Germany was known for decades after World War II as the home of Europe’s “economic miracle,” which was largely the result of economic minister Ludwig Erhard’s decision to move rapidly to decontrolled markets in the late 1940s. Germany could use Erhard again as its energy minister just now, as Germany’s heavy-handed intervention into its energy market is playing havoc.
When I visited Germany in the fall of 2008 on an energy junket as a guest of the German government, just about everyone I met said that the Merkel government was going to have to reverse the commitment of the previous left-leaning coalition government to phase out Germany’s nuclear power by the year 2020 if it was to have any chance of meeting the European Union’s greenhouse gas emission reduction targets. (The nuke phase-out had been the main condition of the coalition partner Green Party in the previous government—another object lesson in why proportional representation is a bad idea. But that’s a seminar for another day.)
But in the aftermath of Japan’s Fukushima nuclear power plant meltdown, the Merkel government has caved on nuclear power, even though no German nuclear plants are vulnerable to tsunamis, and announced that Germany will go through with the phase out of its nuclear plants by 2022. As of 2010, nuclear power contributed 10 percent of Germany’s total energy consumption, and over 22 percent of its electricity. (See Figure 1 below.)
Figure 1: Primary Energy Supply in Germany, 2010
In May the International Energy Agency estimated that the phase out decision would add at least 25 million tons of CO2 to Germany’s greenhouse gas emissions, though this may prove an underestimate if Germany prolongs or expands the use of coal-fired power plants to fill the gap, as is likely. Last week Germany’s economics ministry released a study that estimated that the cost of the nuclear phase out in lost jobs and higher energy prices and carbon emissions permit fees (since Germany is part of the European carbon trading scheme) will be about $46 billion.
But wait—Germany has been a smashing success at renewable energy hasn’t it? They are the world’s leading producer of solar power, accounting for 43 percent of the world’s total installed base. The growth numbers are astounding: between 2000 and 2010, according to the latest BP Statistical Review of World Energy, Germany’s wind power capacity grew 516 percent, and its solar power capacity by 22,689 percent! Figure 2 below displays the growth of solar power in Germany during this time period. Wow!
Figure 2: Growth of Solar Photovoltaics in Germany, 2000 – 2010
Of course, solar power, which Germany has heavily subsidized, started from almost nothing in 2000, so this is a misleading numbers game. After all of this effort, solar power accounts for only 1.1 percent of Germany’s total electricity supply, and supplied only 5 percent as much electricity as its nuclear power plants. Figure 3 shows that for all of the effort and subsidies Germany has put behind wind and solar power, they still both account for a fraction of the power output of nuclear power in 2010.
Figure 3: Wind, Solar, and Nuclear Capacity in Germany, 2010
To make up for the lost nuclear power, solar capacity would have to grow more than 20-fold from its current level, but Germany is already cutting back on solar subsidies because it cannot afford it. This is the main reason the Institute of Energy Economics at Cologne University estimates that most of the lost nuclear electricity will be made up gas-fired power, and supply from other countries (ironically, some of it nuclear if it is purchased from France, Switzerland, or Belgium).
Source: BP Statistical Review of World Energy 2011