Winnipeg Free Press - PRINT EDITION

Can Germany keep the lights on without reactors?

  • Print

When Germany decided a year ago, after the Fukushima disaster, to phase out nuclear energy by 2022, economists were worried.

Would the country be able to replace its 17 nuclear plants, which supplied 23 per cent of its electricity in 2010, with renewable forms of energy? Would electricity prices go through the roof? Would the move endanger German industry?

It will be years before the answers are known for sure. But the Energiewende, as Germans call the energy U-turn, has already produced one certainty: The country's four giant power companies, which were already compelled last year to shut eight of their nuclear plants for good, are among the big losers. Their fate may revive heretical thoughts of a reprieve for atomic power.

Half a decade ago, the big four -- EON, ENBW, RWE and Vattenfall -- were still widely seen as a cartel.

They provided 86 per cent of the power supply and controlled most of the distribution network. Profits were juicy, share prices were high and the industry's bosses were welcome guests at Berlin's chancellery. In short, life was good for Germany's energy giants.

Then their fortunes turned. In short order the firms were dealt two body blows. The first they could have coped with: The European Commission forced them to spin off their transmission networks.

The effect was compounded, however, by the Energiewende, which curtails the firms' most predictable source of revenue. All nuclear plants have to be taken offline by 2022 -- and, despite the shutdown, the companies will have to pay a nuclear-fuel tax of around $2.9 billion a year until 2016.

In the meantime, thousands of subsidized wind farms and solar arrays are hobbling the earning power of conventional power stations.

The midday peak, when the giants used to command premium electricity prices, is undercut by solar power. Winter winds whip away the margins big, inflexible plants used to enjoy.

To add insult to injury, consumers and power-hungry industries still expect the power utilities to take up the slack when sun and wind are idle.

Last February, with all the active nuclear plants working at full capacity, Germany's energy producers were only barely able to keep the lights on.

The firms need to build new capacity, but what kind of replacements should they invest in as nuclear plants and aging conventional power stations go off stream?

Offshore wind farms are expensive and their income unpredictable. Low gas prices make the returns on gas-fired plants too uncertain. New coal-fired stations may look attractive now, but could falter if, as seems likely, charges for carbon emissions go higher.

As a result, it is almost impossible to calculate the future returns on a new power station during the next 20 or 30 years.

Opponents of the erstwhile oligopoly are understandably triumphant. Even most of the business world and the power giants themselves support the nuclear phase-out, at least in public.

And that is despite the threat of soaring electricity prices. Various estimates say the U-turn will push up consumer prices by between 20 per cent and 60 per cent by 2020.

What is more, to encourage investment in new conventional power stations, extra subsidies may be needed to reward standby capacity or stored power reserves.

There is also the chance the energy U-turn could prove illegal. EON and RWE have filed cases with the federal constitutional court claiming the abrupt closure of nuclear plants is tantamount to expropriation. As a foreign investor, Vattenfall -- which is owned by the Swedish government -- is seeking redress through arbitration in Washington.

The German government faces damages from these claims that could total over 19 billion dollars.

Nobody in Germany dares to talk publicly about a reprieve for nuclear power, but obliquely the lobbying has never truly died.

The economics ministry, under pressure from the Federation of German Industry, has set up an independent process to "monitor" the U-turn, with a view to possible course corrections -- but with no mention of the word "nuclear."

Energy-intensive industries, especially, are concerned rising electricity costs could damage competitiveness.

The German Atomic Forum, a lobbying group, warns the country's nuclear expertise, second only to France's, will slowly be eroded.

It is still needed to run and decommission existing plants, but the incentive to choose a career in nuclear energy in Germany is dying. Siemens, for instance, continues to export components used in nuclear plants, but it no longer actively seeks nuclear projects.

Although the power giants may once have been part of the unacceptable face of Deutschland AG, their weakened state is not such a desirable outcome either.

Has Germany said goodbye to nuclear power for good? The arguments for another U-turn will not go away.

Republished from the Winnipeg Free Press print edition July 3, 2012 A11

Fact Check

Fact Check

Have you found an error, or know of something we’ve missed in one of our stories?
Please use the form below and let us know.

* Required
  • Please post the headline of the story or the title of the video with the error.

  • Please post exactly what was wrong with the story.

  • Please indicate your source for the correct information.

  • Yes

    No

  • This will only be used to contact you if we have a question about your submission, it will not be used to identify you or be published.

  • Cancel

Having problems with the form?

Contact Us Directly
  • Print

You can comment on most stories on winnipegfreepress.com. You can also agree or disagree with other comments. All you need to do is be a Winnipeg Free Press print or e-edition subscriber to join the conversation and give your feedback.

You can comment on most stories on winnipegfreepress.com. You can also agree or disagree with other comments. All you need to do is be a Winnipeg Free Press print or e-edition subscriber to join the conversation and give your feedback.

Have Your Say

New to commenting? Check out our Frequently Asked Questions.

Have Your Say

Comments are open to Winnipeg Free Press print or e-edition subscribers only. why?

Have Your Say

Comments are open to Winnipeg Free Press Subscribers only. why?

The Winnipeg Free Press does not necessarily endorse any of the views posted. By submitting your comment, you agree to our Terms and Conditions. These terms were revised effective April 16, 2010.

letters

Make text: Larger | Smaller

LATEST VIDEO

Winnipeg Cheapskate: Cheap summer weekends

View more like this

Photo Store Gallery

  • A pelican comes in for a landing Wednesday afternoon on the Red River at Lockport, Manitoba - Standup photo- June 27, 2012   (JOE BRYKSA / WINNIPEG FREE PRESS)
  • A goose comes in for a landing Thursday morning through heavy fog on near Hyw 59 just north of Winnipeg - Day 17 Of Joe Bryksa’s 30 day goose challenge - May 24, 2012   (JOE BRYKSA / WINNIPEG FREE PRESS)

View More Gallery Photos

Poll

Should Manitoba support the transport of nuclear waste through the province?

View Results

Ads by Google