EnBW to Fight German Nuclear Tax

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Written by Martin Lynch, European News Editor for Industrial Info (Galway, Ireland)--German energy company Energie Baden-Württemberg AG (EnBW) (Karlsruhe, Germany) has announced that it intends to take legal action against the government's controversial nuclear fuel rod tax.

The company, one of Germany's four nuclear power plant operators, claimed that the tax will cost it more than €100 million ($141.8 million) each year. EnBW now joins fellow plant operators E.ON AG (OTC:EONGY) (Dusseldorf, Germany) and RWE AG (OTC:RWEOY) (Essen, Germany), in its plans for legal action. Last month, E.ON denounced the government's plan to keep seeking its fuel-rod tax despite shutting eight of the oldest plants. Both E.ON and RWE will be seeking billions of euro in compensation for lost revenue due to the closures.

EnBW's action follows the submission of its tax returns with the tax authorities following the refuelling of Unit 2 of the Philipsburg nuclear power plant. It found that the installation of new fuel rods meant the company would have to pay more than €100 million a year under the nuclear fuel rod tax.

"We want to uphold our ambitious plans to expand in the field of renewable energies," said Hans-Peter Villis, EnBW's CEO. "The implementation of these plans will, however, also depend on our having the necessary available funds. The nuclear fuel rod tax will cost EnBW a nine-digit figure every year. If we put that amount towards expanding renewable energies, we could take an additional step forward."

Before the Fukushima Daiichi nuclear plant disaster in March, Germany had agreed to extend the lives of its older nuclear plants in return for large financial payments to be paid by the energy companies to the government, under the so-called 'nuclear fuel rod tax.' Following Fukushima, the government shut down the eight oldest nuclear power plants for three months, but in May, it pulled a complete U-turn on nuclear power by announcing all plants would be closed down by 2022. For additional information, see May 30, 2011, article - Germany Votes to Dump Nuclear Power.

Nuclear power plant owners are expected to challenge the legality of that decision but have also taken exception to the fact that the fuel-rod tax remains in place despite the closure of the older nuclear power plants.

"In recent months EnBW had repeatedly made clear that it has serious doubts as to the legal validity of the nuclear fuel rod tax and reserved the right to take legal action," EnBW said in its statement. "Having reviewed the matter in detail and considered it intensively, EnKK [EnBW's nuclear division] has now reached the conclusion that it is time to take legal action. This decision was made based on both constitutional law and European law considerations."

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