German nuclear industry faces aid probe

Date: 05/11/1998

By Chris Johnstone

GERMANY'S embattled nuclear power industry is facing an investigation by European Commission competition officials into alleged illegal subsidies.

The probe is another blow to a sector which is facing demands from the country's newly formed Social Democrat-Green government to close down nuclear power stations altogether in the coming years.

Commission officials have so far given no details of the investigation, refusing to say whether it targets electricity producers such as RWE and Bayernwerk which use nuclear plants, or companies such as engineering giant Siemens which contribute much of the technology.

Bayernwerk and Siemens said this week that they knew nothing about the probe into nuclear subsidies. “There are none,” added a Siemens spokesman.

Commission investigations into the sector are not new. Europe's biggest producer of nuclear power, Electricité de France (EDF), has already been investigated for alleged illegal subsidies amid claims from environmental groups that state aid allowed the company to export cut-price electricity to other EU countries.

The Commission found no case for EDF to answer, although some environmentalists claim this was based largely on a technicality and argue that their case could have made more progress if it had been better formulated.

Green groups confessed surprise at a fresh Commission investigation. “I do not know of any special spending on nuclear power in Germany,” said one.

Greenpeace estimated in a 1995 study that the German nuclear industry benefited from around 300 million ecu in direct government subsidies for research and development - a small sum (around 4&percent;) compared with spending on direct subsidies to the coal industry. Separate subsidies to the electricity industry totalled around 6 million ecu, with nuclear generators receiving around a third of that.

Nuclear power meets approximately one-third of Germany's electricity needs, with 19 plants across the country. The new government has announced plans to negotiate their closure with utility companies over the next year, but has warned that it will fix a timetable for phasing them out if no deal can be reached. Germany's Greens have called for a phase-out within four years, but a much longer timetable is likely.

Germany's anti-nuclear stance has already contributed to tension with France, a strong supporter of nuclear power, and serious question marks have been raised over plans for a Franco- German partnership to launch a new generation of nuclear plants, the European Pressurised Reactor (EPR).

Analysts also question how Germany can meet its share of the commitments made by the EU at last year's Kyoto climate change conference to cut greenhouse gases by 8&percent; compared with 1990 levels if nuclear power is phased out.