Schröder retreats over nuclear shut down

7 February 1999

GERMANY The German Government has pulled back from its initial timetable to close down the country’s nuclear power industry. The first key issue is reprocessing contracts already agreed with BNFL and Cogema. Green Party environment minister Jürgen Trittin had said that Germany would not honour these contracts and both he and Chancellor Gerhard Schröder had said compensation would not be forthcoming.

However following a meeting with Germany’s nuclear utilities on 26 January, Schröder backed down, saying that reprocessing with the UK and French companies would continue until suitable alternatives had been found and the closure of Germany’s 19 nuclear reactors would proceed on a case by case basis. The meeting followed a decision by Schröder the previous day to delay legislation on nuclear phase out.

“We are pleased with Schröder’s decision and we think it is a solid basis for future talks,” said a spokesman from the Bayernwerk utility. “We are especially pleased that our arguments regarding the technical and legal impossibility of stopping reprocessing have been duly considered.” A number of German NPPs have only very limited storage space for spent fuel; were reprocessing to stop, electricity production would have to be halted shortly afterwards.

Compensation to BNFL and Cogema as well as the German utilities became the deciding factor in Schröder’s decision. Despite his and Trittin’s insistence that Germany could renege on the reprocessing contracts, worth £1.2 billion ($1.8 billion) to BNFL and Fr30 billion ($5.1 billion) to Cogema, without compensation because the contracts state that neither party need pay compensation due to an “act of restraint of government”, it was becoming increasingly clear that the diplomatic fallout could be very damaging.

Both UK Trade and Industry Secretary Stephen Byers and French Prime Minister Lionel Jospin had said they would pursue compensation vigorously and relations between Germany and its European partners could have been severely damaged.

Byers reacted positively to Schröder’s decision, saying: “I welcome today’s statement by Chancellor Schröder. We were always of the view, and made strong representations to the Germans, that the contracts were legally binding. We were also clear that cancellation would lead to a return to Germany of spent fuel presently being stored in the UK.” Within Germany the policy could also have backfired. A cancellation of the contracts would have led to both companies returning unreprocessed spent fuel, resulting in 100s of transports of nuclear material across Germany. In recent years there have been major protests against the transport of nuclear waste and conflict would have been likely.

The reprocessing contracts stipulate that an equivalent quantity of radioactivity must eventually be returned to Germany, but this would not happen for a number of years. Germany has no long-term facilities for storing spent fuel. As a result currently there is little alternative to reprocessing as a means of dealing with the material in the medium term.

The contracts with Cogema are for the reprocessing of 6132 tonnes of spent fuel, of which 4490 tonnes have been delivered and 3530 tonnes have been reprocessed, leaving 960 tonnes of unprocessed material in France and 1642 tonnes still to be delivered. The contacts with BNFL are for 1799 tonnes, of which 570 tonnes have been delivered and 60 tonnes have been reprocessed.

Were German nuclear plants to close early, the utilities would also demand compensation from the Government. The implications for Schröder’s wider aims of job creation could be serious. A possible compromise deal could involve German companies cancelling their reprocessing contracts and paying compensation or offsetting the loss of revenue to BNFL and Cogema by offering new contracts to address the problem of final storage of nuclear waste. BNFL in particular has been developing expertise in this area. The government would then offer the utilities a longer timeframe for shutting down reactors and favourable tax arrangements on the Dm20 billion ($11.9 billion) reserves the utilities have built up to address decommissioning.

The greatest difficulty for Schröder is likely to be carrying his Green Party coalition partners. The German Greens emerged from the anti-nuclear movement and are committed to as rapid a closure as possible. Trittin has talked of a future energy ‘mix’ in which improved efficiencies, conservation measures and an increase in renewable sources make up the short fall of 37% in German energy production which is accounted for by nuclear energy.

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