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Vattenfall 'may gain' from German nuclear move

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Vattenfall 'may gain' from German nuclear move
A Vattenfall nuclear power plant in Germany
12:29 CEST+02:00
Swedish energy giant Vattenfall may end up benefiting from a recent decision by Germany to ditch nuclear power, according to the company's CEO.

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.

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.

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