German local utilities, renewables slam nuclear plan

MUNICH/DUESSELDORF (Reuters) - A decision to extend the lifespans of German nuclear plants in a two-tier strategy will create more dissent and discourage investment, associations for the country's local utilities and renewable industry said.

Chancellor Angela Merkel's coalition government agreed on Sunday to the plan after marathon talks laid the groundwork on energy policy.

"The government has been one-sided and took the position of the big energy companies," Stephan Weil, who heads the 1,370-company strong local utility association VKU, told Reuters on the sidelines of an energy conference in Munich.

"We are further than ever away from a consensus in society, ...that is a bad basis for investments," he said.

VKU companies, which turn over 92 billion euros ($123.4 billion) a year, had plans to invest in combined heat and power plants, a decentralized energy-efficient technology.

However, Weil said he expected legal battles over Sunday's decision to take two to three years resulting in delays to many projects.

"Societal and legal battles are on the cards," he said.

VKU companies have jointly applied for 3,500 megawatts of new capacity construction, worth 6.5 billion euros.

Merkel's plan, which is aimed at laying the groundwork for German energy policy to be revealed later this month, would allow four nuclear operators RWE, E.ON, EnBW and Vattenfall Europe to operate their reactors on average 12 years longer than planned.

Weil said a persistently high and longer share of nuclear power on transmission grids would deter the fast expansion of renewable energies.

The plans also drew protest from Germany's renewable energy industry that has grown to become a noticeable player in Germany, accounting for more than 16 percent of gross power consumption in Europe's biggest economy in 2009.

"The nuclear lobby has successfully put through its bold demands," Dietmar Schuetz, president of German renewable energy agency BEE, said in a statement published on Monday.

"This means that the government's energy concept becomes a farce."

A spokesman for SMA Solar, Germany's biggest solar company by market capitalization, also criticized the plans by the German government.

"In our view, the extension of lifespans for nuclear plants puts a damper on the expansion of renewable energy, which is why we're against it," Volker Wasgindt said.

Germany's solar industry has been suffering from a large cut in sector subsidies already, as Germany -- the world's largest solar market -- aims to boost the competitiveness of the industry.

(Reporting by Vera Eckert in Munich, Anneli Palmen in Duesseldorf and Christoph Steitz in Frankfurt; editing by Keiron Henderson)