Germany's Bold Move: Ousting Nuclear Energy by 2022

Posted on June 16, 2011 by Stephen M. Bruckner

In the wake of Fukushima's nuclear emergency, Germany has decided to end its use of nuclear energy. Germany announced on May 30 that it plans to shut down all of the country’s nuclear power plants by 2022. This decision to close the source of over 25% of its electric power has major economic implications. Why did the Fukushima incident cause Germany to reverse the decision that it made only last September to extend plant licenses an additional 8 to 14 years?  In light of its history of few natural disasters and a sound nuclear plant safety record, Germany’s response to the Fukushima incident is surprising and confounding.  Whatever the motivation of the German government, the salient question is whether this planned phase-out is even feasible.

 

Germany certainly is turning its back on the prayer of that famed nuclear plant worker, Homer Simpson: "And Lord, we are especially thankful for nuclear power, the cleanest, safest energy source there is. Except for solar, which is just a pipe dream." Currently, nuclear energy provides the United States with over 20% of its power and provides France with over 75% of its energy needs. Nuclear energy has been both praised as a successful alternative to fossil-fuel energy and condemned for its riskiness and generation of radioactive waste. Many policy makers and some environmental organizations tout the benefit of nuclear energy in reducing our carbon dioxide emissions.

 

Germany, however, has already taken the first steps to oust nuclear from its energy mix by shutting down seven of the older plants. It plans to boost the use of renewable energy, accelerate the expansion of the “smart” electricity grid, and make buildings more energy efficient. Bloomberg estimates that Germany will spend €10 billion to expand its electricity grid to avoid stunting economic growth. Boosting renewable energy won't be much easier.  German nuclear power plants currently pay a tax to help subsidize renewable energy sources like hydro and wind power. Without the nuclear power plants, the German government must find the funds elsewhere. It will likely cost the government €235 million to replace this loss of revenue in the next three months alone.

 

The closing of Germany’s nuclear power plants complicates its efforts to reduce its carbon dioxide emissions by 40% by 2020. Assuming that Germany does not increase its fossil-fuel energy production, one can predict the rest of this story: To avoid looming energy shortages and economic instability, Germany will need to buckle down and develop new-and-improved environment-friendly energy sources. If successful, these efforts will pave the way for a worldwide boom in renewable energy development. But it is also possible that Germany will return to pre-Fukushima nuclear energy production — that or purchase nuclear energy generated in France. In the meantime, with Germany's solar manufacturing already up 7.6%, Homer Simpson (with the rest of the world anxiously waiting) will continue to eat his sprinkled donuts from the comfort of his nuclear power plant job, waiting to see if his “pipe dream” is real.

 

Bold move, Germany. Now pass the donuts.



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