Ruling: Germany must pay utilities over nuclear phase-out

Germany‘s constitutional court has ruled that the country’s government must compensate utilities for the decision to phase out nuclear power entirely by 2022.

While it’s a welcome development for E.ON, RWE and Vattenfall, the government noted that there are limitations on what damages the utilities can seek. On that basis, Barbara Hendricks, the environment minister preferred to see the result as a positive, saying, “the billion-euro claims from the companies are off the table as of today. The timeline for the nuclear phase-out won’t be changed.”

The companies were looking for around $21.3bn in compensation for the 2011 decision to shut down nuclear, following the Fukushima incident in Japan. Initially they agreed to an extended lifespan before changing direction and ordering complete phase out by 2022.
Angela Merkel and Barbara Hendricks
The government will have to reimburse the companies for foregone profits from the sale of power at some plants and for investments the companies had made based on the original outlook for nuclear power, which in E. ON’s case alone amounted to “several hundred million euros.”

Germany’s lower house of parliament, the Bundestag, will have until the end of June 2018 to come up with a compensation plan.

The decision has indirectly led to a scenario whereby, with nuclear gone, coal is relied upon to work alongside renewables in providing a secure energy system. It’s resulted in bad emissions performance and the highest household energy bills in the Eurozone.

With the court’s decision “the nuclear phase-out is becoming even more expensive for the general public than we thought,” said Claudia Kemfert, an energy economist with the German Institute for Economic Research in Berlin told the Wall Street Journal.

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