Vattenfall to contest nuclear phaseout

Swedish energy giant Vattenfall is reportedly preparing to take the German government to the Washington-based International Centre for Settlement of Investment Disputes over the closure of its nuclear power plants.

Vattenfall to contest nuclear phaseout
Photo: DPA

According to a report in financial daily Handelsblatt, Vattenfall is already finalizing a complaint, and is preparing to file it before Christmas.

German energy companies E.ON and RWE have already filed legal complaints against Germany’s plan to phase out nuclear power, but as a foreign company, Vattenfall can invoke the Energy Charter Treaty (ECT), an international agreement that provides a multilateral framework for energy deals.

Vattenfall did not comment on the report, though it said it was expecting “compensation for the phase out from nuclear energy.”

The ECT protects foreign investors against violations of their property rights. Article 10 of the treaty, signed by 51 countries plus the European Union, says each signatory will “encourage and create stable, equitable, favourable and transparent conditions for investors,” and will ensure “fair and just treatment” for investors.

Vattenfall is claiming that it stands to lose €700 million it had invested in the nuclear power stations Krümmel und Brunsbüttel after the government originally agreed to extend the life-spans of its nuclear power stations.

Both of those reactors were shut down permanently earlier this year after Angela Merkel’s government performed a dramatic U-turn in its energy policy in the wake of the Fukushima nuclear disaster in Japan. Germany’s last nuclear power stations are set to be shut down permanently in 2022.

Vattenfall is also complaining that the surplus energy that the reactors had already generated is now no longer worth much, since many reactors are being shut down even quicker than planned.

Vattenfall has successfully appealed to the ICSID against Germany in 2009, over lost income because of stronger environmental regulations on a coal power station near Hamburg. The company settled with the German government for an undisclosed sum.

The Local/bk

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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.