are “unrealistic and have never been used in any sector.”
Stadtwerke Muenchen, which is a minority holder of nuclear operations, didn’t immediately respond to an e-mail seeking comment outside business hours.
“The stress test results puts any potential negotiations with the Government on provision funding on a sound footing,” Sanford C. Bernstein & Co. analysts, led by Deepa Venkateswaran, said Saturday in a note to clients. The talks will focus on the utilities’ estimates of the funds necessary for the work, “as opposed to speculation doubting their level,” according to the note.