Germany Considers Accelerated Nuclear Exit on Fukushima Worries

In the wake of the devastating nuclear crisis afflicting the Fukushima Daiichi nuclear plant in Japan, Germany has embarked on an abrupt shift away from nuclear power, shutting down eight reactors for safety checks and ditching concerted efforts to keep nuclear power plants open in the long term. In mid-April, Chancellor Angela Merkel told reporters that leaders of Germany’s 16 states all want to “exit nuclear energy as soon as possible and make the switch to supplying via renewable energy.” The policy reversal has incited ardent opposition from the energy sector and industry.

Germany generates some 23% of its power from nuclear sources, and if the country decides to shut down power from nuclear reactors no later than 2022, it will suffer a supply squeeze. In April, ministers agreed to set down the main points of the country’s new energy policy by June. Industry analysts say the accelerated exit from nuclear power means that Germany could implement a €5 billion ($7.42 billion) credit program to support renewables and build new gas and coal plants. Germany already has one of the most aggressive clean energy policies in the world and sources 17% of its power from renewables. The nation is looking to raise that share to 40% by 2020.

The 2022 deadline for nuclear power had been set in 2000 by the former center-left government led by Chancellor Gerhard Schröder. In September last year, Merkel’s government struck a deal with energy companies to extend the lives of the country’s 17 nuclear power plants, located in five of Germany’s federal states, for another 12 years beyond 2022.

Skyrocketing Power Costs. The plan to exit nuclear power so quickly could prove costly, because Germany is Europe’s biggest economy and largest energy user. According to a study commissioned by the Bundesverband der Deutschen Industrie, a German industry lobby, permanently shutting down eight reactors that are now temporarily shut down, as has been called for, and closing remaining plants by 2022 could increase wholesale power prices to €70/MWh within seven years.

The study, whose results were released on April 24, also suggests that Germany’s about-turn on nuclear power could spawn additional costs of €33 billion by 2020—the bulk of which will be paid by industrial and commercial energy users—as utilities turn to more expensive forms of generation (the study assumes that almost half of Germany’s nuclear output would be replaced by imports and coal and gas generation) and demand for carbon permits increases. If costs for subsidies and the German grid are included, that figure could skyrocket to €51 billion, the study conducted by r2b, an energy consulting firm, said.

The government refuted allegations that costs would rise so steeply. Economy Minister Rainer Brüderle admitted to German radio, however, that the new phase-out plan—which includes expanding grids and energy storage—could cost consumers and taxpayers between €1 billion and €2 billion per year.

German Energy Firms Strike Back. Protesting the government’s U-turn on nuclear policy, plant operators in Germany have halted annual payments of up to €3.3 billion into a fund set up last year as part of a deal to extend reactor lifespans. Among the companies involved are energy giants E.ON, RWE, and Vattenfall.

RWE CEO Jürgen Grossmann has lashed out at the government, saying the phase-out could scar the economy. “This will not bring about the end of German industry overnight,” Grossman told shareholders in mid-April. “But it could lead to a long-term depletion process with a considerable negative impact on jobs and prosperity.” The company, Germany’s largest nuclear power producer, has also begun legal proceedings against the government to fight the temporary shutdown of its Biblis nuclear plant in Hesse on allegations that the closure was illegal.

E.ON said in a statement that it would not challenge closures of its reactors Isar 1 (Figure 4) and Unterweser, even though it had doubts about the move’s legality. But E.ON CEO Johannes Teyssen, too, has expressed concern about the proposed nuclear exit, saying it would affect Germany’s climate goals and increase power prices—which could ultimately force energy-intensive industries out of business.

4. Shutting the door on nuclear power. Utilities producing nuclear power in Germany have said the government’s plans to phase out all nuclear power in the country by 2022 and replace that capacity with renewables, coal, and gas could sharply increase power prices and cause a supply squeeze. The government temporarily shut down seven nuclear plants built before 1980 and one newer facility at Krümmel in the wake of the Japanese nuclear crisis. 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 Wall Street Journal reported that as a result of the Daiichi crisis, German engineering firm Siemens may be reconsidering a plan to form a partnership with Russian state-owned nuclear company Rosatom. The plan has been considered a major part of Siemens’ strategy to expand its presence in the nuclear sector.

Italy Pulls Back on Nuclear as Well. While a number of other European countries conducted safety checks on their nuclear facilities—but continued to back energy plans that factored in future nuclear power—in April, Italy also indefinitely shelved plans to allow construction of new plants. In 1987, the Italian public had overwhelmingly voted to reject nuclear energy after the Chernobyl disaster, and its government in April scrapped plans for a new referendum to win public support for reactors that were to be built by Italian utility Enel and France’s EDF starting in 2013. Prime Minister Silvio Berlusconi said he hoped the country would revive the plans within a year or two after more clarity was gained on the technology.

India Defers Approval of Four Reactors. The Fukushima nuclear crisis has also reignited concerns about the safety of India’s nuclear program. Widespread—and violent—protests against government plans to build six AREVA EPRs over 15 to 17 years in the coastal Maharashtra region have made the new builds a bitterly contested political issue. In late April, India’s environment ministry made the unprecedented decision to defer approval for Units 3, 4, 5, and 6, reactors being built in Tamil Nadu state by the central government–run Nuclear Power Corp. of India Ltd. (NPCIL) and Russian state-owned company AtomStroyExport. Two VVER-1000 units are already under construction in that state, and Kudankulam Unit 1 is expected to begin operations by June. The ministry cited environmental hazards—including problems concerning a proposal to dispose cooling water into the sea—and the need for new risk assessments, because no new NPCIL environmental impact reports had been filed since 2004. Sources say that to shore up confidence in the country’s nuclear-heavy future energy plans, the government will continue to tighten safety regulations and go so far as to revamp its nuclear watchdog agency.

—Sonal Patel is POWER’s senior writer.