By Rainer Buergin and Brian Parkin
May 30 (Bloomberg) -- Germany moved closer to a plan to
become the biggest nation to exit nuclear power, with Chancellor
Angela Merkel’s coalition endorsing a shutdown of atomic plants
by 2022, capping her reversal on energy policy.
EON AG and RWE AG, the two biggest utilities, led declines
on the benchmark DAX stock index, with both dropping more than 2
percent and RWE slumping to its lowest since December 2004 as
the government retained a tax on spent fuel rods.
The decision in the early morning hours today by coalition
leaders in Berlin underscored Merkel’s flip-flop from a 2009 re-
election promise to extend the life of nuclear reactors. She did
her about-face after the March meltdown in Japan as the anti-
nuclear Green Party gained in polls. Her party lost control of
Baden-Wuerttemberg to the Greens in March and finished behind
them in a state election for the first time on May 22.
“As far as the government’s credibility is concerned, it
was about damage limitation,” said Bernhard Jeggle, a utility
analyst with Landesbank Baden Wuerttemberg in Stuttgart. “Those
people who wanted to exit nuclear probably voted Green in the
first place and will continue to choose the original rather than
Merkel’s copy.”
Germany’s BWE renewable energy federation said this year
its members were prepared to spend as much as 200 billion euros
($286 billion) by 2020 to develop wind and solar power. Merkel
wants to present five or six bills in Cabinet on June 6,
including a revamp of feed-in-tariffs for solar, wind and bio-
mass power, new building insulation targets and plans to build
new “smart” power grids.
Businesses and utilities opposed Merkel’s move, warning of
increased costs and less reliable power sources.
Nuclear Supply
Nuclear supplied some 22 percent of German power in 2010,
while renewable sources provided 17 percent, the Economy
Ministry said. Europe is split on the future of nuclear power,
with France and the U.K. planning more reactors while Germany
joined Switzerland in setting an exit date and Italy extended a
moratorium on plans to re-enter atomic energy.
Germany is Europe’s largest power market, followed by
France. Germany last year was a net exporter of power to France,
sending 16.1 terawatt hours to the country compared with imports
of 9.4 terawatt hours, according to data published by grid
operate Reseau de Transport d’Electricite.
“It’s hard to see how they will replace the energy,” Anne
Lauvergeon, chief executive officer of French state-owned Areva
SA, the world’s biggest maker of nuclear equipment, said on BFM
Radio. “I’m not sure there is enough Polish coal, and it creates
carbon problems. Alternative energy sources are intermittent
sources. I think they will do what Austria did in its time:
import nuclear electricity from neighboring countries.”
EON slumped as much as 2.5 percent to 19.52 euros and was
down 2.1 percent as of 9:20 a.m. local time in Frankfurt
trading, extending the stock’s decline to 15 percent this year.
Smaller rival RWE tumbled as much as 2.5 percent.
Fukushima Impact
Merkel in March said she sought to accelerate the shutdown
of Germany’s atomic power plants following Japan’s Fukushima
disaster, the worst nuclear crisis since 1986. The decision
reversed a 2010 plan to extend the operation of the facilities
by an average of 12 years.
“The seven oldest reactors that have been placed under a
moratorium and the Kruemmel nuclear power plant won’t go back
online,” Environment Minister Norbert Roettgen told reporters
following the coalition talks. “A second group of six nuclear
power plants will go offline at the end of 2021 at the latest
and the three most modern power plants will go offline 2022 at
the latest.”
Coalition divisions over the timing of a phase-out deepened
after the Greens finished ahead of Merkel’s Christian Democrats
in the state of Bremen May 22. Merkel said last week she’d await
results of an independent feasibility study on a quicker phase-
out, to be published today, before setting a date.
They will have to now even if they can't afford to. Probably burn some more fossil fuels to bridge the gap.
Political hoop jumping!