Angela Merkel's cabinet has approved a new energy plan that extends a deadline to shut down nuclear reactors. But the decision comes at a cost to nuclear utilities, as the state will collect over 50% of the profit from longer operation.

E.ON, which operates six of Germany’s 17 nuclear reactors, said: “This will pose a considerable challenge for nuclear operators. In the interest of an energy consensus, E.ON and the other operators have accepted these government demands and support the establishment of a fund to develop innovative energy technologies.”

Nuclear utilities will be required to pay EUR 300 million into this so-called ‘renewables fund’ in 2011 & 2012, and EUR 200 million annually thereafter.

In addition, there will be a EUR 2.3 billion nuclear tax, set at EUR 145/g uranium, which will run for six years. After 2017, utilities will also have to pay a cEUR 9/MWh charge on nuclear output.

The new German energy strategy also includes plans to reduce greenhouse gas emissions by at least 80% and to generate 60% of its power from renewables by 2050.