August 30, 2011
Germany Dims Nuclear Plants, but Hopes to Keep Lights On
Germany retired 8 of its 17 nuclear reactors shortly after the Fukushima disaster in Japan, and now has plans to retire the remaining 9 reactors by 2022. As a result, Germany must now grapple with meeting the need for baseload generation, and in a manner that does not contribute to greenhouse gas (GHG) emissions. Germany has an impressive record investing in renewable energy, which now meets 17 percent of its electricity output. But renewable energy (solar and wind) does not meet the need for reliable, firm baseload generation, given its variability in output (when the sun doesn’t shine or the wind doesn’t blow). Moreover, the offshore wind projects in northern Germany are located far away from the manufacturing base in southern Germany, requiring Germany to consider building 500 miles of new transmission lines to bring electricity from north to south. So Germany is considering the addition of 23 gigawatts of gas- and coal-fired plants by 2020. (The retired or soon-to-be retired nuclear plants contributed 25 gigawatts of the 133 gigawatts of currently installed generating capacity.) The power companies that would be expected to build the gas- and coal-fired plants, however, are not embracing the opportunity, given Germany’s preference for buying from “clean” energy sources when that power is available. Moreover, fossil fuel-fired plant operators will be required to purchase allowances in the European Union carbon market to cover the level of GHG emissions from their plants, and the costs of these allowance are highly unpredictable and variable.
The decision to abandon nuclear energy over the next 11 years represents a huge challenge for Germany. Notwithstanding its admirable record in pursuing renewable energy, these variable power sources are only one part of a resource portfolio, and must be complemented by firm, baseload generation. On that front, the elimination of nuclear power leaves Germany with the option of natural gas – on which it depends on Russia for its supplies – or coal, which conflicts mightily with Germany’s GHG reduction goals. The United States has a similar dependence on nuclear power, with about 20 percent of our electricity supply from nuclear plants, but we have achieved far less development of renewable power sources. The U.S. is unlikely to follow Germany’s lead on abandoning nuclear power. We would have the same challenges in replacing the clean, reliable baseload generation. And we have an advantage over Germany in our plentiful domestic natural gas supplies, due largely to improved technology (hydraulic fracturing) that has made extraction of shale gas economically feasible. Germany, on the other hand, would increase its reliance on Russia and, in turn, the good graces of Vladimir Putin (Prime Minister this year, President next year) for its natural gas supply, which is not a good place to be. Perhaps it is not too late for Germany to reconsider, yet again, its policy on nuclear power.