Germany to Close Nuclear Plants
By Patrick McGroarty and Vanessa Fuhrmans
31 May 2011
The Wall Street Journal Europe
(Copyright (c) 2011, Dow Jones & Company, Inc.)
BERLIN -- Germany said it would close all of its 17 nuclear reactors by
2022, a sharp policy reversal that will make it the first major economy
to quit atomic power in the wake of the nuclear crisis in Japan.
German Chancellor Angela Merkel announced Monday that she plans to follow a government-appointed commission's recommendation to shut eight of the reactors immediately and close most of the others by 2021. Three plants may be kept online into 2022 as a source of reserve power, she added.
"After what was, for me anyway, an unimaginable disaster in Fukushima, we have had to reconsider the role of nuclear energy," Ms. Merkel said as
she announced the decision at a news conference with several of her
cabinet ministers.
"This path sets out a great challenge for Germany," she added, but "we
can be the first industrial country to make the transition into an age of highly efficient and renewable energy."
The move is an abrupt U-turn from a contentious plan that Ms. Merkel
engineered just last fall, that would have extended the lifetimes of some of Germany's reactors into the 2030s, more than a decade longer than
previously scheduled. Her latest move is effectively a return to an
agreement made in 2002 by a center-left Social Democrat-Green coalition.
Japan's nuclear disaster has stoked deep fears about nuclear energy among Germans. It pushed Ms. Merkel to shut down seven of the country's oldest reactors and to order a review of its nuclear strategy just days after the first explosion at tsunami-stricken Fukushima Daiichi plant in March.
The German government's decision Monday, based on the outcome of that
review, marks the most dramatic shift in a country's nuclear-energy
policy in reaction to the Japan crisis. Japan itself has quit plans to
build new reactors, and other countries, such as Taiwan and Italy, have
suspended new reactor plans pending safety reviews. Switzerland, in a
decision last week, is the only other country whose government has voted
to eventually decommission its nuclear plans. Under the Swiss plan,
however, the nuclear phase-out may not be completed until well after
2030.
Still, in few countries is nuclear energy the hot-button issue it is in
Germany, where polls show some 70% of the populace opposes it. Since the
Fukushima accident, hundreds of antinuclear protests have taken place
across the country, leaving Ms. Merkel to grapple with the new momentum
in sentiment.
Ms. Merkel's change of heart, though, hasn't produced the desired
political effect. Conservative allies have been frustrated by her sudden
turn away from a cherished policy victory, and nuclear opponents have
seen the move as opportunistic. Those perceptions contributed to several
stinging regional election losses for the Christian Democratic Union this spring, and have led to a surge in political clout for the opposition Green Party.
Now Ms. Merkel must sell her newfound distrust for nuclear power to the
very political parties whose plans to abandon it she discarded last fall.
The center-left Social Democrats, architects of the earlier plan to phase out nuclear power, said Monday they would approve the government's new plan in parliament only if a stronger commitment is made to build up wind and solar capacity, and if the legislation leaves open the possibility of closing all nuclear plants sooner than 2022.
German industry leaders, while not surprised by the announcement, lashed
out at what some called a hasty, politically driven decision that would
result in higher energy prices and threaten German competitiveness.
"The clearly political intent to fix a final and irreversible end-date
for German nuclear energy with such unprecedented haste gives me increasing worry," wrote Hans-Peter Keitel, head of Germany's influential
BDI business lobby, in an open letter to German business leaders Monday.
"Such a complex undertaking as exiting atomic energy . . . requires room
for the possibility of readjustments, also in the timeline. Anything else would be irresponsible."
Germany's electricity prices, which already have more than doubled in the past decade, are a particularly sensitive issue for German industry,
whose domestic sites are responsible for nearly 50% of the country's
electricity consumption.
Claudia Kemfert, head of the energy department at the German Institute
for Economic Research in Berlin, said electricity prices most likely will rise only moderately because of the nuclear phase-out but that Germany will have to hasten the expansion of its power grid to ease the
fluctuations that could come with turning more to alternative energy
sources.
The bigger challenge, she said, is keeping on track to meet Germany's
new, tougher targets to cut greenhouse-gas emissions to at least 80%
below 1990 levels by 2050. "The question is whether the share of energy
from coal will increase," she said. Currently, Germany derives 42.4% of
its energy supply from coal-fired plants, but phasing out nuclear power,
which now makes up nearly 23% of the country's energy supply, could force it to rely more on coal. The big variable is the cost of natural gas, the preferred, cleaner alternative. But procuring cheaper gas from other countries is complicated, in part because of long-term contracts many German utilities signed with Russia locking them into a price tied to the price of oil.
On Monday, Ms. Merkel said the new nuclear policy wouldn't affect
Germany's ambitious renewable energy targets, which call for generating
80% of Germany's energy supply from renewable sources, such as wind and
solar, by 2050. Renewable energy capacity currently makes up about 16.9%
of Germany's electricity consumption.
The government also is betting that a tough timeline to abandon nuclear
power will provide the catalyst for an economic boon in further renewable energy investments.
Shares in German utilities E.ON and RWE AG, which operate most of Germany 17 nuclear reactors, fell sharply Monday morning on news of the
government's new plan.
Though they will no longer reap the potential profits of operating their
nuclear plants longer, utilities will still be subject to a new tax on
nuclear-fuel rods that the government introduced earlier this year to
offset those potential gains.
The tax, expected to generate about 2.3 billion euros ($3.25 billion)
annually, has been earmarked to help plug holes in Germany's federal
budget.
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Jan Hromadko contributed to this article.
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