Tuesday 7 September 2010

German government does deal with nuclear industry

The life of Germany's nuclear power plants will be extended by up to 15 years under a deal agreed between energy companies and the government of Chancellor Angela Merkel.

A previous government policy would have meant nuclear plants being phased out by the mid 2020s but at the weekend a new deal lead by the Chancellor guaranteed extensions to old and new plants. Older nuclear plants will receive an extension of eight years and newer ones operating with different technical standards will get a 14-year extension.

Energy companies including E.ON have welcomed the deal even though as part of the compromise they will now have to pay more tax in the long term.

E.ON CEO Johannes Teyssen said that it was clear "Nuclear energy will continue to be needed for some time as one of the main pillars of our energy policy". E.ON claims the deal will make an important contribution to maintaining the affordability and security of supply for Germany.

Although the level of tax is lower than previously planned, E.ON will have to pay for six years rather than four. There are also permanent charges paid into a fund to promote renewable energies.

The deal should mean nuclear power will continue on-line till the middle of this century. It is thought the Chancellor backed the policy as she was unsure if renewable sources could plug Germany's energy gap if nuclear was scrapped early.