Germany’s Nuclear Power Predicament

A couple of months after Japan's earthquake-tsunami-nuclear disaster, Germany made headlines by announcing plans to pull the plug on its dependence on nuclear energy. The country said that eight plants would go dark immediately, and that the remaining nine would be shuttered by 2022.

The Fukushima crisis in March was enough to tip the political scales away from a policy that has long divided Germans. (See: What Nuclear Loses, Green Gains.)

That decision has had some strange, if not downright ironic, consequences for Europe's economic powerhouse. Nuclear energy accounted for about 28 percent of Germany's power, according to some reports. That's a pretty hefty amount to replace. There were, of course, promises for alternative sources — the idea of generating more wind power from farms in the North and Baltic seas has some folks incredibly excited — and calls to reduce electricity use with more energy-efficient buildings, homes, and machinery.

But what is Germany doing, at least for now? It's purchasing atomic power from its neighbors, particularly France and the Czech Republic. And it's extending export credit guarantees for the construction of nuclear facilities in “politically and economically important” countries like Brazil.

Yeah, that made me go hmmmm, too. How can you halt a nuclear energy plan for concerns about potential hazards in one breath and then support other countries that generate power this way in another? But what's the alternative?

I'd be remiss if I didn't touch on the cost of decommissioning plants and moving energy production elsewhere. Obviously, there are immediate direct costs associated with taking a functioning operation and hitting the giant “Stop” button, but what caught my eye are the soft costs, like the lawsuits that follow when lots of people's livelihood is suddenly yanked from under them, along with the cost of future power generation from other plants.

This report from the World Nuclear Association has some shocking stats about the financial rut Germany may face if the phaseout continues. Though it's in the association's interest to paint this kind of picture (it is the World Nuclear Association), the following sentences grabbed my attention:

The country's four nuclear power utilities are pressing claims for compensation and in particular are suing the government over continuing with the nuclear tax introduced in relation to the 8- and 14-year licence [sic] extensions agreed in September 2010. Claims for compensation will be on the basis of write-down of plants, cancelled upgrades which were in train following the September 2010 policy change, and decommissioning costs brought forward… The German government appears to be facing claims of over EUR 10 billion [$13.3 billion]
In September 2011, a study from KfW Bankegruppe, which supports domestic developments, said that about €25 billion per year will be required to meet the government's nuclear phase-out goals. It puts the total investment at €239-262
[billion] by 2020. This includes up to €10 billion on fossil fuel plant, €144 billion on renewables plant and up to €29 billion on 3600 km of high-voltage transmission lines. The bank noted that large capital-intensive projects have a tendency to go over budget.

There are some other longer-term issues being hinted at, as well — like the probability of Germany missing its 2020 greenhouse-gas reduction targets without nuclear energy. You can't get more ironic than that.

Personally, I applaud Germany for going this route. The world — IMHO, FWIW (in my humble opinion, for what it's worth) — should be innovative enough to come up with cleaner, greener ways of satisfying its insatiable demand for energy.

But I'm also keen enough to weigh the pros and cons of decisions like this. Shutting down one plant out of potential fear (and, yes, potentially devastating and fatal consequences when things go terribly wrong) and replacing it with utilities that choke any progress on legitimate green efforts doesn't make any sense. It's sort of like robbing Peter to pay Paul, or however that saying goes.

What's true, too, for Germany (and for Europe as a whole) is that you cannot have it both ways. People, companies, and factories need power, and power has to come from somewhere. But where?

In my next blog, we'll go beyond Germany and look at the UK's plan, Switzerland's nuclear phaseout, some other interesting energy projects happening elsewhere in Europe, and what's at stake for the high-tech sector.

18 comments on “Germany’s Nuclear Power Predicament

  1. prabhakar_deosthali
    November 30, 2011

    In my opinion this is  a very bold decision by Germany and by declaring such a strategic decision, the German government must have thought thru' all the pros and cons of doing away with the power generated using Nuclear energy. Germany has 10 years to implement alternate power genration technologies and I am sure once a nation like Germany decides on something there won't be any backtracking.

    This reminds me about the announcement the then US president made about Man landing on moon. Looked like one of an impossible dream ! but America made it happen!

    So will the Germans.

    The new Clean technologies for power genration are definitely going to get a big boost by this German move.

    In India similar sentiments are gaining support   aganist setting up of new nuclear power plants.

  2. saranyatil
    November 30, 2011

    The idea is really amazing and the thought put in considering the welfare of the nation, I would say hats of Germany for this decision.

    At the same time just wondering on the aftermath of pulling down the plants like you mentioned about jobs power loss, i think they might employ them elsewhere considering their livelihood.

    Its difficult to find a green source of power at this point in time might be once there is rigorous effort put in R&D in such development of alternate source of power. I think SOlar can be one amoung them.

  3. Barbara Jorgensen
    November 30, 2011

    This is a tough one. I was strictly anti-nuke until I read an article from a former Greenpeace leader that made a compelling argument for nuclear power. One of the points was, at least in the US, not a single death has directly been tied to a nuclar power accident. (We are very good at NIMBY–not in my back yard.) Japan and the Soviet Union have not been so lucky. When something goes wrong, the results are almost impossible to control. Dismantling an infrastructure like Germany's is a daunting task. Ultimately, hats off to germany for making a gutsy decision. But at what cost?

  4. Himanshugupta
    November 30, 2011

    Barbara, you are right that Japan and Soviets have not been so lucky. From the articles that i have read, nuclear is one of the cheapest and (arguably) safe long term option. It is as safe as air-travel as compare to train-travel or road-travel. Developed country like Germany can probably cope with bit expensive energy or buy it from its neighbor, France, who ironically create a large part though nuclear but developing nations have nowhere to go other than nuclear, i guess.

  5. Ms. Daisy
    November 30, 2011

    The Germans nuclear predicament is now becoming the future problem of developing economies like Brazil. The kicking the cann down the road, or the not in my backyard attitude by germany to transfer nuclear plants to places like Brazil is hypocritical at best and mean at worst. Why will Germany not want potential nuclear disasters, but willing to pass on the nuclear plants to these countries? This really baffles me.

  6. Eldredge
    November 30, 2011

    I'm somewhat of the opinion that Germanys' move here was a knee-jerk reaction in the absence of all of the required information. (ala HP in recent weeks). Sure, draw down the amount of nuclear energy going forward. But do so in a studied and logical fashion, considering all of the alternatives available to replace it, and on a schedule that makes sense.

  7. _hm
    November 30, 2011

    Germany is leading developer of cleantech energy and must have strong scientific proof for the way to future in that direction. Other countries must take lesson from them.


  8. Daniel
    December 1, 2011

    I don’t think they may shut down any nuclear reactor by 2022, other than the damaged ones. After announcing about the shut down plan, they are purchasing nuclear energy from neighboring countries. That means they need nuclear energy without danger and risk, how it’s possible. Alternate source of energies may not be sufficient to replace the counties energy requirements.

    December 1, 2011

    I also applaud Germany for dumping nuclear.  This can only be achieved by some hardship and this pain must be shared by all for the greater good.  I look forward to your article on UK plans.  If you look at Scotland's plan our government has pledged the following to  ” meet an equivalent of 100% demand for electricity from  renewable   energy  by 2020″.


  10. Eldredge
    December 1, 2011

    @Jacob – There may be another aspect to their actions as well. They probably have significant interest is selling nuclear-energy related hardware to other countries who still have interest in pursuing this alternative.

  11. Jennifer Baljko
    December 1, 2011

    FlyingScot – Good for the Scots. So Scotland's gov't is autonomous enough to do this, without relying on the UK's energy directive; the UK is building nuclear plants. (I ask because  I live in Catalonia, and I know the Catalans are moving ahead with various renewable plans, although I can't say if that's in align with the Spanish central govt's plan or not). If you have good links worth reading, please send them along. Thanks.

  12. bolaji ojo
    December 1, 2011

    Jennifer, Germany and a few other European nations may be exiting the nuclear market but the U.S. is getting ready for its newest nuclear reactors in decades. Today, Toshiba announced it would ship its “First Major Component for Nuclear Energy Project in U.S.” for a plant in Georgia. Nuclear energy is still an option for some countries and companies like Toshiba are making money from supplying components to the industry. “One man's poison . . .”

  13. Jennifer Baljko
    December 1, 2011

    Bolaji – Wonder how that news is going to be received in Georgia. I suspect we'll see a mix of news like this on a country by country basis, especially as coal-burning plants keep getting a bad wrap and renewable energy sources come online.  All countries will need a mix of energy sources; how else will demand be meet? Or maybe, that's the piece that's missing: How do we lower individual and corporate demand for energy?

  14. _hm
    December 1, 2011

    Along with German government, Siemens also has closed or sold its nuclear industry unit. That was big part of Siemens.


  15. bolaji ojo
    December 1, 2011

    _Hm, Siemens had no option but to get out of the nuclear energy market. It's main customers (the governments and electricity service providers in Europe) were getting out and closing nuclear facilities and the market in the rest of the world isn't really growing. Plus, the anti-nuclear energy forces in Europe are picketing Siemens' other business interests in Europe. The company had to pick a focus and the odds were stacked against nuclear energy.

  16. jbond
    December 2, 2011

    I completely disagree with such a drastic decision. This decision was made based solely on fear. The Japan disaster was horrible, but not a normal occurrence. Just like a plane crashing is horrible, but were not going to ground every plane and say no more flying. Nuclear power is one of the safest, cleanest and cheapest energy sources out there. If you want to make this disappear and replace it with greener energy, then put a plan in motion and get it going while still maintaining your current energy sources. Germany has not only put their country in a large predicament, they are going to now have to spend billions of dollars they weren't originally planning on spending.

  17. Eldredge
    December 2, 2011

    @Bolaji – That's true – I'm sure they don't see the nuclear sector as a growth market going forward! Seems like they should be able to use their power generation expertise in other areas.

  18. William K.
    December 9, 2011

    Those enslaved by their fear are more pitifully enslaved than any other slaves. That is for certain. The fact is that slavery to fears is just as evil as any other kind of slavery, and probably just as damaging. I believe that all slavery is wrong. And I don't like fear very much either.

    The very best choice would be to immediately switch off the power feeds from all of their nuclear power plants, so that the nation would be able to understand clearly what they are asking for. 

    A rational approach would be an inspection of all of the atomic power plants, first, to make certain that they were in compliance with all of the applicable safety rules, and then, more importantly, to verify that there had not been any stupid mistakes made, because most of the problems that made the Japanese earthquake such a disaster were really stupid design errors, such as needing outside power for cooling water circulation, and not having the cooling system designed to allow gravity filling with seawater as a last choice cooling mode, and not having an adequate on site generating system that was adequate and operational. The average German high school student could verify as to if their power plants would be able to survive an earthquake.

    One other question is how many earthquakes are there in German history? Where are the fault lines around the power plants?

    Answering these questions should show if the fears are valid or totally groundless. 

    I find myself wondering what sort of media monster was able to stir up that much irrational fear. Lets hope that the same opinion maker does not decide to point his country toward any other “solutions”.

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