German utilities set to profit from nuclear extension

8 June 2005

With the nuclear phase out currently underway in Germany set to be reversed with up coming federal elections, power utilities are likely to reap a huge profit boost, says a new report from market research company Trend Research.

The conservative Christian Democratic Party, likely winners in the September poll, has pledged to reverse the nuclear consensus, extending the lifespan of the country's nuclear power plants.

As a result, energy giants like E.On could reap billions of euros in additional profits while simultaneously saving massively on investments for replacement power.

With the last reactor due to close in 2021, generators argue that the plants could work for around 50 years. An extension in the average running time of 32 to 40 years could cut the investment requirements €8–27 billion. According to Trend, if the consensus remains intact, around 57 large power plants would be required. With an additional eight years of nuclear generation this figure would fall to 45 new plants.

Private bank Sal. Oppenheim has reportedly calculated that an extension to reactor running time of 45 years would yield €4.6 billion for E.On and €3.4 billion for RWE given the lower operating costs of nuclear plants. Share prices for the large nuclear utilities has already risen since the election was announced.

  • Meanwhile, the Swedish conservative opposition parties Modaraterna and Folkepartiet have also announced plans to reverse the nuclear shutdown programme. The Folkepartiet party would not only restart the recently shut down Barsebäck but would also advocate developing more reactors.

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