Germany must compensate for nuclear closures

GERMANY’S highest court has ruled that the government should compensate utilities for ordering the shutdown of their nuclear power plants in the wake of the meltdown at Fukushima in 2011.

The Federal Constitutional Court ruled that while the government’s decision to shut down the country’s 17 nuclear plants by 2022 was lawful it must provide plant owners with “adequate compensation”.

The judges did not rule the amount of compensation that should be given to the affected utilities, which include E.ON, RWE and Vattenfall, but ordered that an agreement be reached by mid-2018.

E.ON welcomed the decision, saying it is prepared to “enter into constructive talks” with the government. It added that it will need to review the court’s decision in more detail to understand how much it might be able to claim in compensation.

Bloomberg says Goldman Sachs has estimated that the decision may be worth €700m (US$749.5m) to E.ON and up to €400m for RWE.

In 2010, the government extended the lives of several reactors – declaring nuclear energy a bridging technology in its wider low carbon transition. Reacting to the Fukushima meltdown, the government reversed its decision on nuclear, ordering a hastened shutdown.

“E.ON had invested several hundred million euros to extend the service life of its nuclear power plants,” the company said in a statement today. “The accelerated energy transition in the wake of the Fukushima accident in 2011 and the rapid nuclear phase-out had fully devalued these investments. However, there was to be no compensation.

“The Federal Constitutional Court found today that the legislator should have at least taken these losses into consideration for its decision at the time.”

In October, nuclear plant owners reached an agreement with the government to pay €23bn into a fund to decommission, process and package the nuclear waste from their operations. The government will bear the responsibility for storing the waste.