FRANKFURT—A new German government report is stoking fears that the country’s energy companies can’t shoulder the cost of a government plan to close the country’s nuclear-power plants. Germany aims to phase out its nine remaining reactors by 2022, faster than almost any country. But nobody knows exactly how much it costs to shut and clean up atomic-power plants and all the facilities used over decades to store radioactive waste. Building a depository for the waste deep underground and delivering the waste add additional unknown costs.
Berlin promises utilities will foot the bill, but the new report, released Friday, raises the prospect of German taxpayers ending up on the hook.
The issue is particularly acute because German power companies are already struggling financially. Chancellor Angela Merkel’s campaign to wean Germany off nuclear and fossil fuels in favor of environmentally friendly renewables has gutted utilities’ traditional business model.
Utility executives say more specifics on plans are needed.
“There are still no clear answers to many fundamental questions involving final and intermediate storage, dismantling [reactors] and transporting radioactive waste,” said Frank Mastiaux, chief executive of EnBW Energie Baden-Württemberg AG, one of Germany’s largest utility companies. “Concrete concepts have long been promised, but there is nothing yet in sight.”
Nuclear energy accounts for about 16% of German electricity production, down from a peak of 31% in 1997, according to the federal statistics office. France gets roughly 75% of its electricity from nuclear energy and the U.S. around 20%, according to the World Nuclear Association.
The issue of Germany’s decommissioning became urgent in 2011, after the disaster at Japan’s Fukushima power plant, when Ms. Merkel decided to accelerate the shutdown of all German reactors by as much as 14 years, to 2022.
That move forced EnBW and Germany’s other big utilities—E.ON SE,RWE AG and a unit of Sweden’s Vattenfall AB—to book billions of euros in write-downs on nuclear assets and increase their provisions for early decommissioning of the facilities. The provisions now total about €37 billion ($40 billion).
The cost could ultimately top €50 billion, estimates Gerald Kirchner,a nuclear expert previously at Germany’s federal office for radiation protection.
And that money might have to be covered by taxpayers if a power company faces insolvency or some other scenarios, the government report warned.
“Based on the current legal situation, there are risks that the financial provisions set aside by the nuclear operating companies aren’t sufficient and therefore it can’t be ruled out that, in a worst-case scenario, significant costs...could fall on the public,” said the report commissioned by the economy ministry and prepared by lawyers, auditors and tax consultants.
Utilities are seeking to reassure investors that the companies’ financial liability isn’t crippling.
“We are convinced, to the best of our knowledge, that the provisions are sufficient,” said RWE executive-board member Rolf Martin Schmitz.He said costs directly linked to decommissioning are fairly predictable. Less certain are costs “dependent on political conditions,” particularly related to final disposal of waste.
The energy companies are being pummeled by falling electricity demand in Europe and billions of euros in government-subsidized so-called green energy flooding the power grid. Both effects are eroding wholesale power prices, leaving conventional power stations unprofitable. And because big, complex projects often go over budget, pledging that decommissioning “won’t cost taxpayers any money is very optimistic,” said Equinet analyst Michael Schaefer.
Germany isn’t alone in tackling decommissioning. The International Energy Agency says roughly half of the world’s 434 nuclear-power plants will be retired by 2040. Most are in Europe, the U.S., Russia and Japan.
Despite this global trend, no country yet has a site ready for final disposal of radioactive waste.
Germany is trying to find a deep geological site suitable to store highly radioactive waste for about one million years—the time waste needs to become safe to most living organisms. The country expects about 600,000 cubic meters of radioactive waste by 2080. And that doesn’t include more highly radioactive waste slated to be shipped back soon from France and Britain, where German nuclear fuel had been sent for reprocessing.
“There has been no outward, visible progress on the question of where to store the nuclear waste,” said Matthias Lang, a Düsseldorf-based attorney at law firm Bird & Bird.
In 2013 Germany restarted its long-running site search because of public concerns about a tentative selection. The government now aims to designate a disposal site by 2031, though subsequent geological exploration and construction could delay any opening to about 2050.
Until a final disposal site is found, all waste will be stored temporarily. Keeping interim facilities safe is expensive. E.ON has said delays in finding a disposal site will cost the German nuclear industry €2.6 billion.
Utilities have sued the German government to recover some cleanup costs, but verdicts could be years away. And their efforts face political opposition.
“The government needs to wake up and prevent the companies from relegating their nuclear legacy to us taxpayers,” said Sylvia Kotting-Uhl, a parliamentarian representing the Green party.
—Christian Grimm contributed to this article.
Write to Natalia Drozdiak at natalia.drozdiak@wsj.com and Jenny Busche at jenny.busche@wsj.com