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By Robert Rapier on Nov 11, 2011 with 23 responses

Germany Faces Sticker Shock Over Renewable Energy to Replace Nuclear

The following is a guest post from Oilprice.com, republished with permission to R-Squared. For years many Germans warned that nuclear was the only way they could meet the energy needs of their population and reduce carbon emissions at the same time. Now that they have decided to shut down their nuclear plants, they are preparing to build new coal-fired power plants to help close the shortfall. The guest post below explains.

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On 30 May, in the aftermath of Japan’s Fukushima nuclear disaster, German Chancellor Angela Merkel announced that Germany would close all of its 18 nuclear power plants between 2015 and 2022, which produce about 28 percent of the country’s electricity.

Eight have now been taken offline, and with the winter coming on Berlin is scrambling to make up the energy shortfall lest the country suffer blackouts combined with the need to import massive amounts of electricity.

Despite Germany’s Kreditanstalt fur Wiederaufbau (German Development Bank) being set to underwrite renewable energy and energy efficiency investments in Germany worth $137.3 billion over the next five years, Merkel’s government has now announced that in addition to going green, it will also build a dozen coal-fired power plants as part of the country’s future energy mix. In order to assure the energy transition, the government also plans to subsidize new natural gas power plants as well.

Now the consequences of the 30 June Bundestag law phasing out nuclear power are impacting. On 19 October Germany’s Minister of Economics and Technology Philipp Roesler somberly told Parliament, “The real work starts now,” adding that the ministry now had the goals “To ensure the security of the energy supply and to protect the environment, within acceptable financial conditions.” Afterwards, Environment Minister Norbert Roettgen told legislators at the same session, “Renewable energy and energy efficiency are the two pillars of the new energy policy.” The next day Roesler in the company of Finance Minister Wolfgang Schaeuble in a joint press conference informed reporters that Germany had sharply lowered its 2012 growth forecast to 1 percent. In April, the month following Fukushima but before the German government decided to phase out nuclear power, the Economy Ministry had predicted a 2012 growth rate of 1.8 percent.

The government’s newly pragmatic approach contrasts with the hopes of many environmentalists, who believe that Germany now has an historic opportunity to embrace renewable power rather than pursuing the retrograde step of commissioning new coal burning power plants.

But government ministers are increasingly concerned primarily with ensuring the security of the nation’s energy supply, even though the 30 June legislation mandated that Germany’s share of energy from renewable sources must increase from 17 percent to 35 percent in 2020 and reach 80 percent by 2050. A modest start has already been made, as since the eight reactors were closed Germany increased its share of electricity produced from renewable energy sources from 17 percent to 20.8 percent.

But the renewable power sources will be costly. On 19 October the German Association of Industrial Energy and Power Users complained that electricity price had increased even though its quality has decreased and noted that next year its members will see their electrical power invoices increase by 9 percent.

As for the economics of the shift, electricity from conventional coal fired plants costs roughly $83 per megawatt-hour, the price increases roughly 50 percent to $124 per megawatt-hour for wind energy, $207 per megawatt-hour for offshore wind power, and $268 per megawatt-hour for solar, the last more than three times the cost of coal-fired electricity.

Despite the fact that renewable energy has such high differential costs, most Germans accept it. According to a recent TNS Infratest survey, 79 percent of Germans polled felt that the “new energy” fees were “reasonable,” with only 15 percent considering them “too high.” Germany Trade & Invest economic development agency photovoltaic-industry expert Tobias Homann said, “With the decision to abandon nuclear power earlier this year, it was clear that the road ahead would be challenging. But Germany is in a very promising position to be the first industrialized country to rely entirely on renewable energy.”

Despite the cost associated with renewable energy Germany is one of the world’s largest producers of wind power, with 27 gigawatts of generating power installed, roughly 16 percent of the world’s current wind power generating capacity in the world, making it Europe’s biggest consumer of electricity from wind power.

In the new austere Germany, the shift to renewable energy sources comes at a bad time for the exports-driven German economy, as increased energy costs can only add to the expensiveness of exports. Needless to say, despite Germany’s commitment to preserving the euro, further uncertainties are introduced into German economic long-range planning.

Economic teething problems aside, Germany’s abandonment of nuclear power and embrace of renewable energy will be closely watched around the world not only by nations but the globe’s nuclear and renewable power industries. While startup costs and transition problems have yet to be resolved, Germany is betting on its future, and future generations using solar and wind power will not have to bury energy wastes with a half-life of tens of thousands of years.

Source: http://oilprice.com/Alternative-Energy/Renewable-Energy/Germany-Faces-Sticker-Shock-Over-Renewable-Energy-to-Replace-Nuclear.html

By. John C.K. Daly of http://oilprice.com



  1. By Optimist on November 11, 2011 at 8:02 pm

    No doubt the Germans face some serious challenges here. Replacing all that nuclear capacity won’t be cheap or straightforward. As the man says, now the real work starts. It certainly seems doable. With a public prepared to pay more for clean energy, much is possible. Government certainly has the ability to encourage technological breakthrough, as opposed to the attempt to legislate it that seems so popular in the US.

    The Germans basically decided that nuclear is too risky. Based on the scale of mishap, even if it is exceedingly rare, there is some logic to that decision.

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  2. By tennie davis on November 11, 2011 at 9:35 pm

    Opimist, I don’t see much logic to it.
    If/when they have blackouts because of less reliable power sources people will die.
    No one died from radiation at fukushima.

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  3. By robert on November 11, 2011 at 10:21 pm

    The people of Germany aren’t paying more for clean electricity. They are paying more for coal powered electricity. I’m not a fan of new nuclear power plants with their $10 billion dollar price stage but shutting down a perfectly good operating one is a bit expensive.

    Possibly no civilians died from radiation at Fukushima but I wouldn’t even put money that statement is true.

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  4. By Benny BND Cole on November 12, 2011 at 2:02 pm

    Seems like a mistake to me, but often new technologies or improvements are borne out of necessity.

    The South Africans figured out how to make liquid fuel from coal when they endured an oil embargo.

    If renewable energy sources are very low maintenance, there may be big rewards down the line for the Germans.

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  5. By OD on November 12, 2011 at 2:14 pm

    No one died from radiation at fukushima.

    At face value, that is true, but how many will have their lives cut decades short due to cancer related to radiation exposure? Already, there are reports coming out that children in the area are gaining weight much slower than those outside the exposure zones.  Given all that, I am still a supporter of nuclear power, because I believe it can be done safer and better than we currently are.

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  6. By tennie davis on November 12, 2011 at 4:19 pm

    OD,I could play around with statistics all day long to prove some obscure point.
    Stats should be taken with a grain of salt and logic.
    Example, within the 12 mile danger zone around the nuke plant, how many children have died from bicycle accidents in the last 6 months?
    Gee, maybe we should irradiate ALL the children for their own safety;)
    Concerning the lack of weight gain among the children, my logic tells me it’s likely from stress/lifestyle changes caused by the aftermath of the disaster, not by tiny amounts of radiation.

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  7. By Mark P on November 12, 2011 at 4:51 pm

    I tend to agree with the environmentalists on this one. This is an opportunity to ramp up industries like solar and wind; switching to coal will shift the burden of accomplishing their carbon emission and energy independence goals to future govts/generations. I know they have a balance to strike between short-term economic feasibility and long-term goals, but it’s hard to imagine decisions like this not having a detrimental long-term impact.

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  8. By russ-finley on November 12, 2011 at 5:42 pm

    Germany is betting on its future, and future generations using solar and wind power will not have to bury energy wastes with a half-life of tens of thousands of years.

    If human civilization still exists ten thousand years from now, it will either be so technologically advanced as to laugh at the idea that we buried such a valuable resource …or too technologically backward to find or gain access to it, not that they wouldn’t bury it again real fast if they did find it …eyes rolling.

    The high-level waste generated by our nuclear power plants since the day they started operating is just sitting there in their own parking lots waiting for our government to make decisions–proof positive that they don’t generate large amounts of waste (and that our government is largely incompetent). By law, nuclear power plants have to pay the government a set amount per unit of power generated to fund a permanent waste storage solution. Our government is then supposed to use that money to find that solution. Yucca Mountain ate a pile of that money before being sh*t-canned. I rest my case. The waste issue is largely political, not so much technical.

    Puget Sound, the Gulf of Mexico dead zone, along with various and sundry rivers, lakes, and aquifers all over this country have been compromised by pollution from agriculture, landfills, industry, and sewage. Our landfills are chock-full of deadly toxins like PCBs and heavy metals that are separated from ground water by a thin layer of clay and a plastic liner. Nuclear waste is put into high-strength metal containers and will one day be sequestered thousands of feet underground far away from aquifers and fault lines in bone-dry caverns and salt mines that have been geologically stable for millions of years.

    Most countries reprocess their used nuclear fuel. The United States plans to simply store used fuel in a place like Yucca mountain (but not Yucca mountain). According to the World Nuclear Association, it is reprocessed mainly to extract the unused fuel left over (about 25%) and to reduce the amount of the more problematic high-level waste that has to be stored (by about four-fifths). Reprocessing tends to increase the amount of low-level waste, which is not as dangerous or long-lived (loses its radioactivity much faster). From the WNA:

    •   Immobilise waste in an insoluble matrix, eg borosilicate glass, Synroc (or leave them as uranium oxide fuel pellets – a ceramic).
    •   Seal inside a corrosion-resistant container, eg stainless steel.
    •   Surround containers with bentonite clay to inhibit any groundwater movement if the repository is likely to be wet.
    •   Locate deep underground in a stable rock structure.

    For any of the radioactivity to reach human populations or the environment, all of these barriers would need to be breached, and this would need to happen before the radioactivity decayed to innocuous levels.

    Again, according to the WNA, after reprocessing, all of the “high-level” waste generated to provide a typical European with all of her electricity for her entire life could be held in the palm of her hand–make that both hands for an American.

     

     

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  9. By Ralph on November 13, 2011 at 3:57 am

    A little curious about how the cost per megawatt hours were figured….
    1-What was the “lifetime” in years for the solar PV componant? At what point during the life of the solar PV would Germany be realizing a “paid for” point and be getting these megawatt hours of solar power virtually free?
    2-Once they have reached their production goals for in country wide installations, will the manufacturers be selling rooftop solar units to the United States? Our consumers are striving toward getting consumer owned units and the price for panels should decrease. We can’t wait!!
    Also, how soon will the numerous new models of German electric cars, be tapping into the countrywide solar infrastructure?

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  10. By mok10501 on November 13, 2011 at 5:35 am

    This was not a first German revolution; When Germans decided to shutdown all nukes it was not a shocker at all. They were already importing nuke generated electricity from France and others. If it was France making that decision,however, It would have been a second French revolution. Germans got the money and had two wars but never a revolution. They may have burning with jealousy on revolution against the French. They think they are going to prove something revolutionary by running the whole show with just renewables. Good luck!..Soon, Mercedes and BMW as well as Bayer and others might be leaving the country because of high energy cost that nobody can blame them. Will the German government subsides the nuclear utilities who own these 17 units? If so, don’t we have to add that to the total energy cost? And for how long? And what about the dismentaling cost of those units? Who’s going to absorb that?

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  11. By Sebastian on November 13, 2011 at 9:32 am

    @mok10501:

    and France is still a (netto) importer of electricity from germany.. even without the old risky atomic monsters..

    here is the real problem with French atomic-energy:

    summer – not enough water to cool the reactors, so the french have to import german energy.

    winter – not enough power output to warm the houses (typicaly heated with electricity) – and once more, they have to import our energy..

    i feel better using electricity from my solar plant on my house :)

    And, please attend to your own extremly high energy waste!

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  12. By robert on November 13, 2011 at 11:10 am

    1-What was the “lifetime” in years for the solar PV componant? At what point during the life of the solar PV would Germany be realizing a “paid for” point and be getting these megawatt hours of solar power virtually free?

    If you are homeowner, the manufacturer will guarantee the panels will produce 90% of their rated power for 25 years. Or something like that. So you can assume the panel produces the bare minimum under the guarantee and Solarchina takes the hit beyond that. If a company goes bankrupt, their guarantee will be worth as much as their stock. But other than companies formed to mine the government, everybody thinks THEY will be around thirty years. So their scientists will be working to prevent warantee costs.

    From a physics point of view the conventional thinking is that panels are degraded by cosmic rays, alpha particles, and UV radiation. Someone did a study of panels made in the 70′s and been out in the field 30+ years and found no degradation. There’s theory and there’s data. And technology changes so quickly, do we know what today’s panels would do even if we had data for yesterdays?

    From a financial point of view it doesn’t make any difference. The present value of something thirty years out is discounted down to nothing anyways.

    My personal guess is to assume the panels have a “half-life” of 100 years. That is the output exponentially decays with hundred year old panels produces half their rated output. Beats the heck out of me if this is actually true. It irritates me when people assume panels will mysteriously vaporize in thirty years into a puff of smoke. That’s not true either.

    The inverters are guaranteed for 10 years and make up 5%-10% the cost of the system. Assume they go bad the day after the warrantee expires. It is only the electrolytic capacitors and the switching transistors that go bad if you just want to refurbish them.

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  13. By Wendell Mercantile on November 13, 2011 at 4:43 pm

    The South Africans figured out how to make liquid fuel from coal when they endured an oil embargo.

    Benny,

    I must point out that South Africa got the technology from Germany who had figural it out due because of fuel shortages during WW II.

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  14. By Optimist on November 15, 2011 at 2:26 pm

    Opimist, I don’t see much logic to it.
    If/when they have blackouts because of less reliable power sources people will die.
    No one died from radiation at fukushima.

    Call me… well, an optimist, but this is Germany we are talking about. I doubt the alternative to nuclear will be of significantly lower quality. To suggest that the decline would be severe enough to cause death is nothing more than speculation.

    The alternatives may well be more expensive. Again, I doubt the increased cost would be enough to drive industry out of Germany. If it got to that, they might just go back to nuclear.

    And it is a bit early to state that no one died at Fukushima. It will take decades before we know the true full impact.

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  15. By Wendell Mercantile on November 15, 2011 at 4:14 pm

    Again, I doubt the increased cost would be enough to drive industry out of Germany.

    When they are surrounded by countries such as Poland, the Czech Republic, Slovakia, Italy, Lithuania, Latvia, Romania, etc. all anxious to put their people to work?

    Germany is subject to the same pressures we are when it comes to looking for lower production costs. (Why do you think so many of our companies build things in Mexico?)

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  16. By tennie davis on November 16, 2011 at 12:38 am

    Optimist, In my opinion, it won’t take decades before we know (most of) the impact of the disaster, because we already have chernobyl as a worst case study for historical experience.
    Also the japanese are much more transparent / truthful about the facts.
    They will be spending alot of valuable time finding solutions to problems and learning from past mistakes so that nuclear power will be even safer than it is now.
    The communist government wasted valuable time trying to cover up their mistakes, and because of this gross incompetence, many more people died needlessly.
    BTW congrats on being an optimist, we need more like you.
    Doomers are not only annoying, they lack the imagination, intuitiveness, skills, and common sence to solve problems and help the world become a better place for all.

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  17. By Tom Harris on November 16, 2011 at 1:43 am

    Robert Rapier said:

    … While startup costs and transition problems have yet to be resolved, Germany is betting on its future, and future generations using solar and wind power will not have to bury energy wastes with a half-life of tens of thousands of years.


     

    Actually, one can hold a used CANDU reactor bundle in one’s hands safely after about 300 years. It is the low level waste that has “a half-life of tens of thousands of years”.

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  18. By mok10501 on November 16, 2011 at 11:00 pm

    Sebastian said:

    @mok10501:

    and France is still a (netto) importer of electricity from germany.. even without the old risky atomic monsters..

    here is the real problem with French atomic-energy:

    summer – not enough water to cool the reactors, so the french have to import german energy.

    winter – not enough power output to warm the houses (typicaly heated with electricity) – and once more, they have to import our energy..

    i feel better using electricity from my solar plant on my house :)

    And, please attend to your own extremly high energy waste!


     

    @Sebastian:

    So you had over-generation that nobody knew about it. Maybe Merkel was so frusturated by not be able to sell her electricity and that is why she is shutting down the nukes. But what about those companies who own nukes and are planning to collaborate and may also move to England? Are they going to sell France too? Or, to Czhecks may be? I was wondering what kind of solar plant that you have in your house that produces that much ekectricity that you can run(Heat, cool, cook & home electronics and light)? And how much that cost you to install? Are you also selling your over-production to E-ON?

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  19. By Doug on November 17, 2011 at 11:09 am

    Once again no one’s mentioned the still-unsolved problem of power storage. Cost alone won’t be the reason Germany builds coal plants. They’ll need some way to power the grid when renewable sources aren’t providing enough power.

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  20. By russ on November 18, 2011 at 4:11 am

    Wendell Mercantile said:

    The South Africans figured out how to make liquid fuel from coal when they endured an oil embargo.

    Benny,

    I must point out that South Africa got the technology from Germany who had figural it out due because of fuel shortages during WW II.


     

    Not only that, South Africa started shutting down gasifiers as soon as they had access to oil on the international market.

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  21. By moiety on November 18, 2011 at 6:27 am

    Sebastian said:

    @mok10501:

    and France is still a (netto) importer of electricity from germany.. even without the old risky atomic monsters..

    here is the real problem with French atomic-energy:

    summer – not enough water to cool the reactors, so the french have to import german energy.

    winter – not enough power output to warm the houses (typicaly heated with electricity) – and once more, they have to import our energy..

    i feel better using electricity from my solar plant on my house :)

    And, please attend to your own extremly high energy waste!


     

    I am afraid that is just not true.

     

    France imported electricity from Germany to keep its industrial region in the north east running at its current capacity. Germany who was already importing some electricity from the Czech rep now imports much more from them and now from the French. And the plant that will supply this energy is a nuke. Not only that but in previous posts on this forum, I point out that Germany is restarting older coal plants to keep its energy level as well as using the nord stream gas line.

    What all this means is that in the first half of the year, the German electricity exports fell to 4 TWh down from 11TWh from the previous year due to the shutdowns. As plants continue to shut down, this situation will get worse unless

    1. Germany build even more coal plants
    2. Germany drives renew ables

    The problem with 1 is that while consumer prices will remain comparable to what they are now, Germany’s environmental concerns will be in tatters. The problem with 2 is cost. For example, as I showed previously, the spot price for current industrial power is around 5 times less than the subsidy given to solar power. That is just the subsidy for the power not including the base cost of the electricity and subsidies for the producers and researchers.

    Germany has a big problem and as they are going now, I do not see Germany remaining green, cheap and secure on electricity.

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  22. By Optimist on November 21, 2011 at 4:36 pm

    The South Africans figured out how to make liquid fuel from coal when they endured an oil embargo.

    Benny,
    I must point out that South Africa got the technology from Germany who had figural it out due because of fuel shortages during WW II.

    Not only that, South Africa started shutting down gasifiers as soon as they had access to oil on the international market.

    UTTER BS, Russ! Where do you get this horse manure? Those gasifiers are still operating. Profitably since the late 90s.

    Here is a sample of some facts:
    Sasol to invest R40bn in 2 years
    Sasol plans to spend R40bn on growth projects in SA over the next two years, senior group executive Lean Strauss said on Friday at the launch of the group’s new cobalt catalyst plant.

    Sasol has increasingly been diversifying into chemicals, gas and clean energy projects.

    The group’s capex in SA over the past years has been R42bn.

    Sasol was launching its R1bn new cobalt catalyst plant at the group’s Sasolburg site.

    The plant will initially supply the catalyst to its gas-to-liquids projects in Qatar, Nigeria and Uzbekistan.
    Shut down? Time to pull your head out of the sand, Russ. SASOL is doing very well, thank you very much. Exporting its technology all over the world, including the US.

    If there is anything to Peak Oil, these guys are going to be making money hand-over-fist. As they have been doing for the last decade and a half.

    Keep an eye out for them.

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  23. By Optimist on November 29, 2011 at 2:36 pm

    Not been able to find your sources, Russ? It’s always the last place you look isn’t it?

    Meanwhile, here are some updates from South African CTL. The company is called SASOL for Suid Afrikaanse Steenkool Olie en Gas Korporasie (South African Coal Oil and Gas). I guess they didn’t care for SASOG.
    1. Sasol First-Half Earnings to Rise at Least 45% on Oil, RandNov. 23 (Bloomberg) — Sasol Ltd., the world’s biggest maker of motor fuels from coal, said earnings in the six months through December may rise by at least 45 percent from a year earlier following oil-price gains and currency depreciation.
    2. Sasol reduces forecast for synfuel productionENERGY and chemicals group Sasol has revised its forecast for synthetic fuel production for the 2012 financial year from between 7,2-million and 7,3-million tons to between 7-million and 7,2-million tons, the firm said yesterday. That’s a lot of gasification, not so Russ?
    3. Sasol to build 140 MW gas-to-power plant in MozambiqueSouth African petrochemicals giant Sasol — which is the world’s top maker of motor fuel from coal — plans to build a 140 MW gas-to-power plant in Mozambique, with first power from the project coming in late 2013. Now neigboring countries are benefitting from successful gasification.

    Just let me know if you are interested in more reading material, Russ. You seem to have difficulty with getting to the truth on this particular matter.

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