German utilities under pressure due to NPP closures

12 April 2016

A regional court in Bonn has rejected German utility EnBW's claim for damages arising from Germany's phase out of nuclear power. The court said on 7 April that EnBW had not used immediately "all legal means available" to avert the consequences of the forced shut down of its nuclear power units and its claim could not be allowed to stand.

In the wake of the 2011 Fukushima Daiichi accident in Japan, the German government ordered the three-month shutdown of the country's oldest reactors including EnBW's Neckarwestheim 1 and Phillipsburg 1 units in the state of Baden-Würrtemberg. A few months later the government changed the temporary moratorium into a permanent shutdown.

EnBW had sought compensation of €261m ($296m), citing German court decisions in 2013 and 2014 in favour of rival utility RWE, which had sued for damages of €235m against the forced closure of its Biblis reactor immediately after the moratorium. However, court deputy spokesman Bastian Sczech said that, although EnBW had questioned the legality of the moratorium in an April 2011 statement, it had added in the same statement that it would not be seeking legal redress.

Germany's biggest utility, E.ON, is also seeking damages, of €380m. E.ON also made its claim in 2014, three years after the moratorium. EnBW announced on 24 December 2014 that it would sue its 46% owner, the state of Baden-Württemberg, as well as the German federal government, over the 'unlawful' shutdown of its reactors. The court said EnBW may appeal against the decision within a month.

Meanwhile, a government-appointed commission co-chaired by Green ex-environment minister Juergen Trittin has warned utilities that delaying a deal to secure the funds needed to pay for closing down Germany's NPPs would be the "worst case", Reuters reported. Germany's last nuclear plant is due to be shut down by 2022 and there are concerns that the €39bn so far set aside in provisions by the four biggest utilities (E.ON , RWE, EnBW and Vattenfall) will not be enough to cover the costs.

The commission is trying to decide how to apportion the costs for the decommissioning of plants and the storage of nuclear waste. It was originally scheduled to present proposals on how to secure the funding by the end of February, but the complexity of the task has delayed talks. "If we don't start working on a law this year I don't expect we'll get another chance before 2018 or 2019," Trittin said on 6 April. "All analysts agree that this would be the worst case with regard to the companies."

A solution is expected to see the utilities paying existing provisions made for the interim and final storage of nuclear waste into a government-controlled fund. But uncertainty remains on various issues, including whether additional payments will need to be made to release the utilities from further liabilities on the storage costs. "Bargaining positions are still far apart," Trittin said.

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