USA | How Merkel Decided to End Nuclear Power

Posted on August 13, 2011

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USA | NEW YORK TIMES | 13 August 2011

BERLIN — How did Germany, Europe’s economic powerhouse, turn its back on nuclear energy?

Most directly, the decision belonged to Chancellor Angela Merkel. Unlike other world leaders, she is a trained scientist, with a Ph.D. in physics.

She reached the momentous decision to phase out nuclear power by 2022 after discussing it one night over red wine with her husband, Joachim Sauer, a physicist and university professor, at their apartment in central Berlin, according to people who spent many hours debating the issue with her but spoke only on the condition that they remain anonymous.

The decision to switch off Germany’s nuclear power plants has been widely portrayed as a sudden U-turn by Mrs. Merkel. After the nuclear disaster in Japan in March, the German public, long opposed to nuclear power, was ready to pull the plug, and their chancellor, known for shifting with the prevailing political winds, complied.

But those close to Mrs. Merkel described her change of heart as something more like an awakening. Powerful industrial and energy interests fought the shift, but Mrs. Merkel, her allies say, is ready to lead Germany into a new era in which wind and solar energy, along with enhanced efficiency, can be developed fast enough to replace the lost power from nuclear plants.

The East German scientist who came to politics only after the fall of the Berlin Wall in 1989 seemed to echo some of the fervor of those times: Although Germany is not known for tsunamis, or strong quakes, she said the risks of a nuclear accident were just too enormous to be controlled by humans. A Japan-like disaster could happen again, anywhere. Safety and security were paramount.

In contrast to her excessive caution in the step-by-step rescue of the euro zone, she showed no hesitation in reversing her original decision of just last autumn to prolong the life of Germany’s nuclear plants. Now, she has committed Europe’s largest economy, a leading exporter dependent on keeping industry competitive, to shutting down the source of nearly a quarter of its electric power.

In the view of supporters like R. Andreas Krämer, director of the Ecologic Institute, an independent research organization in Berlin, this decision “will be seen as historic.”

Whether that is so will not be clear for years. But it does resonate as one of the large leaps that Germany has a tendency to make, often surprising its European and American partners.

Since the near-total destruction of 1945, Germany has pulled off the Wirtschaftswunder, or economic miracle, of the 1950s, weathered protest and terrorism in the 1960s and 1970s while giving birth to what is now Europe’s most potent Green party, and in the 1980s witnessed fresh civic protest — this time in East Germany — that felled the Berlin Wall.

In the 1990s, Germany shouldered the huge financial and psychological costs of reunification, calmly rebuilt its capital in Berlin and retooled foreign policy not just to reassure Western allies about reunification but also to support the former Communist countries of the east in their zest to join the European Union.

The decision to end nuclear power is part of this narrative.

Norbert Röttgen, the federal environment minister, said recently that if his country and its 80 million people could make the leap to a nuclear-free economy, then Germany would become the first major industrial nation to make the transition toward efficient renewable energy.

While conceding that there are challenges, he insists that the goals are attainable and that the new technology will win Germany new export markets for decades and make it an even more attractive place to do business.

Innovation, advanced technologies, common sense and cost-efficient measures are the focus of what Mr. Röttgen called a policy “that is environmentally sound, climate-friendly and in line with market and competition principles.”

“In the best tradition of German engineering,” he said, “new technologies and products, new export opportunities and thus employment and growth will be created.”

Mr. Krämer, the Ecologic Institute director, said: “We trust ourselves to do it. We have mastered the technology and we know what we have to do.”

Ranged against this optimism are Germany’s big four power suppliers, a host of doubting analysts and economists who say that the government has failed to calculate the cost. In a country that always had a vocal opposition to nuclear power and now has a strong Greens party, Mrs. Merkel may shore up political support, “but she has failed to take into account the broader economic and political costs,” said Matthew Hulbert, an energy expert at Clingendael, the Netherlands Institute of International Relations.

Economics Minister Philipp Rösler says switching off nuclear power will increase the cost of a kilowatt hour of electricity by just one euro cent. Mr. Röttgen calculates the cost per household during the transition as roughly one extra cup of coffee latte — €2.50 to €3, or about $3.50 to $4.25 — per month.

But the nuclear industry, led by E.ON, Vattenfall, RWE and EnBW, says that it will be the private sector, particularly energy companies, that will have to pay for the switch to renewables and other energy sources, like natural gas and even a dozen or so new coalplants. “We are not talking about peanuts here, but hundreds of billions of euros,” said Jürgen Grossmann, the chief executive of RWE.

On the other side of the equation, the government will no longer pay for nuclear subsidies, which, according to Greenpeace, have totaled about €200 billion, or about $285 billion, since West Germany began research and development of nuclear power in the 1950s. Subsidies last year totaled €4.1 billion, according to a recent study by Green Budget Germany (Forum Ökologisch-Soziale Marktwirtschaft), an independent environmental research organization.

Another factor is the likelihood that Germany, which already gets more than one third of its natural gas from Russia, will grow more dependent. Mrs. Merkel, however, disputed this point when she met President Dmitri A. Medvedev and other top Russian officials in July. When Deputy Prime Minister Viktor A. Zubkov, who is also chairman Gazprom, the state-owned natural gas export monopoly, openly relished the prospect of selling more to Germany, the chancellor coolly responded, “Let’s wait and see.”

Clearly, something big will have to change. Germany imports nearly 60 percent of its energy, according to the International Energy Agency.

Renewable sources like wind and solar power currently make up only 17 percent of the power mix. The government envisions that amount roughly doubling by 2020 and reaching 80 percent by 2050.

It also plans vast expansion of the national grid to move electricity from the north coast, where wind is plentiful, and the south, where solar energy is more abundant, to the key industrial areas where it is most in demand. According to the German Energy Agency, 1,500 kilometers to 3,600 kilometers, or 930 miles to 2,200 miles, of new extra-high voltage power lines will have to be built by 2020, financed by grid operators.

Cost estimates vary widely, depending on the technology used, but the agency estimated basic overhead lines with standard transmission would cost €950 million a year over seven years. High voltage direct current transmission cost more than twice that.

Some big businesses are worried. Industrial production, which is generally energy intensive, accounts for 28 percent of the German economy, compared with 22 percent in the United States. The world’s leading chemicals company, BASF, uses as much natural gas in its factories as the entire city of Berlin.

Germany already has high energy costs compared with elsewhere around the world, said Michael Grabicki, spokesman for BASF. “German industry,” he said, “has to remain competitive.”

By contrast, many of the Mittelstand, the small and medium family-owned companies that form the backbone of Germany’s economy, are excited at the prospect of developing new technology and perhaps breaking the monopoly of the four big energy companies.

“This is a great chance for us,” said Christian Albrink, regional director of Soleg, which plans and sells solar heating for homes and industry. “It needs steady nerves if the government is serious about pushing through its policies.”

The big energy companies are not taking the change lying down. In April, RWE filed a lawsuit against Mrs. Merkel’s interim decision to close seven of the oldest nuclear plants immediately.

Mr. Grossmann, the RWE chief, said Mrs. Merkel’s move would leave a shortfall of more than 100 terawatt hours of electricity, roughly 17 percent of the total consumption. He said that would have to be made up through imports from places like France and the Czech Republic, and by building new coal- or gas-fired plants, which, in contrast to nuclear power, produce global warming gases.

Claudia Kemfert, energy expert at the German Institute for Economic Research (DIW Berlin) and professor of energy and sustainability at the Hertie School of Governance in Berlin, said coal already accounted for 42 percent of Germany’s electricity needs. “The government has yet to square the circle when it comes to ending nuclear power and reducing CO2 emissions,” she said.

The government acknowledges that natural gas and coal-fired power plants will continue to play a big role. They are, after all, able to provide large chunks of power at any time — unlike solar or wind energy, at least with current storage technology. The government, through the state-supported bank KfW, has set up a special €5 billion fund to support construction of offshore wind farms. It also intends to build storage facilities for renewable energy — yet another expense.

At the same time, German companies and households are being urged to increase efforts to save energy. Subsidies are planned over the next three years to help modernize housing stock and to wean the automobile industry — a powerful symbol of Germany’s engineering and export might — away from petroleum and to develop electric cars.

Part of a series on Germany’s changing role in Europe and the world.

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Posted in: USA