Swiss utility eyes early shutdown costs as referendum approaches

01 November 2016

Swiss utility Alpiq estimates it will face economic damages of some CHF2.5 billion ($2.5 billion) if voters back an initiative calling for the early shutdown of the country's nuclear power plants in a referendum later this month. However, it says even if the early phase-out is rejected, it cannot operate its reactors economically under current market conditions.

Leibstadt - 460 (KKL)
The single-unit Leibstadt plant, in which Alpiq holds a 32% stake (Image: KKL)

A new Swiss energy policy was sought in response to the March 2011 accident at the Fukushima Daiichi plant in Japan. Two months later, both the Swiss parliament and government decided to exit nuclear power production. The Energy Strategy 2050 initiative drawn up by the Federal Council calls for a gradual withdrawal from nuclear energy. It envisages that the country's five existing reactors, once shut down, are not replaced with new ones. It does not set shutdown dates for any of the units, saying they can remain in operation as long as they are considered safe.

However, another initiative, from the Green Party, goes one step further and calls for a 45-year limit to be placed on the operating periods of existing plants. If it is approved in a referendum on 27 November, the Mühleberg and Beznau plants will have to close in 2017, with the Gösgen and Leibstadt plants shutting in 2024 and 2029, respectively.

Alpiq owns stakes in two of Switzerland's nuclear power plants, holding 40% of Gösgen and 32% of Leibstadt. The company says it has "calculated all the variants of a nuclear power phase-out from a business perspective". A voluntary early shut down is not economically feasible, Alpiq said. "The calculations show that within the current system, the long-term continuing operation is the least economically damaging variant for Alpiq," the company said in a statement yesterday.

If the Green Party initiative receives public acceptance in the referendum, leading to the shutdown of the Gösgen and Leibstadt plants in 2024 and 2029, Alpiq said it faces "economic damage in the region of CHF2.5 billion, for which compensation has to be paid". It added, "The nature and amount of compensation have to be reviewed when the time comes."

"A premature shutdown means that revenues of long-term continuing operation will be lost, while most of the total costs until decommissioning are fixed and will be incurred regardless of the useful life," Alpiq said. "Investments that have already been made or which are still needed could not be amortised over the remaining useful life and payments into the fund for the financing of the shutdown and disposal will increase considerably due to the shorter useful life."

However, the utility noted if the nuclear phase-out is rejected in the referendum, "the status quo would continue, in which the production costs exceed market prices and nuclear power plants cannot be operated competitively". Alpiq said "stable framework conditions" are required for Switzerland's nuclear power plants to be viable. "This is in the best interest of the economy as a whole and will facilitate the implementation of the Energy Strategy 2050."

Switzerland's Federal Council and Parliament, while committed to the phase-out of nuclear energy, have rejected the Green-backed initiative for an early shutdown. Generating capacity lost through the early shutdown of the country's reactors could not be compensated quickly enough by renewable energy sources, they say. This would threaten Switzerland's security of supply and lead to compensation claims from the reactor operators.

Researched and written
by World Nuclear News