Chancellor Angela Merkel surprised many with her May 30 announcement of a complete shut down of all Germany’s reactors by January 1st, 2022 and the shutdown of 14 of Germany’s total of 17 reactors well before that date. The German chancellor has, in nine months, gone from touting nuclear plants as a safe “bridge” to renewable energy and easing regulatory constraints on extending reactor lifetimes, to pushing the biggest and fastest nuclear exit strategy in any country using nuclear power.
To be sure, Merkel seeks to rival the ambitions of German political rivals, the Social Democrats and Greens, and her ‘atomic epiphany’ following the Fukushima disaster seems opportunistic to some, and cynical to others. Critics however are forced to claim the exit strategy is both technically difficult or a grave economic handicap for Germany, whose export-oriented, trade surplus economic status is the envy of most other G8 countries except Japan, from the USA to France, UK and Italy.
The ‘technological challenge’ claim is Germany must rapidly carry out a 10 billion-euro ($14.4 billion) expansion of Germany’s electricity-delivery network, start work on an even more expensive Smart Grid, import more electricity from France, despite French exports steadily shrinking, and subsidize power prices for industrial users. If not, the claim goes on, her decision to exit nuclear power will stunt growth in Europe’s largest economy, can tilt Germany into trade deficit, raise inflation and trigger a retreat into further debt that will make the euro even more certain to collapse.
CABLES AND COSTS
The main claim of mostly external, non-German critics of the exit plan is that very heavy spending is needed on cables to connect new large-sized offshore wind farms, with per-kiloWatt capital costs as high as 5000 euro ($7000) excluding power cables, located in the North Sea, to Germany’s ‘manufacturing belt’, located in the south. Offshore windfarms are however most surely not the only non-nuclear power supply sources available to Germany. Others notably include natural gas-fuelled power plants, typically costing less than 600 euro per kiloWatt ($850 per kW) and able to utilise cheap shale and fracture gas and coal seam gas extracted ‘in situ’ without any coal mining operations.
Compared with nuclear power which is intensely dependent on oil for producing uranium, shipping and processing uranium into fuel rods, transporting and storing nuclear wastes, and servicing nuclear plants, natural gas-fuelled electricity produces about the same overall CO2 emission per unit kWh output. Critics fail to mention the “cheap gas” alternative to nuclear power, simply because it is the biggest and cheapest, and can avoid the drastic environmental damage caused by nuclear power ‘over the horizon’, in low-income African countries, such as Niger, where France sources a large part of its uranium from mines operated with disastrous mine worker health and safety conditions.
Critics claim Germany must build new and costly high-volume lines to France, to raise imports of nuclear-origin electricity from France’s 58 nuclear reactors – themselves increasingly unable to satisfy French national peak power demand, resulting in France now increasingly being a net importer.
In winter 2010-2011, French imports of electricity attained 9600 MW, the output of nearly 10 of its 58 reactors when able to fully deliver their design capacity. This itself is decreasingly possible. EDF’s attempt, in early winter 2010 to operate all 58 reactors simultaneously, under full media coverage, was a failure because several reactors were unable to reach their design capacity. Depending on rainfall and the availability of cooling water, as many as 4 to 6 of France’s nuclear plants may be shut (that is reduced in power output to self-sufficiency zero export level), due to drought, by late June, 2011. Also in summer, airconditioning demand in France has risen so fast since 2005, that national demand for cooling can now take the output of at least 5 reactors running at full power, 5000 MW.
DONT COUNT ON NUCLEAR POWER
If Germany expects French nuclear power to substitute the 23 percent of German national power demand covered by the 17 reactors it will shut down, this is a fragile hope and dangerous strategy. Conversely, shale and frac gas from Poland, pipeline gas from Russia, and imports of coal-based electricity from these and other Eastern countries will all be available to Germany. Critics of the environmental impact of coal-fired power and defenders of “clean” nuclear power, like James Hansen, or Jim ‘Gaia’ Lovelock can be invited to give their pep talks at the edge of Fukushima’s total exclusion zone. This is now being extended due to deadly radiation extending at least 50 – 70 kilometres from the ruined power plants which will spew as much as 50 – 100 times the radiation released by the Hiroshima atom bomb of 1945, making forced evacuation needed far beyond the initially hoped-for 20 kilometres.
Importing French nuclear power, when or if it might be available will also be expensive. French electric power prices, although well behind German prices, are officially set to rise at least 30 percent by 2014. The reason is simple: nuclear power plant costs, especially the vast dismantling and decommissioning costs of its increasingly aged – and therefore dangerous – reactor fleet. No firm cost figures are supplied by the French government or its nuclear elite on this subject, but several billion euro per reactor, and a timespan of at least 10 years per reactor, are likely. During this extended period and with no surprise, decommissioning cost will further rise – inevitably raising electricity prices and/or taxes paid by French consumers subjected to a barrage of pro-nuclear propaganda on State-owned TV channels and radio stations, and the government-friendly media.
What critics call Merkel’s ‘atomic epiphany’ was driven by something closer to the Arab Flash Mob revolt. Following the Fukushima disaster and completely unlike the tepid reaction from France’s supine and propaganda-doused nuclear-friendly general public, 250 000-person anti-nuclear demonstrations are common in Germany. Ignoring that would be electoral suicide.
Linked to mass protest against governments like that of Merkel – who rejected any criticism of nuclear power until March 11th – the nuclear exit strategy will be a test case on whether an export based industrialized nation can rely far more on clean energy without eroding corporate profit. To be sure, the exporter nation called China with the world’s biggest trade surplus and although busily building nuclear plants, presently gets an unimpressive 2 percent of its electricity from the atom, proving that nuclear energy is in no way critical for achieving the status of ‘industrial exporter country’ – if this status remains the overriding or single goal of society. German anti-nuclear protest meetings, since March 11th, not only explicitly link nuclear power with cancer (Nuclear = Cancer) but also with locking society into a one-way, no exist urban-industrial lifestyle and culture (Nuclear = No Choice).
CORPORATE AND CONSUMER RESPONSE
German corporate reaction, again another surprise to outside critics of the exit strategy and supporters of the nuclear no choice, was almost euphoric following the Merkel announcement. Germany’s DAX stock market index showed its biggest one-day rise in weeks, May 31st. Explanations of this are however complex, because as recently as late 2010, German corporate chiefs were using heavily fear-charged propaganda, in their fight for nuclear reactor operatingg lifetime extensions fom Merkel’s coalition government. In particular the CEOs of two nuclear power companies E.On and RWE, and the Deutsche Bank president threatened a possible complete halt to corporate investment in alternative energy, if Merkel did not extend nuclear plant lifetimes.
This was however only one-half of the bargain: Merkel made it clear that in return for longer operating lifetimes, nuclear plant operators would pay special new taxes designed to help Germany fight its massive fiscal deficits. These taxes, or nuclear special levy was set on a base able to reach as much as 2 billion euro per year, almost wiping out the subsidies received from government by the nuclear sector, and making any increase of the reactor fleet impossible. By late 2010, the calculations and the negotiating stances of German corporate leaders had changed – well before the Fukushima disaster, which only triggered the 180-degree changes that were coming.
In brief, nuclear power is so expensive that Corporate Germany or ‘Germany AG’ seeks any way to get consumers and taxpayers to share the burden of decommissioning and dismantling the country’s ageing plants – ageing in the exactly same way as those of France, USA, Japan and UK – the ‘old nuclear nations’ with nuclear plants dating back in some cases to the 1960s. An improved power network to avoid potential blackouts was already accepted as needed by all players, especially due to Germany’s burgeoning windfarm capacity and ageing power infrastructures. Paying for this is a different subject, but the largest beneficiaries will include carmakers in the south, notably Daimler AG and Bayerische Motoren Werke (BMW) AG, and their equipment suppliers including Siemens AG (SIE) and Swiss ABB Ltd.
Infrastructure projects often face resistance from local residents concerned that home prices and quality of life will decline. E.On AG, the country’s largest utility, is fighting legal challenges to finish building a coal-fired power plant with extreme low CO2 emissions in the town of Datteln while grid builder Elia System Operator AG is trying to convince local authorities to proceed with plans to build power lines through a forest in the state of Thuringia.
REHABILITATING THE STATE
To kick-start the work, the German economics ministry will likely use fast-track powers last exercised in 1990, when united Germany replaced crumbling roads and bridges in former East Germany to better link the country. Control over approving power grids will be nationalized. Taken by Merkel’s government from states and local councils, decisions on the power grid needs generated by the nuclear exit will be given also probably soon be given assured financing, satisfying business, and permanent government scrutiny, pleasing the public.
Germany needs to construct about 3 600 kilometers of new power lines by 2020 to link renewable energy or other power supply projects with consumers and guarantee the grid works, the German Energy Agency said in November 2010. Due to the nuclear exit strategy the power grid needs will increase substantially, perhaps to more than 5000 kilometres, also raising the 2010 cost estimate of 9.7 billion euros ($ 10.3 billion), which will especially rise if further new offshore wind farms are added to those already planned.
Germany’s four high-voltage grids are presently owned by four major corporations, one of them non-German, which in the future may be ‘encouraged and persuaded’ to roll into one State-dependent power transport conglomerate. exactly mirroring the reality of nuclear power: state dependence and state control. The main difference is that with non-nuclear electricity, the State can make a profit, rather than finance year-on-year rising losses, with the final hit of decommissioning costs, at the end.
Depending on the mix of renewable energy and gas-fired plants built to cover the 22 percent of power presently coming from the atom, Germany may not have to source more than 10 percent of its annual power use from abroad, during the phase-out, and taper this to zero within a few years. Towards that outlook, and underscoring the role of the State, Merkel also announced on May 30 that Germany will raise renewable power output to 35 percent of the country’s supply in 2020, from 17 percent last year.
Using a much more cost-conscious approach, Germany is likely to reduce the guaranteed, above- market rate paid for solar electricity by another 6 percent, following planned cuts of as much as 24 percent between July 2011 and January 2012 taking account of falling solar PV panel prices. This also will shift future power supplies to a more rational base favouring gas-fired plants and imported power from lower cost suppliers, including Poland, the Czech Republic, Russia and perhaps also tapping abundant hydropower from Norway.
The State role in the courageous decision to exit nuclear power has been an example to other EU governments, some of them actively mulling or developing non-nuclear strategies, like Spain and Italy, while other like the UK, and especially France cling to the so-called “no alternative” of the atom.