Germany Said Closer to Atomic Waste Deal Easing EON, RWE BurdenTino Andresen and Brian Parkin
Utilities, state could share final waste storage costs
Plant owners aim to limit risk as Germany phases out nuclear
German lawmakers signaled they’re willing to have taxpayers share some of the expenses for disposing of nuclear waste that are burdening utilities such as E.ON SE and RWE AG, according to people familiar with the matter, as the nation moves to exit its atomic-power era.
A Berlin-based cross-party commission is discussing the wind-down of the industry, which will see the last eight operational plants closed by 2022. Consensus has emerged that the nuclear operators should pay for shutting and cleaning up the the reactors, while sharing costs of final waste disposal with taxpayers, said people close to the talks, who asked not to be named as the meetings haven’t concluded and aren’t public.
Responsibility for final storage, where costs are the most difficult to calculate, would be transferred to the government, the people said, thereby limiting the amount operators would have to pay. The utilities have been lobbying for a sharp delineation of their total liabilities amid concern that disposal costs might soar, making them unviable as public companies.
The government may assume responsibility for final storage as soon as this decade, according to proposals the commission’s three chairmen presented in a private meeting Friday. Most of the liability for the interim storage of spent fuel may be transferred later to the government, probably in the following decade, one of the people said.
EU38.3 Billion Provisions
Interim and final waste storage account for about 40 percent of the shutdown’s estimated expenses.
RWE, EON, Vattenfall AB, Energie Baden-Wuerttemberg AG and Stadtwerke Muenchen GmbH have 38.3 billion euros ($43.1 billion) set aside for terminating their nuclear activities. Between 17 billion euros and 19 billion euros may be earmarked for reactor decommissioning and post-2022 site maintenance, the people said. Financing intermediate storage and the subsequent move to permanent storage may be covered by a fund seeded with the utilities’ remaining provisions and topped up by the taxpayer if cost estimates are exceeded.
Backed by the ruling Christian Democrats, the utilities’ canvassing of the commission has made gains amid concern that unlimited liabilities may torpedo the firms’ viability in capital markets. The keen support in German society for nuclear power from the 1960s onwards has also been cited as a rationale for broadening liability.
A Der Spiegel report in September caused the shares of EON and RWE to fall the most in as much as 16 years after the magazine said the utilities’ provisions were insufficient to cover their nuclear liabilities. Economy and Energy Minister Sigmar Gabriel called the report “irresponsible speculation” and said in October that reserves set aside “completely reflect the costs.”
The commission, whose 19 members include lawmakers from government and opposition parties, a trade unionist and a bishop but not the utilities, met on Feb. 12 without concluding its talks, and has one more scheduled meeting on Feb. 23. Its members are willing to seek consensus on their eventual proposal to the government, the people close to the talks said.
As much as 60 percent of the utilities’ provisions may be consumed by a reactor cleanup lasting 10 years or longer. The companies may aim for savings by banding together and forming a consortium, the people said. Intermediate storage and bridging finance may be covered by the other 40 percent of the money, payable in tranches through the fund, they said.
The commission’s talks have been clouded as its members struggle with the uncertainties of predicting finance requirements as far as 2050, when the final storage of nuclear waste is due. Differencesremain over how to divide provisions between intermediate and final storage, the people said.
The people said the commission has looked at Switzerland’s own nuclear wind-down to get an idea of possible costs. Decommissioning the Alpine nation’s 5 operational plants and the disposal of waste may cost 16 billion francs ($16.4 billion), according to the Swiss government.