German state vote may block nuclear life extensions

Tuesday, May 11, 2010

FRANKFURT, May 10 (Reuters) - Chancellor Angela Merkel's centre-right coalition may have trouble pushing through planned nuclear lifetime extensions after a German regional election on Sunday went awry for the government.

North Rhine-Westphalia, Germany's most populous state, left Merkel's Christian Democrats (CDU) and their Free Democrat (FDP) allies short of their previous state majority, leaving the make-up of the next government unclear.

Many voters who punished the Berlin government for agreeing to aid Greece and for a local party sponsorship scandal are also critical of Merkel's plans to reverse a nuclear exit programme.

Merkel, whose coalition has a majority in parliament's Bundestag lower house, could now be blocked on many issues in the Bundesrat upper house, which represents the states.

"The nuclear extension has become politically more difficult because the majority in the Bundesrat has been lost," said Theo Kitz, analyst at Merck Finck.

Utility shares lagged a broad market rally.

Utilities have hoped to be able to run the country's 17 remaining reactors longer than the agreed 32 years. But they also have scenarios in place to close them as planned.

This is not least because even the conservative Environment Minister Norbert Roettgen has signalled he favours renewables and he would be stingy on the extensions, both in length of years and in terms of splitting additional revenues between private and public-sector stakeholders.

Utility RWE on Sunday struck a deal with peer E.ON to buy production quotas from an idled E.ON reactor, giving lifeblood to its ageing Biblis A nuclear plant which otherwise would have needed to close this year.

If the nuclear life extension plan can go ahead without needing approval by the Bundesrat, Merkel's government could in theory ignore the North Rhine-Westphalia result and grant longer life cycles for the reactors.

But a panel of legal experts advising the Bundestag said the upper house has to approve any agreement to extend the lifetime of nuclear plants. Opponents to this view say the original nuclear exodus law did not need Bundesrat approval.

It was a mistake that the cabinet failed to put in place clarification on this ahead of the regional election, which could have insulated it from fall-out, said another analyst.

It will also be hemmed in by the individual state's nuclear supervisory authorities, which might differ from its course.


If there was a grand coalition of the Conservatives and Social Democrats (SPD), the SPD would stick to the nuclear exodus as it drew it up 10 years ago with its junior partners, the Greens Party and industry, as a prestige object.

The conservatives might salvage extensions in other states.

If the SPD form a coalition with the ultra-left party The Left -- which wants to disempower utilities -- and Greens, who want to move away from fossil fuels, it would have trouble maintaining coal- and nuclear-biased energies.

This could anger its blue-collar electorate.

Posted in |