FRANKFURT (Reuters) – Germany’s nuclear power industry is no closer to knowing how long its plants may operate than five months ago when Chancellor Angela Merkel’s new government assumed power and promised to extend their lives.
Rifts inside her center-right cabinet over the merit of rivalling renewables energies and a local election potentially threatening her party’s leadership of a key state have delayed steps to free the 17 reactors from closure in the coming decade.
But analysts say having expected and priced in closures for as long as the 10-year old exit deal, the industry must keep its nerve and focus on the benefits from any leeway given.
“Operators will be fairly pragmatic about the affair, realizing that the lack of progress on politicians’ part makes the case for generous life extensions that much stronger for them,” said Lawrence Pooole of IHS Global Insight.
“Under such a scenario, operators could however find themselves paying a heftier share of revenue to the government for the additional generation these facilities will provide,” he said, adding there could also be tough maintenance conditions.
Even if operators must upgrade plants and share additional profits, they may still stand to earn billions of euros a year if largely written off plants produce longer than envisioned in the exit deal that wants plants to stop after an average 32 years of age.
That is why anti-nuclear groups such as “Ausgestrahlt,” which means “enough radiation,” vow to stage powerful protests.
“Our aim is not just to block life extensions,” said its spokesman Jochen Stay, meaning demands for a total stop in 2021.
TREADING CAREFULLY
Having lived with public protests over safety and unresolved waste issues since its inception in the 1970s, the industry knows it should not bully the government as it could backfire.
“We would find that inappropriate,” said RWE CEO Juergen Grossmann at a news briefing last week.
The big four nuclear operators RWE, E.ON, EnBW and Vattenfall Europe have been docile so far and instead displayed a lot of creativity behind the scenes.
EnBW directly tackled the scheduled phase-out of its Neckarwestheim 1 plant this year by announcing it will cut the block’s load by two thirds to avoid closure.
RWE, whose Biblis A reactor is also due to shut this year if it does not receive an injection of fresh production quotas, could be rescued under various scenarios.
A court must decide whether it may borrow quotas from RWE’s younger Lingen plant to tide it over, but there is no date.
Alternatively, E.ON may lend RWE and EnBW quotas from its Stade plant, closed in 2002, in a move which would be legitimate and easy to implement but observers say would not come cheaply.
Vattenfall Europe’s two northern German nuclear plants escape immediate closure threats due to embarrassing and costly shutdowns after safety glitches.
Politicians are poles apart on how many years to add to the plants’ lives beyond 32 years. Between 8 and 20 years are suggested. Plants in other countries can run up to 60 years.
Industry executives at a conference this week said they were braced for tough and costly conditions to be tied to a deal but to remain profitable would argue the likely impact on prices.
They would study hard whether it was worth spending large sums on necessary plant upgrades and share profits to support renewables, as they were free to invest in those by other means.
But there was a new drive to unblock a decade-old debate about a final waste repository and to try and tackle the PR war, said Ralf Gueldner, deputy chairman of E.ON’s Kernkraft unit.
“We can get somewhere with the help of multiplicators,” he said. “The industry has become more transparent.”
An overall national energy plan, in which a nuclear deal will be embedded, is due to be signed in October but an earlier interim report will become available in mid-May.