Exclusive Government Approves Fund to Pay for Nuclear Waste Storage, Keep E.ON, RWE, Others Liable for Wind-Down Costs

The German government on Wednesday approved a funding plan to store nuclear waste, which will force utilities E.ON, RWE, EnBW and Vattenfall to transfer at least €17.2 billion, or $19.2 billion, to the state and keep them liable for winding down atomic power plants. In April, a commission set up by the government proposed measures to guarantee the funding of the country’s phase-out of nuclear power plants. All Germany’s nuclear power plants will be taken off the grid by 2022 at the latest, but winding down operations and disposing of the waste will take decades, if not far longer. “The government wants to implement the commission’s recommendations and thereby secure the phase-out of nuclear power,” Germany’s Economics Ministry said in a statement. Shares in E.ON and RWE were down more than 3 percent by 4.00 p.m. in Frankfurt, while EnBW’s stock was down 1.2 percent. Vattenfall, which is Germany’s third-largest energy producer, is fully owned by the Swedish state and is not listed. The question of how to pay for Germany’s exit from nuclear energy has been a contentious issue since 2011. Germany’s Chancellor Angela Merkel, in the wake of the Fukushima nuclear disaster in Japan, shifted energy policy to renewables and decided to shutter all of Germany’s nuclear power plants by 2022. The ministry said Wednesday it would turn the commission’s proposals into law, creating a public fund to which the utilities have to contribute €17.2 billion to free them from liabilities associated with storing nuclear waste. If they contribute a further €6.1 billion, the utilities would be freed from any additional costs and interest rate risks related to storing the waste. The companies, however, will remain responsible for tearing down the plants and sealing nuclear waste in containers. The law will include clauses that means utilities remain liable even they have spun off nuclear assets. Picture source: Bloomberg