Germany’s Nuclear Phase-Out Has Widespread Implications

The German government in July finalized a package of bills that will phase out nuclear’s 23% contribution to the country’s power supply by 2022 and increase renewable generation from the current 17% to 35%. In August, the Federal Network Agency ( Bundesnetzagentur) said it wouldn’t rely on power from seven of the nation’s oldest reactors (and another shut down for technical problems) for reserve power this winter, despite warnings from grid operators that the phase-out could result in winter blackouts (Figure 1). Saying the grid would remain “controllable,” the agency instead urged states to approve more than a dozen new coal and gas plants and transmission upgrades over the next several years.

1. Shutdown at Landshut. In the wake of spring’s Fukushima crisis in Japan, Germany idled seven nuclear plants built before 1980 and one newer facility at Krümmel for technical problems. Among those was E.ON’s 1977-built Isar Unit 1 near the city of Landshut (shown here). The 1988-built Isar 2 continues to be used for baseload supply. Courtesy: E.ON

Meanwhile, the suspension of significant nuclear generation following the Fukushima crisis has forced Germany—a net exporter of about 14 TWh—to begin power imports of nearly 4 TWh from the Czech Republic, France, and Austria. And, according to the Dena Energy Agency, a researcher part-owned by the German government, Germany will have to spend about €10 billion ($14.3 billion) by 2020 to expand the nation’s grid, including adding lines from offshore wind farms in the north to factories in the south, if it is to stop using neighboring networks—funds that will be hard to come by in a fragile global economy.

The phase-out has already had a dire financial impact on the country’s industrial sector. Fears are mounting that the shutdown will increase industrial operating costs by nearly a fifth (and Germany already has one of the highest rates in the European Union), hitting the country’s energy-intensive manufacturing industries such as steel production, chemicals, and cars.

Perhaps nuclear plant owners have been hit the hardest. E.ON in August said it would be forced to cut 11,000 jobs as a result of the government’s decision to shutter the reactors. The closures and a new tax on spent nuclear fuel rods have cost the company €1.9 billion ($2.74 billion), driving it to declare the first quarterly loss in a decade: a second-quarter loss of €1.49 billion ($2.2 billion). German competitor RWE has also been hard-hit: Net profits for the first half of the year collapsed 40% on the nuclear closures and spent fuel tax. The closures and taxes would cost it almost €900 million ($1.3 billion), RWE said, but added that to alleviate its current “substantial financial burdens,” the company plans to increase its renewable energy holdings.

Vattenfall has also taken a hit. The Swedish state-owned group operates two German nuclear facilities, Brunsbuettel and Krümmel, though both have been offline since 2007 (one due to a short circuit and the other due to a fire). Neither will be reopened. Vattenfall in July reported that it had taken a charge of 10.2 billion crowns ($1.62 billion) related to the German nuclear plants and had a second-quarter operating loss of 3.2 billion crowns ($490 million).

—Sonal Patel is POWER’s senior writer.