In the media: Utility shares slump; criticism of coal plant export financing

Süddeutsche Zeitung

“Why shares of E.ON and RWE are in freefall”

Utilities’ provisions for the nuclear clean-up will mainly be needed in the decades to come, so interest-rate assumptions are absolutely crucial to estimating their final value, explains Markus Balser and Michael Bauchmüller in Süddeutsche Zeitung. “It is these interest rates that have now become a bone of contention, driving managers onto barricades and share prices into freefall.”
The accountants who conducted a recent government stress-test of utility provisions used far more conservative assumptions than the utilities themselves, according to the authors. This is why some of their calculations resulted in a potential multi-billion-euro gap. “Even suspicions about possible interest rate scenarios are enough to spread terror in executive suites.” Balser und Bauchmüller argue these doubts about interest rates could make a public fund for nuclear assets more probable.
On Tuesday, E.ON and RWE shares had dropped up to 13 percent in reaction to unsourced press reports about possible shortfalls in the provisions. Energy minister Sigmar Gabriel said in a statement there were no results of the stress test yet. He called the press reports “irresponsible speculation”.  But the shares continued their descent on Wednesday morning, each falling around five percent.

Read the article in German here.

Read the Factsheet “Securing utility payments for the nuclear clean-up” here.

Find the Factsheet about “Nuclear clean-up costs” here.

Read the Factsheet “Legal disputes over the nuclear phase-out” here.

Find the Factsheet “What to do with the nuclear waste – the storage question” here.

Read a dossier on the utilities struggle to cope with the Energiewende here.

 Frankfurter Allgemeine Zeitung

“Bank-Euro-Atom”

Taxpayers had to foot the bill for saving the banks and the euro, and now it seems possible they will also end up paying for the nuclear clean-up, while the handsome profits from nuclear power were privatised, writes Holger Steltzner in a commentary for the Frankfurter Allgemeine Zeitung. He says it might really be the case that the utilities’ provisions are 30 billion euros short of still-unknown final clean-up costs, and their reserves are locked up in assets that have lost value. “Therefore, the utilities will have to pay for the nuclear phase-out from their operating profits. This will be difficult, because politicians have destroyed their business model,” he says. Steltzner argues it is possible that the nuclear assets will be transferred into a public nuclear fund, while the utilities drop their lawsuits related to the phase-out in exchange.

taz – die tageszeitung

“Having a heart for coal plant builders”

In theory, Germany wants to stop dangerous climate change and advertise the energy transition around the world – but in practice, other interests are more important, writes Malte Kreutzfeldt for the taz. The Organisation for Economic Co-operation and Development (OECD) is currently negotiating tougher conditions for coal plant export loans but resistance from Germany and other EU countries like Poland will likely end up watering down the rules, Kreutzfeld reports. Instead of making carbon capture and storage (CCS) technology a condition for coal power plant export financing, the power stations may now not even have to be CCS-ready. While the German environment ministry supported tougher rules for coal technology export financing, the Ministry for Economic Affairs and Energy didn’t, Kreutzfeld explains.

Handelsblatt Online

“Bosch wants to force breakthrough in car batteries”

German car component supplier Bosch is buying California start-up Seeo in order to obtain their know-how on solid-state Li-ion batteries, writes Martin-W. Buchenau from the International Motor Show Cars (IAA) in Frankfurt. The company wants to bring battery technology competence back to Germany and produce car batteries that increase the range and reduce costs in the next five years, Buchenau says.

Read the article in German here.

Frankfurter Allgemeine Zeitung

“Lower greenhouse gas emissions despite a growing economy”

Germany is the only industrialised nation which despite a growing economy is consuming less power and cutting greenhouse gas emissions, German development bank KfW says. Energy productivity has increased by 6.7 percent last year, KfW chief economist Jörg Zeuner told Tim Kanning of the Frankfurter Allgemeine Zeitung. Reasons were a wider deployment of renewable power sources, but also increasing investment in energy efficiency measures.

Deutschlandfunk

“The energy transition could be cheaper”

The energy transition from conventional to renewable power could be more affordable for consumers if the focus were on solar power and onshore wind turbines, Nils Schnoor, energy expert at the Federation of German Consumer Organisations (VZBV) said in an interview with Deutschlandfunk radio. Costs are rising because the government has decided to invest in expensive offshore wind energy, he said. Consumers will face additional costs when a lignite power capacity reserve is established, Schnoor added.

Read the interview in German here.

See a CLEW factsheet on power prices for consumers here.

Ernst & Young

“Policy changes shake up renewable energy country attractiveness”

Consultancy Ernst & Young (EY) has published its latest Renewable Energy Country Attractiveness Index (RECAI), ranking 40 countries on their attractiveness for renewables investment and deployment opportunities, based on energy market and technology indicators. While the US replaced China at the top of the list because of President Obama’s Clean Power Plan, the UK fell out of the top ten for the first time in 12 years because the government has removed support for onshore wind and solar projects. Germany was overtaken by India and is now fourth on the list due to a slowdown in capacity development and a new auction scheme that has raised fears smaller developers would be squeezed out, the report says. Germany still remains “the jewel in Europe’s renewable energy crown, enjoying a relatively high degree of government support and policy stability”, the report also says.

Download the EY report in English here.

See a CLEW article on the development of a renewable auction scheme in Germany here.

Handelsblatt

“Blow up, fell or sell second-hand”

Across Germany, there are now more than 25,000 wind turbines, reports Franz Hubik from the wind trade fair in Husum. This also means a rapidly rising number will need upgrading or replacing in the coming years. But taking down old windmills is complex and costly. Still, many parts can be resold in Poland, Italy or Russia, writes Hubik.

Read the article in German here.

Handelsblatt

“The idea alone is not enough”

A look at Germany’s dwindling share of world-wide patents for renewable energy technology, a mere 15 percent in 2014, suggests the country is in decline in terms of innovation, writes Lisa Hegemann in Handelsblatt. But absolute numbers paint a different picture: The number of patents has quadrupled from 2005 to about 1600 in 2014. The reason for Germany's dwindling share is simply that many other countries have joined the competition, including the US, Japan, South Korea and China.