Energy firms looking at huge nuclear windfall

With German Chancellor Angela Merkel’s new government likely to extend or even roll back Germany’s phase-out of nuclear power, daily Der Tagesspiegel reported on Tuesday the country’s energy countries stand to make billions.

Energy firms looking at huge nuclear windfall
Photo: DPA

German energy company stocks skyrocketed on Monday after Merkel’s conservative Christian Democrats and her preferred coalition partner, the pro-business Free Democrats, won Sunday’s general election.

Both parties have stated they are in favour of changing current laws to keep German nuclear power stations online beyond 2022 – which was the cut-off date determined by Germany’s centre-left government in 2000.

The paper reported the switch would be worth millions to energy companies, which could earn up to €1 million each day a nuclear power plant remains in operation.

A Sal. Oppenheim study cited by Der Tagesspiegel estimated if the government decided to keep the stations online for an extra eight years, EON would earn more than €12 billion and RWE more than €8 billion.

Despite extreme resistance to atomic energy by the German public, Merkel has called it a “bridge technology” that will help lead to a future of renewable energy. She has also said nuclear power is necessary beyond 2022 if Germany wants to reach its goal of reduced carbon dioxide emissions.

The paper reported the new government was likely to try and sell the extended lifetime for German reactors as a sensible way to fund development of renewable energy sources such as solar and wind by forcing the energy giants to channel some of their nuclear profits into greener power generation.

Head of the German Atomic Forum Walter Hohlefelder said in May that he was prepared to “pay a political price for the extension of running time,” Der Tagesspiegel said.

And EON boss told business daily Handelsblatt on Tuesday that its reactors were a logical way to combat climate change: “Our nuclear power plants avoid 150 million tonnes of CO2 annually, that’s as much as the emissions of the entire transport sector.”

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German government announces fresh relief package for high energy costs

With Russia's invasion in Ukraine exacerbating high energy and petrol prices, Germany is set to introduce a second relief package to limit the impact on consumers.

German government announces fresh relief package for high energy costs

The additional package of measures was announced by Economy and Climate Protection Minister Robert Habeck (Greens) on Sunday.

Speaking to DPA, Habeck said the wave of price increases throughout the energy sector were becoming increasingly difficult for households to bear.

“Extremely high heating costs, extremely high electricity prices, and extremely high fuel prices are putting a strain on households, and the lower the income, the more so,” he said. “The German government will therefore launch another relief package.”

The costs of heating and electricity have hit record highs in the past few months due to post-pandemic supply issues. 

This dramatic rise in prices has already prompted the government to introduce a range of measures to ease the burden on households, including abolishing the Renewable Energy Act (EEG) levy earlier than planned, offering grants to low-income households and increasing the commuter allowance. 

READ ALSO: EXPLAINED: What Germany’s relief package against rising prices means for you

But since Russia invaded neighbouring Ukraine on February 24th, the attack has been driving up energy prices further, Habeck explained.

He added that fears of supply shortages and speculation on the market were currently making the situation worse. 

How will the package work?

When defining the new relief measures, the Economics Ministry will use three criteria, Habeck revealed. 

Firstly, the measures must span all areas of the energy market, including heating costs, electricity and mobility. 

Heating is the area where households are under the most pressure. The ministry estimates that the gas bill for an average family in an unrenovated one-family house will rise by about €2,000 this year. 

Secondly, the package should include measures to help save energy, such as reducing car emissions or replacing gas heating systems.

Thirdly, market-based incentives should be used to ensure that people who use less energy also have lower costs. 

“The government will now put together the entire package quickly and constructively in a working process,” said Habeck.

Fuel subsidy

The three-point plan outlined by the Green Party politician are not the only relief proposals being considered by the government.

According to reports in German daily Bild, Finance Minister Christian Lindner (FPD) is allegedly considering introducing a state fuel subsidy for car drivers.

The amount of the subsidy – which hasn’t yet been defined – would be deducted from a driver’s bill when paying at the petrol station. 

The operator of the petrol station would then have to submit the receipts to the tax authorities later in order to claim the money back. 

Since the start of the war in Ukraine, fuel prices have risen dramatically in Germany: diesel has gone up by around 66 cents per litre, while a litre of E10 has gone up by around 45 cents.

READ ALSO: EXPLAINED: The everyday products getting more expensive in Germany

As well as support for consumers, the government is currently working on a credit assistance programme to assist German companies that have been hit hard by the EU sanctions against Russia.

As reported by Bild on Saturday, bridging aid is also being discussed for companies that can no longer manage the sharp rise in raw material prices.

In addition, an extension of the shorter working hours (Kurzarbeit) scheme beyond June 30th is allegedly being examined, as well as a further increase in the commuter allowance.