FRANKFURT (Reuters) - When Germany committed itself five years ago to phasing out nuclear power by 2022, there was one big gap in its plans — what to do with the waste that can remain toxic for hundreds of thousands of years.
That issue remains unresolved even after a government-appointed nuclear commission came up with ideas on how to ensure funding for shutting down all of the country’s atomic reactors.
According to a draft proposal, utilities E.ON, RWE, EnBW and Vattenfall [VATN.UL] could be saddled with up to 56 billion euros ($61.6 billion) in costs to cover their share of the cost of the nuclear exit.
But the final bill could climb even higher and the extra cost may have to be met by German taxpayers.
The main uncertainty centres on the difficulty of finding a permanent storage site to house highly radioactive material.
Local opposition has ruled out turning an interim waste storage site in salt formations in the small village of Gorleben in northwest Germany into a final site, with the location having ultimately been excluded by law.
The nuclear commission has proposed capping the utilities’ liability for storage costs at 36 billion euros — twice the size of current provisions made by the four utilities for that part of the process.
This proposal would put a ceiling on costs for the power firms and remove a major source of investor concern.
But there is caution that this is only a draft settlement which does not settle the practical problem of finding a storage site.
Analysts at Jefferies are among those who “remain concerned about the potential for future cost escalations and the negative balance sheet implications that it may have for German utilities”.
Underlining the tensions around the storage issue, German utilities have sued the government over the Gorleben decision, claiming a ban is politically motivated and will force them to incur additional costs.
The OECD’s Nuclear Energy Agency says it is impossible to gauge the future costs of storage sites because each country’s geography is different and there are no previous projects to serve as examples.
In contrast, the dismantling of nuclear plants, for which utilities have set aside about 20 billion euros in provisions, is more predictable in terms of costs.
Several plants have already been torn down and several more are being dismantled after the German government decided to end nuclear in the wake of the Fukushima disaster in 2011.
More fanciful ideas to dispose of the nuclear waste include shooting it into outer space, but underground storage remains the most feasible option.
Finland and Sweden are most advanced in their preparations for such a solution to their own waste issues, hoping to be the first countries to put high-level waste into underground caverns in the next decade. ($1 = 0.9088 euros)
Editing by Keith Weir