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GERMANY: July 2, 2007
FRANKFURT - German power firms are frustrated that a government-organised meeting on energy issues next week is likely to avoid what they see as a key issue -- the future of nuclear power.
Chancellor Angela Merkel is bound to a seven-year old deal to phase out nuclear energy by the early 2020s and risks a serious crisis with anti-nuclear forces in her coalition government if she reneges on it.
But utilities, which say they need longer nuclear operations to win time to meet increasingly ambitious environmental goals, are fed up with the prospect of a third such high level meeting taking place without an open discussion of the nuclear issue.
They are also baulking at proposed efficiency targets which the government wants to push through at the July 3 meeting.
The results of the gathering will form the basis for a national energy plan in the autumn, which utilities fear will be unrealistic.
"We need the dialogue for business reasons but it has deteriorated to a climate meeting which knocks nuclear and discredits coal -- away from an objective energy debate," an executive at one of Germany's big four utilities, who asked not to be named, said.
Merkel, a conservative whose views on nuclear power generation clash with those of her Social Democrat coalition partners, must reconcile the energy industry's needs with her climate protection policies.
The energy sector is about to invest billions of euros in renewing ageing power stations, mainly with coal-fired units, but says it needs stable policies to make this sustainable.
EMISSIONS CUT TARGETS
Energy bosses say anti-nuclear Environment Minister Sigmar Gabriel of the Social Democrats is ignoring the environmental benefits of nuclear energy, which is mostly free of polluting carbon dioxide emissions.
Opposition to nuclear power remains high in Germany, although the technology is experiencing a revival elsewhere.
Gabriel insists on the nuclear withdrawal plan and wants the country to commit to an increase in energy efficiency of three percent per annum up to 2010 to avoid too much carbon pollution.
Gabriel wants CO2 emissions cut by 40 percent by 2020, compared to 1990 levels.
But industry is growing frustrated at government's demands for environmental gains and the refusal to extend the life of nuclear plants, whose case may not have been helped by Thursday's closure of two northern German nuclear power stations after problems.
"Political intentions to raise efficiency alone cannot replace the role of any single power plant," Harry Roels, chief executive of the country's biggest power generator RWE, said in a statement to Reuters. "The government has an obligation to safeguard a broad energy mix."
The big four -- RWE, E.ON, Vattenfall Europe and EnBW -- lead the 100,000 megawatts (MW) power production industry which relies mostly on nuclear power and coal to provide round-the-clock electricity.
If nuclear disappears and if highly polluting coal generation is burdened with environmental goals, the argument goes, Germany would be overly reliant on volatile and expensive gas turbines and renewable industries.
Gabriel has just squeezed the industry by making steep cuts to the number of free permits to emit CO2, while raising state aid for offshore wind farms by a third from 2009.
The federation of German industry, the BDI, thinks his policies threaten the provison of around-the-clock baseload power, which only cheap coal and nuclear plants can offer, and has warned of a "creeping deindustrialisation."
Story by Vera Eckert
REUTERS NEWS SERVICE
