German electricity prices are likely to increase as the government accelerates the shut-down of nuclear power. Citizens chose financial risks over health risks as they watch the Japanese battle a major nuclear reactor crisis. The irony of the new plan is at least four French nuclear reactors reside along the German border. The disaster risks remain. German citizens may end up buying electricity generated by French nuclear power.
Germany pulled-in the targeted date for nuclear reactor shut-down to 2017 from 2022. Chancellor Angela Merkel calls it, “a measured exit.” Seven of the oldest German nuclear reactors are down for safety inspection. To bridge the 23% to 25% nuclear power source of German electricity, the government plans to accelerate wind and solar power while relying on more coal-fired generators and gas power stations.
The chancellery insists the nuclear exit will not increase electricity prices. That promise may go up in smoke:
Remaining German nuclear cores must be reinforced enough to withstand an airliner crashing into the reactor. The millions of Euros to accomplish this end up on taxes or electrical bills;
Fueling German solar power growth is a one billion Euro monthly tax incentive for individuals and companies. This Feed-In Tariff is part of the German Renewal Energy Act, the cost shared by all rate payers. If solar power needs acceleration, the tariff will increase;
Bloomberg reports 26 new German coal-fired electrical plants are in-construction or planning. Utilities expect a return for that investment;
Germany and Russia are developing new natural gas pipelines to feed consumers and gas power stations. INDEX Mundi estimates German natural gas consumption increased 1.63% annually over the last three decades, about the same rate as the country’s GDP. Natural gas pricing is volatile. Germany only generates one-third of its natural gas needs. Russia and other countries control the valve and price.
The Chancellery promises to reduce surplus electricity exports, if shortages develop. A lower European supply of electricity in the face of higher demand will increase prices.
France is not planning to shut-down their nuclear power system which generates 78% of their electricity, according to EnerPub. France will gladly sell Germany excess electricity once the German reactors shut down. The French Cattennom and Fessenheim nuclear power stations are along the Western German border. Deutschland is down-wind from any French nuclear crisis.
Rapidly shutting down the nuclear power program is a rash decision for Germans, who pride themselves on Ordnung – there must be order. Politics and emotion are disrupting planning and order. Nuclear power opposition recently won an election, Baden-Württemberg, which includes Stuttgart and the German auto industry. There goes rashness and order.
Germany will likely reverse the nuclear shut-down decision. A huge investment by the government and business is required to replace German nuclear power. Wind, solar, coal, and gas combined will not meet Germany’s growing needs. The demand for a sizable return on investment, and a potential shortage of electricity, drives up prices. German business growth suffers. France sells expensive electricity to Germans from reactors just west of Deutschland.
When it comes to Germany’s electricity future, Es ist nicht alles klar – it is not all clear