German cabinet backs nuclear exodus by 2022

German Chancellor Angela Merkel (L) welcomes Environment Minister Norbert Roettgen during the a cabinet meeting in Berlin, June 6, 2011.

BERLIN (Reuters) - Germany's planned exit from nuclear power received backing from the cabinet on Monday, the economy and environment ministers said in Berlin.

The far-reaching energy strategy, spurred by the crisis in Japan, reverses longer life cycles granted to nuclear power stations only last autumn.

It will entail changes to power grid expansion plans and the subsidy system for renewable energy such as solar and wind.

The ruling Christian Democrats and their coalition partner the Free Democrats are to discuss details separately, such as the schedule of the nuclear power station phase-out and whether some capacity will remain on stand-by to safeguard supply.

Chancellor Angely Merkel on Friday agreed with state premiers on a phased exodus of nuclear which supplied 23 percent of German power last year and to stick to plans to more than double the share of renewables to 35 percent by 2020.

This came after a decision on May 30 to phase out nuclear by 2022 and leave eight suspended plants shut for good.

Both chambers of parliament have to agree a change of course on energy strategy by the parliamentary summer break in July.

Shares in E.ON and RWE were down 1.9 and 1.2 percent at 0900 GMT, while renewable stocks Phoenix Solar and Nordex were up 1.1 and 5.1 percent and Solarworld off 0.40 percent.

The government dropped plans to add a further cut to incentives for photovolatic energy.

Wholesale power markets were drifting lower on Monday. The benchmark Cal '12 position in Germany was at 59.15 euros a megawatt hour, down 60 cents from Friday. Traders said much of the nuclear news had been priced in when the contract hit 60 euros in early April.

Deutsche Bank said on Friday the plan is likely to lift power more long-term, by 5-6 euros from 2012-2014.

Some analysts estimate utilities risk losing billions of euros in earnings but they point out that there will be offsetting factors such as greater opportunities for renewables.

(Reporting by Andreas Rinke, Markus Wacket, Gernot Heller, Chris Steitz, Vera Eckert; editing by Jason Neely)