Lawsuit promised over 'nine-digit' nuclear tax

18 July 2011

The utility EnBW has announced that it will sue the German government over its unique nuclear fuel tax, while another nuclear utility is talking with Gazprom as a strategic partner for new power plants. 


Philippsburg (Image: EnBW)
Phillipsburg: Refuelling the single reactor in operation has cost EnBW over €100 million extra thanks to a nuclear tax
EnBW said that it has now completed its tax return and filed it with the proper authorities. Having refuelled the 1392 MWe Phillipsburg 2 reactor, calculations show the tax on nuclear fuel rods will cost it "a nine-digit figure every year" - over €100 million ($140 million).


"Having reviewed the matter in detail and considered it extensively, EnKK [the firm's subsidiary responsible for nuclear operation] has now reached the conclusion that it is time to take legal action. This decision was based on both constitutional law and European law considerations."


The company says the tax of €145 ($203) on every gram of uranium or plutonium fuel goes against the explicit wording of the 2001 'energy consensus' that brought in the phase-out of nuclear power. "The federal government had undertaken with regard to the nuclear operators not to take any unilateral measures against nuclear power," said EnBW, noting this applies to tax law.


"Besides these constitutional law aspects of unlawful invasion of property rights and freedom of occupation, EnBW further has serious doubts as to the compliance of the act with European law, as it is not based on either the Excise Directive or the Energy Tax Directive."


Power prices

According to the latest EU figures (from April), Germany has the second highest prices for domestic electricity, at €0.2588 per kWh.

Only Denmark has more expensive power, at €0.2864, while in third position comes Austria at €0.2029 per kWh.

The average across the EU's 27 member states is €0.1688 per kWh.

Observers eagerly await events as nuclear generators EnBW, EOn and RWE, as well as Vattenfall - owned by the Swedish state - take aim on Chancellor Angela Merkel's hasty new nuclear policy. She was elected with a mandate to amend the 2001 phase-out rules and allow nuclear reactors over 12 years more operation, with the nuclear tax a negotiated part of the deal. This was approved by the Bundestag, but the Fukushima accident saw Merkel simply reverse the new deal - nevertheless keeping the tax.


Another legal issue stems from the order to shut down eight older reactors, which effectively robbed the operators of the generation allowances they had been allocated. These eight units account for about 10% of German power production with a market value of over €1.0-2.6 billion ($1.4-$3.6 billion) per year. Vattenfall has already said that the sudden shutdown of the Brunsbüttel and Krummel nuclear power plants would impact its yearly results by SEK10 billion ($1.5 billion).


Gas a strategic imperative 


Having lost the Biblis-B nuclear power plant to the shutdown order, and with 'life extensions' for its Gundremmingen and Emsland plants cancelled, the utility RWE has turned to Gazprom as a strategic partner.


The Russian state gas export firm completed a memorandum of understanding with RWE last week for three months of  negotiations on a possible joint venture to build gas-fired power plants to serve Belgium, Germany, Luxembourg and the UK.


"The power industry is one of the priorities of Gazprom in Europe," said the firm's CEO, Alexey Miller. "In light of recent decisions by the German government to reduce their nuclear power programs, we see good prospects for the construction of new modern gas-fired power plants in Germany."


Researched and written
by World Nuclear News