Nuclear tax robs seven months from German plant

28 March 2014

The Grafenrheinfeld nuclear power plant will close seven months early, said EOn, claiming the government tax on nuclear fuel makes its final period of operation uneconomic.

The fuel tax is designed to take about one half of operational profit from Germany's remaining nuclear reactors and must be paid by the operator on every gram of uranium or plutonium loaded into a reactor core. Nuclear reactors normally refuel every 12-18 months, but Grafenrheinfeld needs to to refuel only a few months before permanent closure.

Plant owner EOn has therefore decided not to refuel in May 2015, on the basis that it cannot recoup the cost of the tax before the plant is ordered to close on 31 December 2015. "The early decommissioning is in the interests of the shareholders and is inevitable, given the shortened residual term for Grafenrheinfeld," said the company.

The decision was announced to the Federal Network Agency that controls the country's electricity grid, as well as the grid operator, Tennet. The organisation said the early closure of the reactor did not threaten security of supply, but would lead to "very significant" increases to its interventions to maintain grid stability, which would "sharply" raise the costs of this aspect of grid management beyond the current €150 million ($206 million) per year. These costs are passed on to all users of the electricity grid.

Grafenrheinfeld is a 1275 MWe pressurized water reactor. Independent regulators in other countries allow similar units to operate until a service life of 50 to 60 years, subject to regular checks. In Germany however, political opinion has resulted in arbitrary lifespans for nuclear power plants, which were then shortened after the Fukushima accident. Grafenrheinfeld will be 32 years and 11 months old if it retires according to EOn's plan in May 2015.

Courtroom drama

The announcement by EOn comes after German utilities have battled the fuel tax in local courts to achieve a referral from the Hamburg Tax Court to the European Court of Justice, although its ruling is not expected until early 2016. Nuclear plant owners have also fought the mandated shutdown of eight units in the immediate wake of the Fukushima accident, which was declared unlawful by the German Supreme Administrative Court in January this year. The early closure of Grafenrheinfeld could open a third potential legal battle - claiming damages from early shutdowns of units made uneconomic by the tax, should that be ruled illegal at the European level.
Researched and written
by World Nuclear News