Nuclear Power Extension Term Sheet Released

The Federal Government has made the term sheet for a “Promotion Fund Agreement” (Förderfondsvertrag) public. The controversial document contains details on payments from the nuclear power generators for a renewable energy fund in connection with the extension of the operating times for German nuclear power plants. 

The Federal Government had agreed a nuclear extension compromise on Sunday evening. The term sheet was signed early on Monday morning. Many elements from the term sheet were included in political statements in connection with the presentation of the new Energy Concept on Monday. The term sheet itself was not specifically mentioned in this context. Reports in Süddeutsche Zeitung and Financial Time Deutschland triggered a controversial debate over the agreement between the federal government and the nuclear power companies.

The term sheet provides for “promotion contributions” (Förderbeiträge) of EUR 9/MWh from the nuclear power operators to fund promotional measures to implement the new Energy Concept starting 2017. The contributions shall be tied to the development of the consumer price index and the “German Baseload Future” of two years later (n+2). The term sheet’s reference to a “German Baseload Future” is in square brackets, and leaves room for interpretation as strictly speaking the EEX has no German Baseload Future index. It presumably means the EEX Phelix Baseload Future. The German Baseload Furture indexation is based on a price of EUR 53.83 (3 September 2010), and shall only apply if the Baseload Future exceeds EUR 60/MWh or falls below EUR 43/MWh (after consumer price indexation).

The operators shall make non-refundable pre-payments on the promotion contributions of EUR 300 million in 2011 and 2012, and EUR 200 million from 2013 to 2016. If the nuclear fuel elements tax exceeds EUR 2.3 billion per year, the pre-payments shall be adjusted accordingly.

The promotion contributions shall be reduced if

  • for the relevant power plant
    • the permitted remaining generation volume is lower than the agreed level (i.e. the plus 8/plus 14 year levels), or
    • backfitting and security requirements exceed EUR 500 million, or
  • the nuclear fuel rod tax is higher than EUR 145/g plutonium/uranium.

In practice, this clause shall provide some protection against political changes, in particular another reversal of nuclear power policy by a new government.

The Promotion Fund Agreement shall be reviewed in 2019.

The term sheet provides for initialling of the Promotion Fund Agreement by the end of September. Signing shall take place after completion of the parliamentary process to amend the Atomic Energy Act.

Source: Term Sheet Bundesregierung

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