German Solar Energy May Get a Boost from Japan's Nuclear Disaster

On Tuesday Germany became the first European country to shut nuclear plants in the wake of the crisis in Japan. The move by the German government to temporarily close seven older plants came just one day after Chancellor Angela Merkel had imposed a three-month moratorium on the extension of the country’s 17 nuclear power stations.

During this time, experts will carry out new security checks at all reactors and, equally important, policymakers in Berlin will debate whether or not to permanently reverse a policy that could have allowed energy companies to extend the operating lives of their reactors for 12 years.

Last year, Merkel’s center-right coalition took the controversial step of prolonging the lives of nuclear power stations in a move that the chancellor said would secure the supply of affordable electricity while the country converts to renewable energy sources. That decision reversed an earlier ruling taken by the previous center-left government in 2002 to phase out all nuclear plants by 2021.

Other European governments have been scrambling to step up efforts to assess nuclear safety as well. Switzerland, for instance, has imposed a moratorium on three plants while Finland announced plans to the safety of its nuclear reactors. Along its coastlines, the Nordic country operates seven boiling water reactors of the type affected in Japan.

As European countries and others around the world rethink their nuclear power strategies, traders are shifting their money into renewable energy, solar in particular. German solar panel company, Solarworld AG, is among the biggest beneficiaries; the company has seen its stock soared more than 30 percent since the government announced its decision to shut down seven plants and reassess its long-term nuclear power strategy.

Renewable energy interest groups in Germany are seizing the opportunity to promote alternative energy sources.

"If the federal government is really serious about an accelerated development of renewable energy, it must permanently withdraw the lifetime extension of nuclear power plants and not just for three months," said Dietmar Schutz, president of the German Renewable Energy Federation (BEE). "The extension is not a bridge, but a serious obstacle to the necessary restructuring of our energy system."

Currently, nuclear energy accounts for 23 percent of German energy and renewable energies 16 percent. Schutz said that renewable energies would be able to cover 47 percent of German energy demand by 2020.

Solar energy is developing rapidly in Germany, thanks largely to its favorable feed-in tariffs. Solar capacity is now around 17 GW, with 7 GW added last year alone.

In cloudy Germany, however, the government sees the greatest potential in wind power. At the end of 2009, the country had 21,164 wind power stations with a capacity of 25.7 GW. By 2025, wind power is expected to account for 25 percent of electricity generation. About 40 off-shore wind farms are planned along the country’s northern coastlines with a capacity of 25 GW.

But Germany will have to invest in new grids that can not only transport energy from the new wind parks but are also capable of handling fluctuating levels of wind and solar energy and of managing energy generated by many small facilities spread across the country.

That will cost money and that could be an issue in a country where energy prices have been going nowhere but up. The Japanese nuclear disaster, however, has heightened fears of the technology and strengthened an anti-nuclear lobby and the opposition of the Social Democratic Party (SPD) and Green Party ahead of upcoming regional elections. Numerous anti-nuclear rallies have taken place across the country.

Germans, who have been closely following the ongoing nuclear catastrophe in Japan, may now be willing to pay more for energy they view as safer and more environmentally friendly. 

To read a commentary about the Japanese nuclear disaster and how it might relate to U.S. politics, check out Scott Sklar's "Nuclear Debacle -- Not Clean, Not Safe," here.