The auditing company Warth & Klein Grant Thornton in its report also includes sensitivity calculations. These show the changes in provisions, if other than the long-term observable data of discount rate and inflation rate are applied, resulting in a range of 29-77 billion euros that will be needed.
“With regard to these sensitivity analyses it is important to remember that discount and inflation rates should be derived using a similar methodology and viewed together. This is the approach used by German nuclear power plant operators. They assume a real interest rate – derived from discount and inflation rates – of +1% on average. This conservative figure reflects the principle that the accounting treatment of provisions should be cautious,” says Alexander Jung, Vattenfall’s Head of PRA and Media Relations in Germany.
Nearly 39 billion
Jung explains that the nuclear power plant operators have set aside a total of nearly 39 billion euros in provisions. The provisions will also finance intermediate and final storage facilities for radioactive waste.
“The debate about the robustness of the system with nuclear provisions started in 2011, after Fukushima, when the nuclear companies faced a new situation due to the accelerated phase-out of nuclear energy in Germany. Combined with deteriorated market conditions, this led to a public debate on the security of the nuclear provisions. The government decided to commission an audit earlier this year. The auditor has now come to the conclusion that the current provisions are within an accepted range of meeting our obligations to finance future costs for decommissioning as well as storage facilities.”
More attention needed
Although nuclear power in Germany will be completely phased out by 2022, the process for decommissioning and dismantling the power plants is an aggravating factor.
“A national storage facility for low and intermediate radioactive waste will not be in use at that time which means that we will have to construct interim on-site storage options. The situation for a final repository for high radioactive waste is even more complicated as research has been started recently all over again,” states Jung who wishes for an increased focus on the matter of storage options.
“We, the nuclear power operators, need a certain planning security to conduct the phase out and decommissioning of nuclear power in Germany.”
Vattenfall has set aside roughly 3 billion euros in provisions.