German govt wants nuclear exit by 2022 at latest

BERLIN Mon May 30, 2011 2:42pm BST

Several thousands protesters take part at an anti-nuclear demonstration in Frankfurt May 28, 2011. Words on the transparent in front read: ''No return into a nuclear age''. REUTERS/Kai Pfaffenbach

Several thousands protesters take part at an anti-nuclear demonstration in Frankfurt May 28, 2011. Words on the transparent in front read: ''No return into a nuclear age''.

Credit: Reuters/Kai Pfaffenbach

BERLIN (Reuters) - Germany wants to shut all nuclear reactors by 2022, Chancellor Angela Merkel's ruling coalition declared on Monday, in a policy reversal drawn up in a rush after the Fukushima disaster in Japan.

The coalition, sensitive to accusations it may increase dependence on highly polluting brown coal, said it planned to cut power use by 10 percent by 2020.

Merkel may be hard pressed to sell the plan as anything but a political defeat at the hands of Social Democrat and resurgent Green rivals and she quickly came under fire from abroad.

The proposal may be even more ambitious than the nuclear exit planned when the Social Democrats (SPD) and Greens were in power in 2000. It takes eight of 17 nuclear plants offline now and six more by 2021.

But the most drastic decision by an industrialised country after Fukushima could still face opposition from utility firms.

Only nine months ago Merkel announced an extension of the lifespan of unpopular nuclear plants by an average 12 years. In March, after Japan's earthquake and tsunami, she reversed that and put Germany's entire energy strategy under urgent review.

"Our energy system has to be fundamentally changed and can be fundamentally changed. We want the electricity of the future to be safer and, at the same time, reliable and economical," Merkel told reporters on Monday.

To accompany the nuclear exit, Germany plans to cut electricity usage by 10 percent by 2020 and double the share of renewable energy sources to 35 percent over the same period, according to a government paper seen by Reuters.

Merkel did not outline further details of the plan but the government paper said Germany's goal of reducing greenhouse gas emissions by 40 percent by 2020 remained in place.

She holds a news conference at 1400 GMT with Environment Minister Norbert Roettgen and Economy Minister Philipp Roesler.

"(It's) definite: the latest end for the last three nuclear power plants is 2022," Roettgen said before leaving the late-night meeting in the chancellor's office by bicycle.

A disputed 2.3 billion euro a year tax on spent fuel rods will not be scrapped even as the coalition plans to go ahead with the shutdown, Roettgen said.

Most voters in Germany oppose atomic energy, which provided 23 percent of overall power before the seven oldest stations were shut down in March.

Sweden, whose state-owned power group Vattenfall [VATN.UL] operates two of Germany's nuclear plants, said setting a date to shut them was the wrong approach and Berlin should instead focus on boosting the use of renewable energy.

NO POLITICAL WIN

Merkel's about-turn has done little to gain her support, but has drawn scorn from the opposition and her own party ranks. Tens of thousands of people demonstrated against nuclear energy at the weekend all across Germany.

"Closing down a little bit is not possible," said Greens party co-leader Claudia Roth, referring to coalition plans to keep one of the older plants as a "cold reserve" for two years.

Nuclear policy is heavily disputed in Germany and the issue helped boost the Greens, who won control of one of the CDU's stronghold states, Baden-Wuerttemberg, in a March vote.

Merkel's majority in the Bundesrat upper house, where the states are represented, vanished last year after the CDU failed to hold onto the populous North Rhine-Westphalia state. Losing Baden-Wuerttemberg, a vote held in the shadow of the Fukushima nuclear crisis, dealt another blow to Merkel's authority.

Germany's largest power provider RWE, which had suggested ending nuclear power in 2025, signalled its opposition to the deal and said it would keep "all legal options open".

"The end (of nuclear power in Germany) by 2022 is not the date we had hoped for," a spokesman said, declining to comment on the effect of the decision on the company's earnings.

The decision could still face opposition from RWE's peers E.ON, Vattenfall and EnBW, the other three utility companies that run the 17 plants.

German industry association BDI said the exit would push up energy prices, make it more difficult to reach emissions targets and would mean that "the shortfall of nuclear power will have to be compensated by coal and gas power stations".

German baseload power in the wholesale market on Monday rose 70 cents from Friday to 60.20 euros a megawatt hour.

Shares in utilities E.ON and RWE fell 2.2 and 2.4 percent respectively at the open.

NO WAY BACK

A massive earthquake and tsunami in March crippled Japan's Fukushima plant, causing releases of radioactivity, sparking calls for tougher global safety measures and prompting some governments to reconsider their nuclear energy strategy.

The German decision still needs to go through parliament and leaders of the opposition Social Democrats and the Greens were present at parts of the meeting to enable a broad consensus.

Roettgen said there would be no clause allowing for revision of the deal in future.

The coalition also wants to keep a nuclear tax, which was expected to raise 2.3 billion euros ($3.29 billion) a year from this year, but so far has not been levied. With the immediate exit of eight plants, it will raise less than envisaged.

It had considered dropping the tax in return for the utilities not suing the government over an early exit.

(Reporting by Annika Breidthardt, Andreas Rinke and Hans-Edzard Busemann; additional reporting by Vera Eckert, Peter Dinkloh, Josie Cox and Jonathan Gould in Frankfurt, editing by Philippa Fletcher)