By Nicholas Comfort and Brian Parkin
May 10 -- E.ON AG and RWE AG, Germany’s largest utilities, may not get to run their nuclear plants past scheduled shutdown dates after Chancellor Angela Merkel’s party lost control of parliament’s upper house in a state election.
The pro-nuclear leader of the Christian Democrats, punished by voters yesterday for her reversal on aid for Greece, may lose their hold on power in North Rhine-Westphalia, Germany’s most populous state. The party’s worst result since World War II robs Merkel of a majority in the upper chamber in Berlin, limiting her ability to extend the lifespan of nuclear-power plants.
Germany, the European Union’s largest power user, plans to scrap a decade-old law that would have forced the shutdown of its nuclear reactors by about 2020. Merkel favors extended use of the plants to meet energy demand and cut output of gases blamed for global warming. An extension would bolster earnings for utilities with nuclear stations and forego spending on replacement plants.
“It’s suddenly looking much bleaker for her plans,” said Claudia Kemfert, chief energy analyst at the DIW economic Institute in Berlin. “The big question now is will Germany ramp up coal-fired power generation if the nuclear revival fails?”
Germany’s 17 nuclear reactors accounted for 23 percent of the country’s power generation last year, while coal and natural gas made up a combined 55 percent, according to the Berlin-based BDEW utility association. Running a nuclear plant emits less carbon dioxide than a coal- or natural-gas-fed unit.
Underperforming
E.ON and RWE underperformed the benchmark DAX index today, which rebounded from the biggest weekly loss in more than a year after European policy makers unveiled an unprecedented loan package to contain the region’s sovereign-debt crisis.
E.ON, the world’s largest utility, rose 1.9 percent to 25.13 euros in Frankfurt trading as of 11:06 a.m. local time, while RWE added 1.7 percent to 59.18 euros and the 30-company DAX index gained 4 percent.
RWE Chief Executive Officer Juergen Grossmann has said Germany’s decision to scrap nuclear power will make the country less competitive as power prices rise faster than in markets such as France, which has 58 reactors and plans more units.
The election “won’t make it easier” to push an extension for the country’s reactors through the upper house, Joachim Pfeiffer, CDU parliamentary spokesman for economy and energy, said by phone yesterday. The government may yet fall back on a legal precedent and avert a vote in the chamber, he said.
Constitutional Upheaval
“I don’t see how Merkel can circumvent a vote by the states in the upper house,” Ulrich Kelber, deputy parliamentary chairman and environment spokesman for the opposition Social Democrats, said today in by phone. “If Merkel risks it, a constitutional upheaval will be just around the corner.”
In the meantime, RWE and E.ON struck a deal that will prevent a nuclear station from being shut down under existing legislation. Under German law, the amount of power that can be generated from each reactor is fixed, and when that expires, the facility has to be shut down for good.
RWE purchased 4.8 terawatt-hours of nuclear power output rights from a decommissioned E.ON reactor, the two utilities said yesterday. The quota is enough to run a 1,200-megawatt plant like RWE’s Biblis A for about six months, the companies said in e-mailed statements.
Biblis A is one of two German nuclear stations that would have to shut if they were to run at full capacity before the government presents its long-term energy policy plans this year.
Vattenfall AB and Electricite de France SA partner EnBW Energie Baden-Wuerttemberg AG also run nuclear power plants in Germany, while GDF Suez SA has rights to output from three E.ON reactors.
Source: http://www.bloomberg.com/apps/news?sid=a0QIyBbJUc8M&pid=20601087
May 10 -- E.ON AG and RWE AG, Germany’s largest utilities, may not get to run their nuclear plants past scheduled shutdown dates after Chancellor Angela Merkel’s party lost control of parliament’s upper house in a state election.
The pro-nuclear leader of the Christian Democrats, punished by voters yesterday for her reversal on aid for Greece, may lose their hold on power in North Rhine-Westphalia, Germany’s most populous state. The party’s worst result since World War II robs Merkel of a majority in the upper chamber in Berlin, limiting her ability to extend the lifespan of nuclear-power plants.
Germany, the European Union’s largest power user, plans to scrap a decade-old law that would have forced the shutdown of its nuclear reactors by about 2020. Merkel favors extended use of the plants to meet energy demand and cut output of gases blamed for global warming. An extension would bolster earnings for utilities with nuclear stations and forego spending on replacement plants.
“It’s suddenly looking much bleaker for her plans,” said Claudia Kemfert, chief energy analyst at the DIW economic Institute in Berlin. “The big question now is will Germany ramp up coal-fired power generation if the nuclear revival fails?”
Germany’s 17 nuclear reactors accounted for 23 percent of the country’s power generation last year, while coal and natural gas made up a combined 55 percent, according to the Berlin-based BDEW utility association. Running a nuclear plant emits less carbon dioxide than a coal- or natural-gas-fed unit.
Underperforming
E.ON and RWE underperformed the benchmark DAX index today, which rebounded from the biggest weekly loss in more than a year after European policy makers unveiled an unprecedented loan package to contain the region’s sovereign-debt crisis.
E.ON, the world’s largest utility, rose 1.9 percent to 25.13 euros in Frankfurt trading as of 11:06 a.m. local time, while RWE added 1.7 percent to 59.18 euros and the 30-company DAX index gained 4 percent.
RWE Chief Executive Officer Juergen Grossmann has said Germany’s decision to scrap nuclear power will make the country less competitive as power prices rise faster than in markets such as France, which has 58 reactors and plans more units.
The election “won’t make it easier” to push an extension for the country’s reactors through the upper house, Joachim Pfeiffer, CDU parliamentary spokesman for economy and energy, said by phone yesterday. The government may yet fall back on a legal precedent and avert a vote in the chamber, he said.
Constitutional Upheaval
“I don’t see how Merkel can circumvent a vote by the states in the upper house,” Ulrich Kelber, deputy parliamentary chairman and environment spokesman for the opposition Social Democrats, said today in by phone. “If Merkel risks it, a constitutional upheaval will be just around the corner.”
In the meantime, RWE and E.ON struck a deal that will prevent a nuclear station from being shut down under existing legislation. Under German law, the amount of power that can be generated from each reactor is fixed, and when that expires, the facility has to be shut down for good.
RWE purchased 4.8 terawatt-hours of nuclear power output rights from a decommissioned E.ON reactor, the two utilities said yesterday. The quota is enough to run a 1,200-megawatt plant like RWE’s Biblis A for about six months, the companies said in e-mailed statements.
Biblis A is one of two German nuclear stations that would have to shut if they were to run at full capacity before the government presents its long-term energy policy plans this year.
Vattenfall AB and Electricite de France SA partner EnBW Energie Baden-Wuerttemberg AG also run nuclear power plants in Germany, while GDF Suez SA has rights to output from three E.ON reactors.
Source: http://www.bloomberg.com/apps/news?sid=a0QIyBbJUc8M&pid=20601087
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