Germany has agreed to pay four energy companies a total of €2.43 billion for forcing them to shut down their nuclear power stations in the wake of the 2011 Fukushima disaster in Japan.
Grafenrheinfeld nuclear power plant, Germany
The Grafenrheinfeld nuclear power plant in Lower Franconia, Bavaria, Germany, operated from 1981 to June 28, 2015, when it was taken offline as part of the government's nuclear phaseout policy. Credit: pilot_micha / Flickr
The agreement, which was announced last Friday, will settle the long-running legal disputes between the federal government and the four companies - EnBW, Eon, RWE and Vattenfall.
Until now, the parties had been unable to agree on the amount of compensation that should be offered to the operators and on what terms.
“This led to years of legal disputes, including before the German constitutional court and an international court of arbitration, which can now be settled,” said a statement by the German government.
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The decision to close down Germany's nuclear power stations remains one of Angela Merkel's most-controversial in her almost 16 years as chancellor, arguably second only to her open-border policy during the refugee crisis in 2015 which allowed almost one million refugees to enter the country.
In 2010, her centre-right coalition government said that it would extend the lifetimes of Germany's 17 nuclear power stations until at least 2036.
In March the following year, the nuclear power plant in Fukushima, Japan was hit by a tsunami following an earthquake, causing three nuclear meltdowns and the worst nuclear disaster the country had seen during peacetime.
The event marked a turning point in Germany's attitudes towards nuclear energy. Several days later, more than 40,000 protesters formed a human chain that reached 45 km (28 miles) from the Neckarwestheim nuclear plant to nearby Stuttgart as a demonstration against the government's nuclear extension plans.
In June 2011, Merkel performed a complete u-turn on the issue of nuclear energy, ordering the immediate closure of eight of Germany's 17 reactors. The ensuing policy also included a timeline for the total phasing out of nuclear power by 2022.
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The nuclear phaseout plan received the backing of over 80% of Bundestag members. The only party to vote against it was Die Linke (The Left), which called for a faster timeline.
In December 2016, a constitutional court ruling found the phaseout to be lawful but that affected companies were entitled to receive "adequate compensation".
The deal announced on Friday will see the government pay a little over €2.43 billion to the four companies.
Vattenfall and RWE will receive €1.43 billion and €880 million respectively. Both companies are being compensated for the residual energy that they are no longer able to generate in their plants.
EnBW and Eon will be compensated €80 million and €42.5 million respectively for investments made on the basis of the abandoned 2010 decision to extend the lifetime of nuclear power in Germany.
In a statement, Vattenfall CEO Anna Borg said: "This is a conservative implementation of the (constitutional) court decisions in Germany that in the end is acceptable to us."
"We welcome the envisaged agreement as it puts an end to many years of costly and time-consuming disputes around the German nuclear phaseout."
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A similar statement released by RWE described the deal as an "important step towards creating legal certainty for all the players".
"It’s also a good signal to strengthen confidence in Germany as a place to do business and to boost the significant investments that must now flow into the restructuring of the energy system," the statement said.
The compensation package should spell the end to the long-running legal disputes that came as a result of the phaseout. Vattenfall, as a foreign company operating in Germany, has brought the German government before the International Centre for Settlement of Investment Disputes in Washington, seeking about €5 billion in damages.
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