Tue, Aug 09, 2011 - Page 10 News List

Bayer threatening to quit Germany over nuclear plan

SHUTDOWN:Bayer’s boss said the company may consider relocation to stay competitive if the country closes its nuclear power plants by 2022

The Guardian, LONDON

Germany’s decision to phase out nuclear power after the Fukushima Dai-ichi catastrophe in Japan could lead to some of the country’s major companies relocating elsewhere in search of cheaper energy.

“It is important that we remain competitive compared with other countries. Otherwise, a global company like Bayer will have to consider relocating its production to countries with lower energy costs,” said Marijn Dekkers, head of Bayer, the pharmaceuticals group.

HIGHER COSTS

Under a package of energy bills passed last month by the German government, all nuclear power facilities in the country will be taken offline by 2022. Analysts say that the move will hit energy companies hard and contribute to an increase in electricity prices.

Dekkers told the business magazine WirtschaftsWoche that Germany’s electricity costs were already the highest in the EU, making the country “unattractive” for the chemicals industry.

Bayer, which developed the first aspirin in 1897, employs more than 35,000 people in Germany. Dekkers said that his company was planning 4,500 job cuts worldwide — including 1,700 in Germany — but that it was already investing in emerging markets.

“Overall, we will create over 2,500 new jobs in countries like Brazil, India, Russia or China,” he told WirtschaftsWoche.

The report also quoted Robert Hoffmann, head of the communications company 1&1, saying that taxes to subsidize renewable energy sources were too high in Germany. Hoffmann said that his company drew energy from Norwegian hydropower plants, but that it still had to pay a contribution to German renewable energy costs.

SOLAR SUBSIDY

“Essentially, we’re subsidizing the construction of solar-powered roofs ... So we end up paying double,” he said.

In a report released last week, the Swedish energy company Vattenfall attributed a fall of 10.2 billion Swedish krona (US$1.58 billion) in operating profit for the second quarter of this year to “a one-off effect of the German parliament’s decision to phase out the country’s nuclear power.”

The move has also prompted concerns about disrupted power supplies. German transmission system operators have warned there could be a risk of power outages this winter, and have questioned the reliability of renewable energy sources.

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