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Vattenfall 'may gain' from German nuclear move

TT/The Local/dl · 7 Jun 2011, 12:29

Published: 07 Jun 2011 12:29 GMT+02:00

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While the German decision will be costly for Vattenfall initially, CEO Øystein Løseth believes the German state has a responsibility to help the company ease the financial fallout.

"We're expecting compensation from the German state," Løseth told the TT news agency when commenting on the decision.

Since 2007, Vattenfall has invested around 6.3 billion kronor ($1.02 billion) getting its German nuclear power plants in order – spending which can now be considered money washed down the drain for the Swedish state-owned energy giant.

However, there is an upside to the German decision, according to Løseth, in that Vattenfall's other operations, such as coal-generated power plants, will become much more valuable.

"There's no doubt that there will be an increase in value," he said, adding that it was still too early to say for sure whether or not the increase would mitigate the costs related to shutting down the company's nuclear power operations in Germany.

One of the factors that would affect whether or not Vattenfall could ultimately benefit is the outcome of compensation negotiations with the German state.

In a statement issued on Tuesday, Løseth said he expected "fair treatment" from the German state in negotiations over financial compensation.

Vi förväntar oss en rättvis behandling och att vi blir finansiellt kompenserade med anledning av det tyska beslutet, säger VD Øystein Løseth.

Germany's decision has already had an effect on electricity prices – effects which show up in trading of future electricity deliveries.

And electricity on the continent will likely be more expensive, according to Løseth. However, prices in Sweden are more affected by the weather.

"A wet autumn has greater significance and probably results in lower prices than what we've had during recent winters," he said.

According to Løseth, the Germany's nuclear decision won't bring about any changes in Vattenfall's overall strategy.

Story continues below…

Nor has he received any new directive from Vattenfall's owners – the government and the Swedish state.

Løseth theorised that Vattenfall's coal operations may also become even more important for Germany in the wake of the nuclear decision.

Despite Germany's move to shutter its nuclear power plants, Løseth doesn't see any plans for Sweden to follow suit.

TT/The Local/dl (news@thelocal.se)

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Your comments about this article

15:30 June 7, 2011 by Vietvet
Nuclear power concerns me greatly. The byproduct of it is waste that will not be safe for around 10,000 years. Sweden, in the 70s, voted to ban it and see how that worked out.

Why doesn't Vattenfall invest more in renewable energy? I know they are doing it, but it is a very low percentage of their investment towards new power generation systems.

I live out in the countryside where vast tracts of land have been logged to bare earth. No one can see this as it is so far from housing, but why not take these tracks and put up windmills? No one would see it, it is renewable, and does not create byproducts which would be unsafe for 10,000 years?

Österhamn, by the way, if you want it underneath you, you are crazy.
10:19 June 8, 2011 by Rey Stockholm
The fundamentla problem is that wind is not reliable - you can build a million fans but what happens when the wind does not blow ? which is veryoften. They are less than 20% efficient and send everyones bills higher due to subsidies- Even then you still need huge amount of back up for these turbines which defeats the purpose
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