Germany’s Merkel praises deal to extend operations for country’s 17 nuclear power plants

Germany’s Merkel praises extending nuclear energy

BERLIN — Chancellor Angela Merkel on Monday touted her government’s decision to put off shutdown of the country’s nuclear power plants by an average 12 years as “revolution of the energy supply” in Europe’s largest economy.

But the agreement drew sharp criticism from opposition parties and environmental groups, who said it increased the risk of a plant accident and undermined the push for more renewable energy.

The agreement — which still needs parliamentary approval — is the latest sign of a renewed appetite for nuclear energy in Europe despite controversy over the subject since the 1986 Chernobyl disaster.

Merkel’s government has cast the deal as a way to keep energy cheap until more renewable energy is available. Existing coal-fired plants raise concerns about emissions of the greenhouse gases believed to cause global warming, while renewables such as wind remain more expensive than coal or nuclear and for the moment provide only a small part of the country’s needs.

The government’s finances, hard hit by the recession and financial crisis, also will benefit from keeping the nuclear plants running longer, through a new levy on utility companies, which is part of its wider package of austerity measures and new taxes aimed at saving euro80 billion ($100 billion) through 2014.

The deal struck late Sunday by Merkel, several ministers and key leaders of her center-right coalition government following months of wrangling overturns a decision by a previous government in 2000 to shut down all of Germany’s nuclear plants by 2021.

The deal — struck when the environmentalist Greens were part of the governing coalition — was popular among many still wary of atomic energy since the 1986 explosion and fire at the Soviet-built nuclear power plant in Ukraine that spread a radioactive cloud over Europe.

Opposition parties immediately vowed to try to block the extension in the courts, claiming that the government caved to utility industry pressure.

Greenpeace suggested that Germany did not need the extension and that it could end up setting back the country’s drive to expand its renewable energy supply.

“Only several large corporations would benefit form it with massively increased profits,” spokesman Jan Beranek said. “The rest of society would badly lose.”

The deal was controversial even within Merkel’s government, with disagreements among top ministers over how long the extensions should be.

Merkel on Monday told reporters in Berlin the decision puts Germany on track to secure the “most efficient and environmental friendly energy supply worldwide”.

The agreement foresees that the country’s 17 existing nuclear power plants will remain online for 12 more years on average beyond 2021, with plants built before 1980 getting an extra eight years and more recent ones 14 additional years, the government said. No new plants will be built.

In return for the expected additional profits, utility companies will have to pay an annual fuel tax expected to bring in euro2.3 billion ($3 billion) annually starting next year, and will have to contribute to a special fund to boost renewable energies.

The government did not specify how much the fund for renewable energies was meant to raise from the four nuclear power utilities — E.ON AG, RWE AG, EnBW AG and Germany’s subsidiary of Sweden’s Vattenfall Europe.

The Federation of German Industries said the agreement would keep utility bills low and help secure the country’s competitiveness as a place to do business, managing director Werner Schnappauf said.

But the main opposition parties, the Social Democrats and the Greens cited safety risks and the need to switch to renewable energies.

Opposition leader Sigmar Gabriel said the agreement marked “a black day for Germany’s energy policy,” German news agency dapd quoted the Social Democrat as saying.

The party’s deputy leader Andrea Nahles said: “They are selling safety for money.”

The opposition has said it would ask the country’s constitutional court to decide on whether the deal needs parliamentary approval from both houses or parliament.

Merkel says the measure only has to be approved by the Bundestag lower house, where her government holds a majority. But the opposition says the upper house representing the federal states — where Merkel recently lost her majority — has to approve the measure as well.

Investors cheered the shift in Germany’s energy policy and sent the two listed utility companies higher to lead the country’s blue chip index Dax’s afternoon trading, with E.ON and RWE both rising by 2 percent, to euro22.93 and euro54.29 respectively.

The nuclear agreement underscores a shift in energy politics in Europe.

Swedish lawmakers in June narrowly approved replacing aging nuclear plants with new ones and Italian Premier Silvio Berlusconi has made constructing reactors one of his government’s goals.

Swedes voted in a 1980 referendum to gradually phase out the use of nuclear power, and Italians rejected nuclear power in a 1987 referendum following the Chernobyl disaster.

Berlusconi’s quest on Sunday got new support with a study led by the chief economist of the Paris-based International Energy Agency, Fatih Birol, which recommended the country build nuclear reactors.