German govt decides amended nuclear law, settles disputes with plant operators

Germany’s government cabinet today approved an amendment to the Nuclear Energy Act which provides for financial compensation to nuclear power plant operators due to the country’s phase-out decision of 2011. Plant operators will be compensated with a total of 2.4 billion euros for the amount of electricity they couldn’t sell and devalued investments, government ministries had announced earlier this month.

An amendment of the existing compensation rules was necessary after Germany’s highest court ruled in November 2020 that the compensation clauses in the nuclear exit law are unconstitutional. While the ruling left the general nuclear phase-out decision and timetable untouched, it forced the government to revisit the law again. Now the government also announced that it had agreed with energy companies EnBW, E.ON/PreussenElektra, RWE and Vattenfall to set the actual amounts of compensation and in return have the companies settle all related legal disputes.

Environment minister Svenja Schulze, whose ministry drafted the amendment said in a press release: “It is good that we are now finally drawing a line under the protracted legal disputes. This is happening at a price that is significantly lower than the energy suppliers' original demands."

Germany will pay compensation totalling about 2.428 billion euros. Vattenfall will receive 1.425 billion euros, RWE 880 million euros, EnBW 80 million euros and E.ON/PreussenElektra 42.5 million euros. The compensation is granted primarily for electricity volumes that cannot be used in the group's own nuclear power plants (RWE and Vattenfall) - a total of about 2.3 billion euros - and for devalued investments in the lifetime extension withdrawn by the German Bundestag (EnBW, E.ON/PreussenElektra and RWE).

Germany’s accelerated nuclear exit was passed by a large majority in parliament in 2011. The last nuclear reactor will go offline at the end of 2022.

Minister Svenja Schulze said that, with the accelerated nuclear phase-out, Germany has created “predictability and reliability on the energy market and cleared the way for electricity from wind and sun”. Johannes Teyssen, CEO of German energy company E.ON, told business daily Handelsblatt that days of nuclear energy are numbered, as no business-oriented company will invest in it. “If nuclear power plants are still being built anywhere, it will be by state-owned companies or with massive state support,” he said, and added it is “too expensive, too risky and too politically explosive”. Teyssen also said he was sceptical of plans for small nuclear power units.