Germany Cuts Off Nuclear; Guns for Renewables

Environment Minister Norbert Roettgen said Europe’s largest power market will be a test case to determine whether an industrialized nation can rely far more on clean energy without eroding corporate profit.

Germany is the first major industrialized power to go nuclear-free in the wake of the nuclear disaster in Fukushima, Japan – and only the second after Italy that shut down its nuclear reactors in 1986. Over the course of 12 years, the country will phase out all of its 17 nuclear facilities, which currently provide 23 percent of its electricity.

The new commitment is nothing short of a u-turn on a decision in September to prolong the life of all the nuclear plants beyond 2021. The decision, lauded by Germany’s big four energy companies, was sharply criticized by environmental groups and the renewable energy industry.

Chancellor Angela Merkel said she now wants Germany to become a trailblazer for renewable energy. 

Her plan is to compensate for the nuclear plant shutdowns by reducing electricity consumption by 10 percent by 2020 and, in the same period, more than double the share of renewable energies to 35 percent. Renewables, mostly wind and solar, currently account for about 13 percent of Germany’s power. Depending on the wind and weather, they provide 17 to 27 GWs to the country’s grid. 

The big question is what effect the push to renewables will have on Germany’s economy, which relies heavily on the big, energy-hungry factories to assemble the country’s signature products such as cars and machinery.

Experts admit that to massively increase its use of renewable energies, Germany will need to overhaul its grid infrastructure. In November, the German Energy Agency said the country will have to construct 3,600 kilometers (2,235 miles) of power lines by 2020 to link wind and solar farms with consumers and guarantee power stability. The agency, a think tank owned by several large German financial institutions, among others, calculated costs at €9.7 billion, including those for connecting offshore wind farms.

Even though Chancellor Merkel had bowed to pressure by Germany’s big energy companies to let them run their nuclear plants longer and make millions more (roughly €1 million per day per reactor), she has also shown support for Germany’s budding renewable energy sector. And for good reason: The country is home to some of the world’s largest solar and wind companies, generating more than €16 billion in sales.

Advocates of the transition believe, in general, that the move away from nuclear to renewable energy sources is a huge opportunity for Germany. Clean energy, they contend, is the future and an economy that hops on board early — even if it causes some pain in the short-term — will be better off in the long run.

Still, problems are on the horizon. E.ON, Germany’s second largest nuclear power producer behind RWE, said it aims to sue the government over its plans to shut down the nuclear power plants in the country while retaining a nuclear fuel tax.

Many German manufacturers, which have sought more time and flexibility for the transition, are appalled by the rigid deadline of 2022, according to the Federation of German Industries (BDI). Its president, Hans-Peter Keitel, said the government has rushed the whole process out of political expediency, risking Germany’s energy supply, its carbon reduction goals, its economic growth and its jobs.