London (Platts)--28Sep2010/718 am EDT/1118 GMT

Germany's cabinet approved Tuesday its new energy plan including the extension of nuclear power plant lifespans, the government said on its website. Chancellor Angela Merkel's 'Energiekonzept 2050' has the expansion of renewable energy at its core and aims to guide the country into a renewable energy age as soon as possible, while keeping power prices affordable, it said. To make this goal achievable, the government says it must extend the lifespan of the country's 17 nuclear reactors as a 'bridge technology into a renewable future' as outlined in the coalition treaty following last year's federal election. The government's new energy strategy also includes renovating power grids and improving energy efficiency, it said. Ministers meeting in Berlin signed off an accord forged earlier this month with the country's nuclear utilities to permit reactors built before 1980 to operate eight years longer than planned and newer plants up to 14 years longer, which would put Germany's exit from nuclear power back to 2036. To compensate for the longer runtimes, the four utilities that operate nuclear reactors--E.ON, RWE, EnBW and Vattenfall Europe--will have to share some of the extra profits and pay additional levies estimated at around Eur30 billion ($40 billion). The first payments will come as a levy on nuclear fuel rods that the government projects will produce Eur2.3 billion annually through 2016 and which is earmarked for reducing the budget deficit. On top of that, nuclear operators will contribute to a fund for renewable energy technology research through up-front payments of around Eur1.4 billion a year until 2016 and additional payments from 2017 of around half the extra profits linked to inflation and power price developments, it said. Overturning the nuclear phase-out law brought in by a coalition of SPD and Green party in 2002 and which envisaged Germany's full exit from nuclear power generation by 2022, is the most controversial aspect of Merkel's new energy policy. It divides not only ministers in her cabinet at times, but has triggered anti-nuclear protests and boosted the poll ratings of the opposition. To turn the bills into law, the government intends to use its majority in the lower house (Bundestag) to overrule the upper chamber (Bundesrat), where it is outnumbered by the opposition. But legal opinion is divided on whether Merkel can bypass the Bundesrat, where Germany's 16 states are represented, and the opposition has said it will challenge any such attempt on constitutional grounds. The nuclear-phase out law in 2002 was passed just by the Bundestag. --Andreas Franke, andreas_franke@platts.com Similar stories appear in Nucleonics Week See more information at http://www.platts.com/Products/nucleonicsweek/