A statement from the economics minister has helped to alleviate a number of concerns that have been hanging over the heads of five German nuclear utility companies.
Five utility companies had been feeling the pressure in recent times over fears that the €38.3bn, which they had set aside to cover the costs of disposing radioactive waste and dismantling various plants, may not be enough. However the economics minister, Sigmar Gabriel, released a statement that confirmed that expert opinion agreed with amount that Eon, RWE, Vattenfall, EnBW and Stadtwerke Munchen, have put by.
The German government commissioned a group of auditors to estimate the potential costs that would need to be covered. They concluded that it would require something in the range of €29bn to €77bn. They asserted that the net assets of these groups would be adequate to cover payments in even the most expensive of situations.
The statement from the government said that the money set aside “fall within the range calculated by the experts”. The five groups in question then released a joint statement saying:
“In view of this unequivocal finding, speculation about a possible need for higher provisions has no basis in fact.”
An analyst at Bernstein, Deepa Venkateswaran, said that this revelation would life “a significant overhang on the stocks”. The analyst went on to say:
“The base case of €38bn of industry-wide nuclear provisions will be the focal point of discussions, as opposed to unconfirmed speculation doubting the level of these provisions.”
Nuclear energy currently accounts for about 16% of the German power supply but is currently being dismantled as an energy source. This decision was taken in response to the Fukushima disaster that saw a nuclear power plant severely damaged by the tsunami in Japan. Nuclear power is to be completely disconnected from the grid by 2022.
