Germany’s highest court ruled on Tuesday that speeding up the shutdown of nuclear plants after Japan’s Fukushima disaster violated some property rights, paving the way for damage claims and sending shares in utilities E.ON and RWE higher.
E.ON, RWE and Vattenfall [VATN.UL] sued the government over the landmark decision, arguing the move to shut down all nuclear plants faster by 2022 represented expropriation.
Utilities have put total damages at up to 19 billion euros, but it was clear ahead of the court’s decision that such a sum represented their maximum demand.
Furthermore, the law did not include compensation for lost investments made by the utilities in “good faith” in 2010, when an extension to the life spans of nuclear power plants was agreed. For a factbox on pending cases:
Shares in E.ON and RWE jumped on the news and were up 5.6 and 4.3 percent at 1107 GMT, leading European shares.
However, the utilities should not expect any sizeable sums to come their way quickly, experts said.
“Setting rules for compensation can take several years and it is unclear how much money the companies will be awarded,” said Roland Vetter, of PraXis Partners, a London-based utilities investment specialist.
“Still, it is positive for RWE and E.ON because the potential sum may be relevant and can help with their market capitalization.”
Berlin in 2011 said nuclear risks had changed as a result of the Fukushima meltdown, caused by a tsunami following a 9.0 magnitude earthquake. Its move to hasten the shutdown of nuclear power plants has been welcomed by a majority of German voters.
The utilities need money as they must start contributing next year to a 23.6 billion euro fund in exchange for shifting liability for nuclear waste storage to the government.
This was agreed with the government in October, removing uncertainty about a major drag on utility stocks.
The government must provide new legislation to regulate the nuclear exit by June 30, 2018, the court ruled on Tuesday.
