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| Fig. 1: Dmitry Medvedev takes photos at the Nord Stream pipeline. (Source: Wikimedia Commons) |
In 2011, after the infamous Fukushima Nuclear Disaster, German public opinion dramatically shifted against the use of nuclear energy. In fact, one national poll conducted soon after the disaster recorded that 80% of Germany was opposed to the government's existing policy of maintaining and expanding nuclear energy. [1] As a result, the German government under Angela Merkel was forced to phase-out all nuclear energy by 2022. In 2011, Germany received 140 TWh of its energy from 17 different domestic nuclear reactors, amounting to 22.4% of its total electricity. [2] The speed, popularity, and near unanimity of the decision, belied the enormous challenge that lay ahead. Today, five years into the program, it is clear that de-nuclearization has had far greater economic and geopolitical consequences than previously anticipated.
Some of the cost associated with phasing out nuclear energy stems from a program known as Energiewende, which involves the heavily subsidized expansion of German renewable energy sources with the stated goal of reducing German greenhouse gas emissions by 40 percent by 2020 and 80 percent by 2050. [3] Although the program began before the Fukushima Disaster, it has largely become associated with the phasing out of nuclear energy because now it is seen as a replacement for the lost nuclear energy. Thus far, the program has cost Germany $150 billion and is expected to cost a total of $500 billion by 2025. [4] German consumers have had to shoulder much of the burden of the program in the form of high electricity bills. At the start of the program, German citizens were told that they would be paying no more than 1 extra Euro per month in electricity bills. In reality, they have had to pay double what they were paying before, which is 40 percent higher than the rest of the EU. [4] German consumers pay a surcharge of around 20 euros, and German households pay more for electricity than any other country except Denmark, which pays 0.308 per kilowatt hour versus Germany's 0.298 per kilowatt hour. [5] The increase is largely due to the subsidies awarded to the power companies by the government. The government has set a fixed price for energy above the market price, and consumers must make up the difference. It is unclear whether the subsidies are sustainable in the long-run. [6]
The program has had some positive effects, including an increase of renewable energy generation, from 6 to 30 percent of total power production. [4] It is also projected to create many jobs in the renewable energy sector. By 2020, the number of jobs in the renewable energy sector is projected to rise to between 500,000 and 600,000. [7] Moreover, the program is popular among the German public. According to a study conducted by the German Renewable Energies Agency (AEE), 95% of German's saw the expansion of renewables as extremely important in 2017, and there is a societal consensus in support of Energiewende. [5]
Despite the fact that the German government has promised to replace its lost nuclear energy with renewable energy sources, such as wind, solar, and hydropower, much of the replacement energy will likely come from "dirtier" sources, such as natural gas. Simply put, renewable energy technology is not yet a point where it can reliably deliver the lion's share of Germany's electricity needs. Although the Energiewende program has made huge strides in increasing the proliferation of wind and solar energy, wind and sunlight patterns are still highly variable and the technology needed to store surplus energy on windy and sunny days to be used during calm or cloudy days or at night is still inadequate. [4] As a result, Germany still needs a fossil fuel-based energy system to fill in the gaps that the renewable energy system leaves open. [4] In 2015, approximately 10% of German energy came from natural gas, and approximately 40% came from coal. Yet coal has fallen out of favor due to its high levels of pollution. German demand for natural gas in power production, on the other hand, is projected to grow and even peak in 2025. [8] This is good news for Russia, which is the world's largest exporter of natural gas and already provides Germany with 40% of its total natural gas. [8] That dependence is expected to grow to 50 percent by 2025. [8] However, this is bad news for European and U.S. influence. Russia is already an antagonist on the global scene and Germany's increased dependence on natural gas gives Russia increased leverage over European and U.S. sanctions. Moreover, the Nord Stream, a massive under-sea gas pipeline from Russia to Germany was completed in 2011 and carries 55 billion cubic meters of gas from Russia to Germany. [8] Russian officials have made visits to showcase the pipeline, including one that former President and current Prime Minister Dmitry Medvedev made in 2010 (Fig. 1). The pipeline bypasses land routes over Ukraine, giving Russia even greater control over the supply of natural gas. Now, in an effort to better cover demand created by the shuttering of nuclear power, Merkel has called for a $10 billion expansion to the pipeline, thereby doubling natural gas shipments. [8] As a result, Russia will gain even greater leverage over the west.
Thus, the German plan to phase out nuclear energy by 2022 has created significant burdens for the country. It has created large economic costs in the form of high energy prices, costly subsidies, and expensive clean-up and storage costs. The plan has also geopolitically weakened Germany, the rest of Europe, and the United States in relation to Russia. Now that Germany is far more dependent on Russian natural gas than it was before it ended its nuclear energy program, Germany no longer has the power to stand-up to Russia on the global stage when Russia behaves badly. If Russia decides once again to bomb moderate Syrian rebels, prop up murderous dictatorial regimes, or meddle in other country's elections, the United States has lost an important partner in standing up to Russia.
© Jonathan Faust. The author warrants that the work is the author's own and that Stanford University provided no input other than typesetting and referencing guidelines. The author grants permission to copy, distribute and display this work in unaltered form, with attribution to the author, for noncommercial purposes only. All other rights, including commercial rights, are reserved to the author.
[1] A. Liegl, "Fukushima's German Repercussions,," PHysics 241, Stanford University, Winter 2014.
[2] X. M. Lee, "Germany's Change of Mind,," Physics 241, Stanford University, Winter 2015.
[3] H. Graupner, "What Exactly is Germany's 'Energiewende?," Deutsche Welle, 22 Jan 13.
[4] A. Becker, "German Issues in a Nutshell: 'Energiewende'," Deutsche Welle, 9 Jun 17.
[5] D. Meyer, "German's Just Love Paying Sky-High Prices for Green Energy," Fortune, 8 Aug 17.
[6] M. Ramadan, "The Economics of German Nuclear Power," Physics 241, Stanford University, Winter 2016.
[7] P. Hockenos, "Where the Energiewende Creates Jobs," Clean Energy Wire, 30 Mar 15.
[8] W. Zha and A. Shiryaevskaya, "Germany is Addicted to Russian Gas," Bloomberg, 4 Jul 17.
