Financial demands before German nuclear operators
31 August 2010
In addition to the introduction of a new €2.3 billion ($2.9 billion) annual windfall tax, the German government has now demanded nuclear firms pay a contribution towards the development of renewable energy.
A number of measures expected to be brought in during September are likely to see the introduction of a tax on nuclear fuel that will help shore up German finances in return for allowing nuclear operators to continue their businesses. This could come at the same time as austerity measures, when additional billions in tax from nuclear firms would be particularly welcome. The German cabinet has already met and approved the nuclear fuel tax, so this is now to go before parliament.
Chancellor Angela Merkel, who spoke on German TV station NDR last week while going on an 'energy tour' around the country, said the new tax should be considered not as a levy, but as a contribution to the development of the country's renewable energy industry.
The tax proposal, first made at the end of the spring, will mainly impact Germany's four biggest companies RWE, EOn, Energie BadenWuerttemberg (EnBW) and Vattenfall Europe. These companies have already said that that they are ready to share some of their estimated combined annual profit of €6.4 billion ($8.1 billion) for investment in renewable energy, but oppose the introduction of a fuel tax. Instead, the companies have suggested the creation of a fund through which to finance renewable energy.
The tax has met the strongest opposition by the above four companies, but the for the time being the German government as well as environment minister Norbert Roettgen continue to insist that both levies should be implemented. However, the four firms, which produce 70% of Germany's power, have even threatened to close the remaining 17 reactors in the country if the fuel tax proposal is not dropped.
"There are already 40 partners involved in campaigning against additional levies on the nuclear operators, including EOn, RWE and Deutsche Bank," said Ivo Banek of Vattenfall Europe. "Vattenfall holds a 7% share of the German energy market, but the key thing is that we expect the government to hear our arguments and act accordingly."
The government is getting together to discuss the potential levy on 1 September. How the tax funds should be distributed remains a political matter which will be further discussed in the Bundestag (parliament), but it seems that the key to these discussions will remain Merkel's pre-election promise to promote renewable energy.
Merkel wants a Germany powered entirely by renewables, but accepts that nuclear and coal will continue to take a role until this is possible. Renewables are thought to be capable of meeting half of power demand by 2050, so that supporting role would seem to continue for quite some time.
While nuclear will be presented as a 'bridging technology', Merkel will propose to extend average reactor lifespans by four, 12, 20 or 28 years. The levies on fuel or to promote renewables will be embedded in the legislation to enable the changes to the phase-out.
In addition to the industrys co-ordinated protest against the fuel tax and an extra tax for the development of renewables, the German Chancellor will also need to deal with vocal opposition among some segments of the public to the continuation of nuclear power.
Germany has a reputation for successfully introducing austerity measures, but at the moment the German nuclear industry seems to have found a good platform for discussing the options before the very final decisions on new levies are taken.
By Rumyana Vakarelska
for World Nuclear News