Summary
Merkel's CDU/CSU and its new pro-business partner, the FDP, have enough votes to push through their plans to allow Germany's 17 operating nuclear plants to continue past the current lifetime limitations created by the country's nuclear phase-out law. However, there will be strong opposition from the three non-governing parties -- SDP, Greens & Left Party. Thus, the most likely outcome is that the 17 reactors will be given reprieves for up to 10 years each.
Analysis
As indicated in the Summary above, there does not appear to be a major hurdle for the new center-right coalition to push through its plans to extend the operating lives of Germany's 17 reactors. However, they will definitely not get everything they want in this regard, especially since German public sentiment is deeply divided on the issue. Still, since the country is committed to reducing greenhouse gas emissions while not destroying its economy, there is no option but to continue relying the current nuclear plants longer. The specifics on how the phase-out law will be changed remain unclear, but it will probably entail something like adding a standard amount of operating allowances (in terawatt-hours) to each of the 17 plants.
Merkel has labeled nuclear power as a "transition energy source," which will be used to bridge the gap between the current heavy reliance on coal to new, renewable energy sources (i.e. wind, biomass, solar, etc.). Thus, it seems probable that the extension of the nuclear plant lives will also require operators to pay some percentage of these revenues into a fund for renewable energy.
Given that reactors would have to start shutting down in 2010 (3 in 2010) and all 17 by 2022, all the nuclear utilites in Germany will benefit, i.e. RWE, E.ON, EnBW, and Vattenfall. Since RWE has 2 out of the 3 units scheduled for shutdown in 2010, it may benefit the most early on, but E.ON and EnBW will also get reprieves on multiple plants that need to shutdown under current law between 2010 and 2012.
One thing that still remains highly unlikely is an overturn of the ban on new nuclear plants in Germany. What the election results and new center-right government basically mean is that the current 17 plants will be given some more time, but the longer term future of nuclear power in Germany is by no means dramatically altered.
This author consults with leading institutions through GLG
Analyses are solely the work of the authors and have not been edited or endorsed by GLG.
