Large German energy companies are the focus of a new draft law, in which they are obligated to bear the costs of decommissioning nuclear power plants and disposing of nuclear waste. EURACTIV Germany reports.
Sigmar Gabriel (SPD), Germany’s Minister for Economic Affairs and Energy, does not want to relieve big energy companies from their responsibility for paying for the nuclear phase-out, which will run into billions of euros.
His ministry hopes to push forward a draft law that will bypass any company restructuring. Instead, the providers should adhere to the principle that “parents owe it to their children” to complete the demolition of their nuclear power plants and the storage of nuclear waste, according to a bill submitted on Wednesday (2 September). The legislation will now be examined by Angela Merkel’s cabinet.
E.ON wants to spin-off some of its nuclear power plants in the coming year. The company has already threatened legal action against the proposed law. RWE wants to legally examine the plan.
According to the Ministry for Economic Affairs, consultations between government departments have now been completed. The framework should close a legal loophole, because the “current legal situation provides only limited protection,” according to the paper.
Under the current system, parent companies only remain liable for a spun-off company for a period of five years, meaning the energy giants could be let off the hook. Therefore, the goal of the draft law is “to ensure long-term energy company liability for nuclear waste disposal and thereby reduce the risk to the public budget.”
The revised law aims to ensure that companies use their entire assets, or pay or the multi-billion euro disposal costs, even in the case of divestiture. This has been proposed in order that the parent company’s liability lasts until the long process of nuclear phase-out is complete. Should the law be passed, then a company will not be exempt, even if it hands majority control over to a subsidiary.
The four largest German energy companies and nuclear power plant operators, E.ON, RWE, Vattenfall and EnBW are reeling from the German government’s policy of promoting renewables over traditional power sources. The firms have set aside over €38 million for nuclear power plant demolition and nuclear waste storage, much of which will remain radioactive for thousands of years. Politicians have continuing doubts over whether this sum is sufficient, though.
E.ON has announced a restructuring for 2016, in which CEO Johannes Teyssen sought to spin-off its nuclear, coal and gas plants into a new company, under the name of “Uniper”. Uniper would also take over E.ON’s nuclear liability, which would amount to over €16 billion.
E.ON threatens legal action
The Düsseldorf-based energy provider has strongly criticised the planned revision to the law. Management commented that the plan is “unconstitutional.” This is in relation to the proposed unlimited cost-liability. Should it get the go ahead, E.ON “would likely have to take legal action”. An RWE-spokesperson said that they will need to examine the draft law in full.
After the announcement, share prices dropped. E.ON experienced a decline of 1.2% and RWE dropped by 1.6%.