German utility companies received a significant boost Friday after reports they will pay a less-than-expected levy into a national fund that will manage the storage of nuclear waste.
The €23.6 billion ($26 billion) price tag the companies will pay is about €3 billion less than the anticipated cost, reports indicate, and they'll be able to defer payments for up to a decade after making an initial instalment in January. A draft law seen by Bloomberg News showed the companies could make a first payment of 20% and they choose to pay in instalments.
The German government spurred a shift towards renewable energy after pulling the plug on nuclear energy in 2011 following the Fukushima disaster in Japan. Reactor owners have set aside €40 billion to pay for deactivating nuclear reactors.
A deal between companies and the government could give investors an indication of the costs of the risks associated with nuclear power. Nuclear power accounts for 14% of the country's electricity production.
E.ON recently spun off its fossil fuel division, known as Uniper. E.ON CEO Johannes Teyssen decided to spin off the fossil fuel generation and trading unit to give investors more choice and allow both companies' management to focus on growing businesses that he claims have little in common.
RWE, Germany's No. 2 energy company, is also planning to spin off its renewable energy business, to be called Innogy, though it will sell an initial stake of just 10% in an initial public offering.