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ENERGY

Energy firms: Merkel stole our assets with nuclear shutdown

Three energy giants Tuesday went to Germany's top court to challenge the decision by Chancellor Angela Merkel's government to phase out nuclear power after the Fukushima disaster five years ago.

Energy firms: Merkel stole our assets with nuclear shutdown
A nuclear plant in northern Germany. Photo: DPA

Energy giants E.ON, RWE and Sweden's Vattenfall want the Constitutional Court to rule that the move was an expropriation of their assets.

They hope that would bolster damages claims they have already launched in lower regional courts where they are reportedly demanding at least €15 billion in separate cases.

Merkel's government in the days after the March 11, 2011 earthquake, tsunami and subsequent Fukushima reactor meltdowns decided to halt operations of Germany's eight oldest nuclear plants and to shutter the other nine by 2022.

The move, shortly before key regional elections, marked a sharp reversal for Merkel, who had previously overturned a phase-out ordered by an earlier government in 2002 and extended the lifespan of Germany's nuclear fleet until 2036.

Today, eight of Germany's 17 nuclear plants remain in operation.

SEE ALSO: How Fukushima triggered Germany's energy revolution

The energy companies have booked heavy losses amid the nuclear phase-out and shift towards green energy, much of it produced by wind and solar plants operated by households, small businesses and municipalities.

The glut of government-subsidised renewable power has led to a collapse in wholesale electricity prices.

The companies filed the first of a spate of legal cases in 2012.

The chief of Germany's biggest power company E.ON, Johannes Teyssen, told the Constitutional Court: “This is not a political issue or about whether you are for or against nuclear power.

“The question is simply: do we have the right, overnight, to deprive people… of their assets without compensation?”

E.ON this month said it suffered a seven-billion-euro net loss in 2015, blaming in part the massive write-downs on the value of its electricity plants.

Critics argue that the big energy companies benefited from massive state subsidies when the nuclear plants first went into operation.

Safely decommissioning all the plants and storing their radioactive parts and waste will cost around 50 billion euros, experts estimate.

Industry observers say the companies hope to use a favourable court ruling as leverage in parallel talks on state aid for decommissioning the atomic plants.

However, Environment Minister Barbara Hendricks said Tuesday that “the government will not agree to any deals”.

The Constitutional Court hearings run until Wednesday, and a ruling is not expected for several months.

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ENERGY

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.

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