09 Sep 2015, 00:00

Legal disputes over the nuclear phase-out

The utilities reacted to German government’s 2011 decision to accelerate the nuclear phase-out, with billions of euros worth of lawsuits. The power plants operators say the state must compensate them for lost earnings and investments made when nuclear power still looked to have a future in Germany. Courts are yet to rule on whether government acted legally.

On 14 March 2011 – just three days after the melt-down of Japanese Fukushima Daiichi – Angela Merkel’s conservative-liberal coalition government issued a preliminary standstill order (moratorium) on the seven oldest nuclear power stations and Vattenfall’s Krümmel plant. Three months later, the Bundestag (federal parliament) passed a reform of the Nuclear Law (Atom-Gesetz), cementing the ultimate shutdown of these eight plants and decreeing the end of nuclear power generation in Germany by 2022.

Utilities find fault with both aspects of the phase-out – the standstill order and the full phase-out by 2022 – and the courts could uphold their complaints.

Fighting the moratorium (standstill order): 875 million euros

The administrative court in Kassel found the 2011 moratorium, issued by the Hessian state government following Merkel’s instructions, to have been issued without the required hearing and justification. Utility RWE is therefore claiming 235 million euros in compensation for loss of profit and extra costs during the three months that its reactors at Biblis didn’t run because of the standstill order. E.ON wants 380 million euros for not being able to sell power from two of its plants during the moratorium, and EnBW is suing for 260 million euros for the same reason.

Fighting the new nuclear law of 2011: over 15 billion euros

Aside from these 875 million euros worth of damages, the utilities could claim over 15 billion euros in additional compensation if their complaints with the German Constitutional Court are upheld. RWE, E.ON and Vattenfall have told the highest German court in Karlsruhe that the nuclear phase-out legislation passed in summer 2011 which limits their plants’ lifetimes to 2022, unduly effects their constitutional rights to property and freedom to choose an occupation. They argue that they lost out on investments made on the basis that their atomic plants would be allowed to run longer, as Merkel’s government had mandated for in 2010. They further claim extra costs for keeping plants in a post-operational phase, and for having to buy electricity at the exchange to honour long-term contracts.

Lawyer Felix Ekardt, who is head of the research unit sustainability and climate policy in Leipzig doesn’t think that the utilities’ claims are justified. The government would only owe the utilities compensation if it had dispossessed them of their assets, he says. “But this isn’t an expropriation because the state didn’t acquire the nuclear power plants, it simply followed a policy of risk-minimisation,” Ekardt says.

Lawyers from Greenpeace and the German Federal Bar (Bundesrechtsanwaltskammer) also conclude that the constitutional claims of the utilities will be unsuccessful – both for technical reasons and because the utilities had not actually been dispossessed of anything. Even if they had, the government’s reaction was proportionate, since it is another obligation in the constitution that the state protects citizens from dangers and it is down to the legislator to decide whether or not nuclear power is safe to use. The decision by the Constitutional Court is pending.

Vattenfall, as a Swedish company, is also suing Germany for almost 4.7 billion euros at the International Centre for Settlement of Investment Disputes (ICSID) in New York.

Fighting the process of finding a nuclear waste repository

Further complaints are pending with the Constitutional Court and administrative courts regarding nuclear waste storage facilities. In 2013, parliament decided to stop using a site at Gorleben, close to Hamburg, as a temporary storage facility during the exploratory process to identify longer-term storage sites (See Factsheet on nuclear waste storage here). But because utilities had already paid for the construction and operation of Gorleben, RWE and E.ON argued that the costs for storing some 26 Castor casks at new interim storage facilities near their power stations should be covered by the government. However in June 2015, Environment Minister Barbara Hendricks published a concept for the distribution of Castor casks coming back from treatment in the UK and France. Herein the four large utilities agreed that they would let their legal actions over storage costs rest until a procedure based on the new concept is decided on, and would consider withdrawing the law suits once a solution is found.

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