Germany’s Nuclear Retreat: Depressing and Wholly Predictable

The energy situation in Germany is both depressing and wholly predictable. To replace nuclear energy with renewable power sources was always going to be the heaviest of lifts, because it replaces most baseload energy with intermittent alternatives and because the alternatives are not fully mature,scalable technologies. Beyond this, the cost of pushing wind and solar forward has been mind-bogglingly expensive, which is now being felt by ratepayers.

Germany’s power grid operators boosted the surcharge consumers pay for renewable energy by 18 percent to a record, adding to pressure on Chancellor Angela Merkel’s government to act against rising electricity bills.

It gets worse. As we’ve seen in Japan, these subsidies put an exceptional burden on heavy industry:

The total subsidy next year will amount to about 23.6 billion euros ($32 billion), which is added to consumers’ power bills. The fee increase will raise the bill of the average German household with 3,500 kilowatt-hours of consumption by about 34 euros a year. Consumers and smaller companies shoulder a bigger portion of the cost of the increase while big industrial users are largely exempt.

The BDI industry federation that represents about 100,000 companies including Siemens AG (SIE) and Volkswagen AG (VOW) said in a statement today that Merkel’s third-term government needs to “radically reform” the EEG to reduce industry costs. Steelmakers face 300 million euros of extra charges next year and are “strained to the limit,” said Hans Juergen Kerkhoff, head of German steel lobby Wirtschaftsvereinigung Stahl.

That is contradictory to me, as Siemens and Volkswagen are certainly big industrial users but don’t appear to be exempt.

Poking fun at Germany is fun, but we need to be careful about it. I’ve seen a number of articles that try to tie Germany’s woes to renewable energy in general – especially by climate change skeptics - but the country’s energy policy is an extreme situation caused by an extreme reaction to the Fukushima Daiichi accident – in other words, not altogether rational.

The steep increase in the cost of electricity is happening in a Germany where most of its nuclear facilities are still operating (and will until 2022, which the cynical could construe as a bit of an escape hatch). Still, it’s unfortunate to see commentators use the transition as a template for bashing more measured renewable energy project rollouts.

Conversely, environmental groups want to put the best possible face on a wholesale move to renewable energy. Smart Planet tries to do some fact checking on various negative claims to get the needle back into positive territory.

Fact: The increase [in coal usage] was temporary, and is now reversing.

Germany’s recent uptick in coal consumption has been a temporary situation, primarily driven by high natural gas prices which made coal power cheaper. It’s simply incorrect to lay that at the feet of the nuclear power phaseout or the Energiewende.

Which more-or-less admits that most baseload energy has become unwelcome. That approach can turn flipping a light switch into a suspenseful activity. All the unknown qualities can be useful to all sides of the debate, because it allows anyone to say anything.

But here’s the thing: an atomic Germany had an exceptionally stable energy market well able to roll out renewable energy projects and offer generous subsides for them. Now, the country is flirting with the most expensive electricity in Europe while still depending a fair bit on nuclear energy. When 2022 comes, the country will shut down its reactors and – then what? It all seems as it always has – precipitous and potentially ruinous.