Germany Faces Sticker Shock Over Renewable Energy To Replace Nuclear

On 30 May, in the aftermath of Japan’s Fukushima nuclear disaster, German Chancellor Angela Merkel announced that Germany would close all of its 18 nuclear power plants between 2015 and 2022, which produce about 28 percent of the country’s electricity.

Eight have now been taken offline, and with the winter coming on Berlin is scrambling to make up the energy shortfall lest the country suffer blackouts combined with the need to import massive amounts of electricity.

image via Shutterstock

Despite Germany’s Kreditanstalt fur Wiederaufbau (German Development Bank) being set to underwrite renewable energy and energy efficiency investments in Germany worth $137.3 billion over the next five years, Merkel’s government has now announced that in addition to going green, it will also build a dozen coal-fired power plants as part of the country’s future energy mix. In order to assure the energy transition, the government also plans to subsidize new natural gas power plants as well.

Now the consequences of the 30 June Bundestag law phasing out nuclear power are impacting. On 19 October Germany’s Minister of Economics and Technology Philipp Roesler somberly told Parliament, “The real work starts now,” adding that the ministry now had the goals “To ensure the security of the energy supply and to protect the environment, within acceptable financial conditions.” Afterwards, Environment Minister Norbert Roettgen told legislators at the same session, “Renewable energy and energy efficiency are the two pillars of the new energy policy.” The next day Roesler in the company of Finance Minister Wolfgang Schaeuble in a joint press conference informed reporters that Germany had sharply lowered its 2012 growth forecast to 1 percent. In April, the month following Fukushima but before the German government decided to phase out nuclear power, the Economy Ministry had predicted a 2012 growth rate of 1.8 percent.

The government’s newly pragmatic approach contrasts with the hopes of many environmentalists, who believe that Germany now has an historic opportunity to embrace renewable power rather than pursuing the retrograde step of commissioning new coal burning power plants.

But government ministers are increasingly concerned primarily with ensuring the security of the nation’s energy supply, even though the 30 June legislation mandated that Germany’s share of energy from renewable sources must increase from 17 percent to 35 percent in 2020 and reach 80 percent by 2050. A modest start has already been made, as since the eight reactors were closed Germany increased its share of electricity produced from renewable energy sources from 17 percent to 20.8 percent.

But the renewable power sources will be costly. On 19 October the German Association of Industrial Energy and Power Users complained that electricity price had increased even though its quality has decreased and noted that next year its members will see their electrical power invoices increase by 9 percent.

As for the economics of the shift, electricity from conventional coal fired plants costs roughly $83 per megawatt-hour, the price increases roughly 50 percent to $124 per megawatt-hour for wind energy, $207 per megawatt-hour for offshore wind power, and $268 per megawatt-hour for solar, the last more than three times the cost of coal-fired electricity.

Despite that renewable energy has such high differential costs, most Germans accept it. According to a recent TNS Infratest survey, 79 percent of Germans polled felt that the “new energy” fees were “reasonable,” with only 15 percent considering them “too high.” Germany Trade & Invest economic development agency photovoltaic-industry expert Tobias Homann said, “With the decision to abandon nuclear power earlier this year, it was clear that the road ahead would be challenging. But Germany is in a very promising position to be the first industrialized country to rely entirely on renewable energy.”

Despite the cost associated with renewable energy Germany is one of the world’s largest producers of wind power, with 27 gigawatts of generating power installed, roughly 16 percent of the world’s current wind power generating capacity in the world, making it Europe’s biggest consumer of electricity from wind power.

In the new austere Germany, the shift to renewable energy sources comes at a bad time for the exports-driven German economy, as increased energy costs can only add to the expensiveness of exports. Needless to say, despite Germany’s commitment to preserving the euro, further uncertainties are introduced into German economic long-range planning.

Economic teething problems aside, Germany’s abandonment of nuclear power and embrace of renewable energy will be closely watched around the world not only by nations but the globe’s nuclear and renewable power industries. While startup costs and transition problems have yet to be resolved, Germany is betting on its future, and future generations using solar and wind power will not have to bury energy wastes with a half-life of tens of thousands of years.

Editor’s Note: This column comes to us as a cross post courtesy of our new partners at OilPrice.com. Author credit for this column goes to John Daly.

OilPrice.com is the fastest growing energy news site online. Our analysis focuses on Oil and Gas, Alternative Energy and Geopolitics.

    • Anonymous

      Yep, more CO2 emissions AND much higher power costs AND much greater risks and impacts to public health and the environment, as Germany’s nuclear power is replaced mostly by fossil fuels.u00a0 That along with more geopolitical dependence on Russia.nnBeyond stupid.u00a0 Downright immoral, actually.u00a0 A huge step backward.

    • BlueRock

      > …with the winter coming on Berlin is scrambling to make up the energy shortfall…nnNonsense.nn* Germanyu2019s nuclear phaseout was the right thing to do. “Germany is a long-time net exporter of electricity and continues to be one — even after Fukushima. … The future of nuclear power was yesterday. Germany has entered the race to the age of renewables. … This is exactly what status-quo interests are afraid of. They better be.” http://www.grist.org/nuclear/2011-11-02-germanys-nuclear-phaseout-right-thing-to-donn> …it will also build a dozen coal-fired power plants as part of the countryu2019s future energy mix. nnWhere is the evidence for this? The best I can find is a story that appears to originate in Rupert Murdoch’s WSJ – and even that notes that the plants will likely be natural gas. It also states that GHG emissions will be reduced by 40%.nn> …the government also plans to subsidize new natural gas power plants as well.nnYes. Natural gas plants are the best ‘stepping stone’ to 100% renewables – about half the CO2 of coal and able to spin up and down on demand.nn> In April, the month following Fukushima but before the German government decided to phase out nuclear power, the Economy Ministry had predicted a 2012 growth rate of 1.8 percent.nnIs the author suggesting that the only thing that drives economic growth is the presence of nuclear reactors?! Laughable.nn> The governmentu2019s newly pragmatic approach contrasts with the hopes of many environmentalists…nnNo, it does not. The German Green Party fully support the closure of Germany’s nukes and subsequent massive investment in renewables.nn> A modest start has already been made … its share of electricity produced from renewable energy sources from 17 percent to 20.8 percent.nnA jump of 3% from RE in a few months is “modest”?! This article becomes more ridiculous.nn> But the renewable power sources will be costly.nnAnd is the only factor *cost*? Are there also economic benefits in jobs, exports, clean air?nn> …79 percent of Germans polled felt that the u201cnew energyu201d fees were u201creasonable,u201d…nnYes, the German people are well-informed and overwhelmingly support the rapid transition to a renewable energy economy.nn> In the new austere Germany…nnWhat?! Germany is one of the wealthiest, most advanced countries on the planet. It still is. This author is making it up as he goes along.nn> …further uncertainties are introduced into German economic long-range planning.nnYes, the “uncertainty” of how quickly renewable energy continues to fall in cost. Nice problem to have. While the rest of us wonder how fast fossils and nukes continue to climb.nn> …startup costs and transition problems have yet to be resolved…nnWhat?! Examples? Evidence? Anything?!nn> …future generations using solar and wind power will not have to bury energy wastes with a half-life of tens of thousands of years.nnIt’s 100,000+ years for high level nuke waste.nnFinally, what matters is trajectory toward 100% renewable energy. Short-term fluctuations are irrelevant. Germany has a plan to achieve that. USA, Canada, Australia, etc. have close to nothing, so it’s puzzling why so many people appear furious at Germany’s energy policy. It’s almost as if they aren’t really interested in Germany’s CO2 emissions, but rather they are angry that Germany is abandoning nukes which will prove a lot of people wrong as Germany demonstrates it is the right choice to make.nnThis article is awful. It’s a series of flawed and unsubstantiated claims, padded out with vague, anti-renewable polemics. Poor choice, EarthTechling editor.

      • Chris

        So many things to counter….nn1. The reference to the “new austere Germany” has to do with the changes being implemented due to the debt crises of several of their EU member states. u00a0The EU is moving towards an austerity measure, as a whole, with Britain the sole dissenter. u00a0You apparently missed that.n2. You post a link to an article from July, to counter something being posted in December. u00a0The point of the December article is to show that Germany is having to modify their plans somewhat to adjust to a changing situation.n3. “The governmentu2019s newly pragmatic approach contrasts with the hopes of many environmentalists” is a reference to the NEW policy, not the one from July. u00a0The government is changing its approach, to include fossil fuel plants, and no, environmentalists aren’t happy with that.n4. “A jump of 3% from RE in a few months is “modest”?! This article becomes more ridiculous.” – You do realize that total electrical power production during this period actually went down, yes? u00a0They shut down 8 nuclear plants, and thus changed the percentage. u00a0They did not markedly increase their renewable source production during this same period. u00a0It remains to be seen how they will replace this production, but some indicators suggest they will replace it primarily with fossil fuels, in the short term.nnGermany is moving in the right direction. u00a0They are having to adapt to a changing economic environment, and so far all indications are they will do so effectively. u00a0They may not hit 80% by 2050, but the technology is changing rapidly enough that any prediction out that far is rife with assumptions. u00a0For all we know they may be able to hit 100% by 2040, with some technological breakthroughs.nn

    • BlueRock

      P.S. A far better analysis, including fussy details such as evidence and credible cites:nn* In Germanyu2019s Nuclear Phase-Out, Renewable Energy Plans Are Clear. “…a nuclear phase-out by 2017, even faster than the current government plans, would be feasible without negative climate impacts.” http://www.wri.org/stories/2011/06/germanys-nuclear-phase-out-renewable-energy-plans-are-clear