Released December 13, 2016 | GALWAY, IRELAND
en
Written by Martin Lynch, European News Editor for Industrial Info (Galway, Ireland)--A German High Court has ruled that the government must pay compensation to power companies that were affected by its decision to shut down all of the country's nuclear power plants in the wake of the Fukushima nuclear accident in 2011.
The Federal Constitutional Court in Karlsruhe found that although the government's decision to "phase out" nuclear power was legal, the companies had a right to compensation not provided for in the existing law.
The decision is seen as a win for the most affected companies including RWE AG (FWB:RWE) (Essen, Germany), E.ON (Dusseldorf, Germany), Energie Baden-Württemberg AG (EnBW) (FWB:EBK) (Karlsruhe, Germany) and Sweden's Vattenfall AB (Stockholm). As the operators of Germany's nuclear fleet, they were all negatively impacted by the government's decision to shut eight older plants immediately, with the remaining nine ordered to cease operations by 2022. For additional information, see May 30, 2011, article - Germany Votes to Dump Nuclear Power.
Collectively the companies have lost billions of euros in revenue over the past five years. E.ON, EnBW, Vattenfall, and RWE have all taken separate legal actions against the government in recent years to recoup an estimated £20 billion euro. For additional information, see June 15, 2012, article - E.ON Seeks 8 Billion from German Government and October 27, 2014, article - Vattenfall Sues Germany for Nuclear Losses.
In 2011, nuclear power accounted for around 20% of Germany's electricity.
"Based on the German government's long-term energy concept adopted in late 2010, which saw nuclear energy as a 'bridging technology,' E.ON had invested several hundred million euros to extend the service life of its nuclear power plants," E.ON stated. "The accelerated energy transition in the wake of the Fukushima accident in 2011 and the rapid nuclear phase-out had fully devalued these investments. However, there was to be no compensation. We welcome the ruling and are prepared to enter into constructive talks on the implementation of the court's decision."
"With today's decision by the highest German court, we have gained certainty for our company and its owners regarding a legal issue that is of fundamental importance for us," added RWE Power Chief Executive Officer Matthias Hartung. "RWE will now review the written grounds for the decision in detail and then decide how to proceed."
The government also welcomed the court's ruling. "I am very happy with the decision," said Federal Environment Minister Barbara Hendricks. "The Constitutional Court has confirmed that the law to exit nuclear power is essentially in accord with our constitution. The billions demanded by the companies are off the table today."
The four companies recently agreed to pay 23.6 billion euros ($26 billion) into a fund that will deal with the country's nuclear waste. It remains to be seen if the court's decision will be used to renegotiate a lower bill. For additional information, see November 12, 2016, article - Germany Agrees $26 Billion Nuclear Waste Fund.
Industrial Info Resources (IIR), with global headquarters in Sugar Land, Texas, five offices in North America and 10 international offices, is the leading provider of global market intelligence specializing in the industrial process, heavy manufacturing and energy markets. Our European headquarters are located in Galway, Ireland. Follow IIR Europe on: Facebook - Twitter - LinkedIn For more information on our European coverage send inquiries to info@industrialinfo.eu or visit us online at Industrial Info Europe.
The Federal Constitutional Court in Karlsruhe found that although the government's decision to "phase out" nuclear power was legal, the companies had a right to compensation not provided for in the existing law.
The decision is seen as a win for the most affected companies including RWE AG (FWB:RWE) (Essen, Germany), E.ON (Dusseldorf, Germany), Energie Baden-Württemberg AG (EnBW) (FWB:EBK) (Karlsruhe, Germany) and Sweden's Vattenfall AB (Stockholm). As the operators of Germany's nuclear fleet, they were all negatively impacted by the government's decision to shut eight older plants immediately, with the remaining nine ordered to cease operations by 2022. For additional information, see May 30, 2011, article - Germany Votes to Dump Nuclear Power.
Collectively the companies have lost billions of euros in revenue over the past five years. E.ON, EnBW, Vattenfall, and RWE have all taken separate legal actions against the government in recent years to recoup an estimated £20 billion euro. For additional information, see June 15, 2012, article - E.ON Seeks 8 Billion from German Government and October 27, 2014, article - Vattenfall Sues Germany for Nuclear Losses.
In 2011, nuclear power accounted for around 20% of Germany's electricity.
"Based on the German government's long-term energy concept adopted in late 2010, which saw nuclear energy as a 'bridging technology,' E.ON had invested several hundred million euros to extend the service life of its nuclear power plants," E.ON stated. "The accelerated energy transition in the wake of the Fukushima accident in 2011 and the rapid nuclear phase-out had fully devalued these investments. However, there was to be no compensation. We welcome the ruling and are prepared to enter into constructive talks on the implementation of the court's decision."
"With today's decision by the highest German court, we have gained certainty for our company and its owners regarding a legal issue that is of fundamental importance for us," added RWE Power Chief Executive Officer Matthias Hartung. "RWE will now review the written grounds for the decision in detail and then decide how to proceed."
The government also welcomed the court's ruling. "I am very happy with the decision," said Federal Environment Minister Barbara Hendricks. "The Constitutional Court has confirmed that the law to exit nuclear power is essentially in accord with our constitution. The billions demanded by the companies are off the table today."
The four companies recently agreed to pay 23.6 billion euros ($26 billion) into a fund that will deal with the country's nuclear waste. It remains to be seen if the court's decision will be used to renegotiate a lower bill. For additional information, see November 12, 2016, article - Germany Agrees $26 Billion Nuclear Waste Fund.
Industrial Info Resources (IIR), with global headquarters in Sugar Land, Texas, five offices in North America and 10 international offices, is the leading provider of global market intelligence specializing in the industrial process, heavy manufacturing and energy markets. Our European headquarters are located in Galway, Ireland. Follow IIR Europe on: Facebook - Twitter - LinkedIn For more information on our European coverage send inquiries to info@industrialinfo.eu or visit us online at Industrial Info Europe.
