Germany to phase out its nuclear stations over 20 years

The single biggest retrenchment of the global nuclear industry has come with Germany's decision to phase out its 19 nuclear power stations, almost at a rate of one a year for the next 20 years.

It is the first leading global economic power to renounce the use of nuclear energy, which accounts for almost a third of its energy supply. Yesterday's early-morning agreement has dealt a major blow to British Nuclear Fuels Ltd and placed a further question mark over the future of Sellafield's reprocessing activities.

Most significantly from the BNFL perspective, the four energy companies party to the deal reached with the German government will end reprocessing of their nuclear fuel after 2005, and "use all measures contractually acceptable to their international partners" in Britain and France to bring an end to it sooner.

Germany, one of Sellafield's biggest customers, had already suspended contracts with BNFL after it emerged that test results were falsified. The British company was about halfway through its contracts, and a spokesman stressed they were legally binding. "We expect all our contracts to be honoured," he said.

Germany's Christian Democratic opposition and environmentalists were highly critical of the outcome after 18 months of difficult negotiation. The head of the Bavarian state chancellery, a Christian Social Union member, Mr Erwin Huber, said it marked a "historic day in the negative sense" and would lead to "increased dependence on energy from outside Germany".

The main German environmental group, BUND, deplored what it called the "guarantee of existence" the agreement gave nuclear power plants. Meanwhile, Greenpeace claimed that the government's control over security at plants was undermined by the agreement. The deal allows nuclear power companies to shift the permitted remaining atomic energy output from a plant that has closed to another station, meaning the absolute deadline for total nuclear shutdown could still be pushed back.

Germany will close down its nuclear plants after a life-span of 32 years. The plan fulfils a pledge by the Social Democrat-Green coalition government to phase out nuclear energy production. The last station is due to close in 2021 and the first in 2002.

With an end to reprocessing, a decision on how to store German nuclear waste in the long term faces the government. The German parliament will have to adopt a law on shutting down the reactors as well as nuclear research.

For the Greens, who appeared largely unable to influence the policies of the Schroder government, the deal is considered a political lifeline. The Chancellor, at the news conference, declared himself "satisfied" with the deal but industry leaders said they regretted the early closures. The German company Siemens, which builds and services nuclear stations, said its domestic business would gradually decline and it would seek to expand its overseas nuclear activities.

"The last word has not been said" on the issue, since the agreement could be revised or even reversed by future governments, said Mr Wolfgang Breyer of Siemens's energy unit, KWU. It was not compatible with commitments to reduce carbon-dioxide emissions and increased demand for energy in Germany could not be met with fossil fuels.

"The importance of nuclear energy will increase, not decrease," he predicted.

Additional reporting: AFP