Limiting plant life by calendar years distorts competition

If the service life of German nuclear power plants were limited by law to a period of thirty calendar years, plant operators would suffer a loss of DM 28.8 billion. This is the result of a calculation performed by the Zentrum fuer Europaeische Wirtschaftsforschung (Center for European Economic Research, ZEW) in Mannheim. The Institute based its calculation on the premise that it takes forty years for the income from plant operation to balance the total cost incurred in construction and operation of a nuclear power plant. On the basis of this method, a comparison between thirty calendar years of operation and thirty full-power years of operation shows a calculated loss of DM 13.7 billion. It is also interesting to note that the calendar year method, were it to be used as a basis for an opt-out scenario, also should cause major distortions of competition among the electricity utilities owning the nineteen German nuclear power plants. The reason is that a number of nuclear power plants in the past attained lower availabilities, as a result partly of defects, partly of outages ordered by the authorities, which they were never able to recoup entirely in subsequent operation. According to ZEW calculations the losers, in case an opt-out were to employ the calendar year criterion, would be HEW and Neckarwerke, while PreussenElektra, Isar-Amper-Werke and the Unterweser Joint Nuclear Power Station would rank in the middle. RWE and VEW turned out to be affected least by this opt-out scenario. ZEW therefore recommends that politics, if it was bent on opting out of the peaceful uses of nuclear power, should do so on a basis less likely to affect competition. Full-power years of operation would be a better criterion to be used. Although cost differences existed between individual utilities even in that case, the margins were clearly lower than in the calendar year scenario. (orig.)