Germany to reconsider nuclear plant shutdown in following weeks

When the war in Ukraine started, German ministers from the Greens calculated that prolonging the operation of the last three nuclear plants would be too costly and complicated. With the latest developments regarding Russia’s gas supply, they are willing to reconsider.

Pressured by coalition partners and the opposition alike, Germany’s Alliance 90/The Greens is seemingly becoming more open to the idea to extend the operation of the country’s last three nuclear power plants. The Federal Ministry for Economic Affairs and Climate Action, run by Vice Chancellor Robert Habeck, a high-ranking member of the party, said it would perform another stress test for the national electric grid.

After the first examination, in March, following Russia’s invasion of Ukraine, the conclusion was that keeping the three facilities working after the end of the year would bring major legal, licensing, safety and insurance issues.

Widespread concerns about the lack of electricity may give room to the Greens to stop insisting on shutting down Germany’s last three nuclear plants by year-end

At the time, Minister for the Environment, Nature Conservation, Nuclear Safety, and Consumer Protection Steffi Lemke, also from the Greens, opposed the extension together with Habeck. They have also said it would be difficult to obtain nuclear fuel.

However, Russia has cut gas supplies to the European Union, sending prices to unprecedented highs, which prompted the government to fire up idle coal plants and postpone scheduled closures. It is uncertain whether Germany’s electricity generation capacity would be sufficient to get through the winter, so concerns among the citizens and executives from major companies could open the way for the Greens to temporarily give up on the denuclearization plan.

New stress test to be conducted with calculations of greater risks than first one

Habeck’s ministry now said the assessment would be conducted within weeks and with greater theoretical risks than the last time. The government pointed out that the results could justify prolonging the shutdown of nuclear plants Isar 2, Emsland and Neckarwestheim 2. Together, they had a 6% share in domestic power production in the first quarter.

Reuters reported, citing information from the ministry’s internal document, that the stress test would include the possibility of outages in nuclear power plants in France.

German nuclear power plant operators have already said they can purchase the additional reactor rods that would be necessary to keep the facilities working longer. However, they also warned the decision has to be made quickly as it takes time to reverse the ongoing shutdown process.

Gazprom declares force majeure retroactively

Things aren’t looking well for the European Union’s energy security. Gazprom shut down the Nord Stream 1 gas pipeline on July 11 for ten days for maintenance. But the resumption of supply at an agreed level is still in question.

Both Uniper, Germany’s biggest buyer of Russian gas, and RWE confirmed they are among the clients that Gazprom informed of a force majeure. Furthermore, the Russian company reportedly declared it retroactively from June 14, when it cut supplies through Nord Stream 1 to 40% of capacity.

Germany is preparing to bail out Uniper while France offered to buy out EDF’s minority shareholders for EUR 9.7 billion

The government is in talks with Uniper on a bailout. The German media learned it could take over 25% to 30% of the utility. The cost is estimated at EUR 9 billion. Additionally, water levels on the Rhine are low due to drought, impeding coal deliveries by barges.

French state-owned power utility EDF is also on the verge of insolvency. The government, which holds 84%, said today that it would offer minority shareholders a total of EUR 9.7 billion to buy them out, at a premium of 53%. Aside from the gas troubles, the company has suffered a series of blows in the past year with malfunctions at several of its nuclear plants.

The market price of baseload power in France soared today to EUR 630 per MWh, an all-time high. The day-ahead price hit EUR 589.22 per MWh, a 13-year record.

Germany’s benchmark one-year forward contract for the delivery of electricity topped EUR 350 per MWh last week for the first time. Futures prices indicate the market doesn’t expect the energy crisis to ease for another two years.