Berlin slams "irresponsible" report on nuclear funds

Tuesday, September 15, 2015

FRANKFURT/BERLIN, Sept 15 (Reuters) - German economy minister Sigmar Gabriel refuted media reports of a provisioning shortfall of up to 30 billion euros ($34 billion) in nuclear exit costs, speaking of "irresponsible speculation," that sent shares in the nuclear plant operators tumbling.

Spiegel Online reported a potential shortfall in provisioning for nuclear waste storage late on Monday, citing the findings of a law firm appointed by the economy ministry.

The last of Germany's atomic plants - operated by E.ON , RWE, EnBW and Vattenfall are due to be shut down in 2022.

The 39 billion euros the operators have set aside for decommissioning would cover dismantling facilities but not the storage of nuclear waste, the Spiegel report said.

But Gabriel said the stress tests of the operators' provisions were not yet completed.

"The current numbers game is no basis for our concrete political action," he said. "There is irresponsible speculation about the stress test for nuclear energy."

The ministry denied the numbers cited in the report, whose publication is not expected until later in the autumn, but could not stop a sell-off in utility shares.

Shares in E.ON and RWE plunged to more than 20-year lows, although they later pared losses, with E.ON down 5.5 percent and RWE down 3.8 percent by 1320 GMT.

German utilities have shed a combined 20 billion euros in market value this year as they grapple with low energy prices, rising competition from renewables and regulatory uncertainty ahead of the nuclear exit.

Analysts at Bernstein wrote in a note that the law firm's findings cited in the report appeared to be based on an extreme scenario.

"We have serious doubts on the validity of this assertion," they said, regarding the shortfall.

An E.ON spokesman said Spiegel's conclusion appeared to assume negative interest on the sums held, which "therefore does not arrive at a realistic sum for the provisions". E.ON is working on the basis of earning 1 percent interest on the funds.

RWE said it had made "right and appropriate" provisions, while EnBW said its provisions were kept topped up. Vattenfall declined comment.

Law firm Warth & Klein Grant Thornton, which has been commissioned by the ministry to assess the provisions, declined to comment.

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