File: German Chancellor Olaf Scholz speaks at the upper House of parliament Bundesrat in Berlin, Germany February 11, 2022. Image Credit: Reuters

German Chancellor Olaf Scholz ordered an extension in the life of the country's three remaining nuclear plants until mid-April 2023 — a dramatic reversal of an earlier decision by Vice Chancellor and Economy Minister Robert Habeck — as the country faces an unprecedented energy crisis.

Scholz's decision late Monday after days of speculation is designed to end a standoff between his two coalition partners, the Greens and the Liberals. While Habeck's Greens are ideologically opposed to nuclear power, the business-friendly Free Democrats under the leadership of Finance Minister Christian Lindner argue that Germany should use all the generation capacity available to tackle the crisis.

Habeck, who is also responsible for energy in the cabinet, had initially planned for only two of the three remaining plants to operate until April at the latest — EON SE's Isar 2 and EnBW AG's Neckarwestheim 2, which are both in southern Germany. Lindner pushed for all three to run until 2024, including a facility in Emsland, in the northern state of Lower Saxony, operated by RWE AG.

"It is in the vital interest of our country and its economy that we maintain all power generation capacity this winter," Lindner said in a statement. "The chancellor has now provided clarity."

'Smart Compromise'

At a party convention last weekend, the Greens again voted against an extension of nuclear power.

"We note that Chancellor Scholz is exercising his authority to set guidelines," Katharina Droege, head of the Green parliamentary group, wrote on Twitter. "It's unfortunate that Scholz and the SPD are apparently willing to put the Emsland nuclear power plant into reserve operation, although there is no objective reason for this."

Habeck appeared to strike a pragmatic tone in an interview with public broadcaster ARD late Monday. He described Scholz's decision as a "proposal," which he could work on and live with. He added the plan was not without some risks, but he would now lobby to support this path.

Germany agreed to the current timeline to phase out nuclear power in the aftermath of the Fukushima disaster in 2011, but Scholz's government has come under mounting pressure to shore up alternative sources of energy that don't use expensive natural gas.

Even though Germany's gas-storage facilities are more than 95% full, the grid operator has warned that it may not be enough to cope with winter demand. The nation's four transmission operators had also called for all three plants to be kept running until spring to ease Germany's power crunch.

The decision is a "smart compromise" to safeguard energy supplies, Klaus Mueller, president of the Federal Network Agency, said on Twitter.