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Nuclear phaseout unlawful?

March 15, 2016

Germany's Constitutional Court is looking into the legitimacy of the country's 2011 law on a complete nuclear phaseout. Some of the nation's top energy firms claim it's unlawful and demand substantial compensation.

Deutschland Atomkraftwerk Gundremmingen
Image: Imago/Eibner

In the wake of the Fukushima tsunami and subsequent nuclear disaster in 2011, the German government at the time decided to write into law the complete phaseout of nuclear energy in the country by 2022.

The law stipulates that eight of Germany's 17 reactors have to be shut down immediately, with the remaining nine to be taken off the grid gradually until 2022.

The legislation reversed a decision taken by the same government seven months earlier to give energy companies more time for the transition by allowing the phaseout to continue until 2036.

Three of the biggest energy companies operating in Germany - Eon, RWE and Vattenfall - claim the fixed dates for the shutdowns amount to expropriation. They also claim the fact that the estimated volumes of energy each reactor can generate until 2022 cannot be used up until then, as stipulated in the 2011 legislation.

On that basis, the companies say it is unlawful as it does not require the energy companies to be compensated for their losses. They have stressed, however, that they do not want to reverse the 2022 phaseout.

On Tuesday and Wednesday, the Constitutional Court in the south-western city of Karlsruhe is debating the legitimacy of the law, with a verdict only expected in a few months.

German town faces challenges after nuclear exit

The court expects to hear statements by representatives from the federal and the regional governments involved as well as from the energy firms themselves.

Arriving for the hearing in Karlsruhe on Tuesday, Eon CEO Johannes Teyssen said the lawsuit was about "a fair nuclear phaseout" and "compensation for assets which have been expropriated for political reasons."

But the federal government insists the law is not unconstitutional. Environment Minister Barbara Hendricks told the Reuters news agency in Karlsruhe on Tuesday that "we are confident that our stance on the matter will prevail."

If the court rules in favor of the energy companies, they could then file additional lawsuits for compensation. It is by no means clear how the court will rule, but instead of demanding the law to be scrapped, it could give the government time to amend it.

Earnings at Germany's big energy companies have plummeted since the law was introduced, with the firms struggling to compensate for the losses incurred from the shutdown of the reactors. Last week, Eon posted an annual net loss of 7 billion euros ($7.8 billion).

It is also not clear who will pay for the shutdown and the storing of nuclear waste, which experts say could amount to 49 billion euros.. A special commission in Berlin is currently debating the issue.

ng/hg (Reuters, dpa, AFP)