The decision by the new German government to extend the lifetime of Germany's nuclear power plants beyond the planned phase-out by 2021 is destabilizing the electricity sector, Stephan Kohler, the head of Dena, has warned.

Kohler was quoted by the Berliner Zeitung newspaper as saying that German energy companies are delaying investments in new, efficient coal- and gas-fired power plants across the country.

He urged Berlin to hold on to the phase-out plan or at least quickly decide which nuclear plants are to live longer to prevent an "electricity gap." Kohler has in the past warned that the future German energy demand might outperform generation capacities.

The German Environment Ministry has previously denounced Dena's numbers, arguing that energy efficiency improvements and renewable energy sources can close the gap.

Dena is financed by the German federal government as well as major German banks and insurers.

Dena is currently updating its yearly power plant study and has calculated that power generation capacities of up to 14,000 MW -- around 10 to 12 large power plants -- will be lacking in 2020.

This is due also to a string of failures when it comes to getting the permits for new power plants.

Eon, the world's largest privately held utility, has had to stop construction work at its 1,050 MW coal plant in Datteln, North Rhine-Westphalia, because of opposition from local farmers.

One of Eon's showcase projects, the Datteln plant was due to boast an impressive efficiency level of 46 percent and feed the heat produced during the power generation process into the local grid. Construction was started in 2007, with 1,500 people working on the site. The Duesseldorf-based utility wanted to shut down an older coal plant in exchange, but a court halted the $1.8 billion project that has employed some 1,500 people. The future fate of the Datteln plant remains in limbo -- even a costly demolition of the site isn't ruled out.

"We are risking a significant uncertainty on the investors' side, with potentially massive effects on the entire economy," Christa Thoben, the economy minister of the state of North Rhine-Westphalia, told German news magazine Der Spiegel.

All over Germany, coal-fired power plants are running into opposition.

In Saarland, RWE had planned to modernize its 430 MW power plant and enlarge it to more than 2,000 MW, but a public petition stopped the project in late 2007. EnBW had to scrap its plans for a similar plant near Mannheim because of public protests.

A total of 10 coal-fired power plants have been stopped by court decision, because they failed to get authorities' clearance, and even because of strategy changes

Danish energy giant Dong wanted to build an 850 MW plant in Emden, Lower Saxony. The company dropped the project last month, citing environmental reasons. The company intends to concentrate efforts on generating green energy and reducing carbon-dioxide emissions. A coal-fired power plant does not fit into that strategy.

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