Germany debates how to dump nuclear power

Germany has embarked on a state-sponsored shift away from nuclear energy toward renewables and fossil fuels as worries over atomic power have grown in the wake of Japan's nuclear disaster.

Speaking after meeting leaders from the country's states on Friday, Chancellor Angela Merkel used some of her strongest language to date on the subject.

"We all want to exit nuclear energy as soon as possible and make the switch to supplying via renewable energy," she said, adding that efforts would focus on developing power grids, renewable technology and energy efficiency.

Japan's nuclear crisis has led to a volte face in Germany's nuclear energy plans and an immediate shutdown of several nuclear plants.

In a document from Friday's meeting obtained by Reuters, Merkel and her ministers laid out a six-point plan that includes a 5 billion-euro credit programme to support renewables.

It will also require building new gas and coal plants, Merkel said. "Gas and coal power plants were discussed... an accelerated exit from nuclear energy will lead to replacement power stations," she said.

Environment Minister Norbert Roettgen, who mentioned wind power as the main pillar of the new plan, said the cabinet aimed to agree the main points of its efforts in June.

Energy Firms Hit

Also speaking at the news conference following the meeting, Erwin Sellering, prime minister of the state of Mecklenburg Vorpommern, said the year 2022 was the latest possible date for the closure of Germany's last nuclear plant.

Germany generates around 23 percent of its power from nuclear sources and faces a supply squeeze if the switch is turned off before a 2022 deadline set in 2000 by the former center-left government of Social Democrats and Greens.

Shares in top energy firms such as E.ON and RWE fell on Friday in an otherwise buoyant market as uncertainty mounted over how the policy shift would affect them.

Physical coal and coal swaps rose by around 25 U.S. cents to $1.00, in line with stronger oil prices and boosted by Germany's plans to leave nuclear power.

German utilities are facing a big challenge as their most profitable large scale generation assets, their nuclear plants, face an uncertain future.

"A bigger bang is inevitable and needed. Utilities have a lot to lose," said Kepler Equities analyst Ingo Becker, who predicts both E.ON's and RWE's share prices could still lose more than 10 percent.

German firms are among world leaders in renewable energy and making equipment used for wind and solar power. The country gets 17 percent of its electricity from renewables and aims to raise that to 40 percent by 2020.

[Source: By Brian Rohan, Reuters, Berlin, 15Apr11]

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