Economics, Energy and the Environment

The Costs of German Fear: Energy Fact of the Week

Germany was known for decades after World War II as the home of Europe’s “economic miracle,” which was largely the result of economic minister Ludwig Erhard’s decision to move rapidly to decontrolled markets in the late 1940s. Germany could use Erhard again as its energy minister just now, as Germany’s heavy-handed intervention into its energy market is playing havoc.

When I visited Germany in the fall of 2008 on an energy junket as a guest of the German government, just about everyone I met said that the Merkel government was going to have to reverse the commitment of the previous left-leaning coalition government to phase out Germany’s nuclear power by the year 2020 if it was to have any chance of meeting the European Union’s greenhouse gas emission reduction targets. (The nuke phase-out had been the main condition of the coalition partner Green Party in the previous government—another object lesson in why proportional representation is a bad idea. But that’s a seminar for another day.)

But in the aftermath of Japan’s Fukushima nuclear power plant meltdown, the Merkel government has caved on nuclear power, even though no German nuclear plants are vulnerable to tsunamis, and announced that Germany will go through with the phase out of its nuclear plants by 2022. As of 2010, nuclear power contributed 10 percent of Germany’s total energy consumption, and over 22 percent of its electricity. (See Figure 1 below.)

Figure 1: Primary Energy Supply in Germany, 2010

In May the International Energy Agency estimated that the phase out decision would add at least 25 million tons of CO2 to Germany’s greenhouse gas emissions, though this may prove an underestimate if Germany prolongs or expands the use of coal-fired power plants to fill the gap, as is likely. Last week Germany’s economics ministry released a study that estimated that the cost of the nuclear phase out in lost jobs and higher energy prices and carbon emissions permit fees (since Germany is part of the European carbon trading scheme) will be about $46 billion.

But wait—Germany has been a smashing success at renewable energy hasn’t it? They are the world’s leading producer of solar power, accounting for 43 percent of the world’s total installed base. The growth numbers are astounding: between 2000 and 2010, according to the latest BP Statistical Review of World Energy, Germany’s wind power capacity grew 516 percent, and its solar power capacity by 22,689 percent! Figure 2 below displays the growth of solar power in Germany during this time period. Wow!

Figure 2: Growth of Solar Photovoltaics in Germany, 2000 – 2010

Of course, solar power, which Germany has heavily subsidized, started from almost nothing in 2000, so this is a misleading numbers game. After all of this effort, solar power accounts for only 1.1 percent of Germany’s total electricity supply, and supplied only 5 percent as much electricity as its nuclear power plants. Figure 3 shows that for all of the effort and subsidies Germany has put behind wind and solar power, they still both account for a fraction of the power output of nuclear power in 2010.

Figure 3: Wind, Solar, and Nuclear Capacity in Germany, 2010

To make up for the lost nuclear power, solar capacity would have to grow more than 20-fold from its current level, but Germany is already cutting back on solar subsidies because it cannot afford it. This is the main reason the Institute of Energy Economics at Cologne University estimates that most of the lost nuclear electricity will be made up gas-fired power, and supply from other countries (ironically, some of it nuclear if it is purchased from France, Switzerland, or Belgium).

Source: BP Statistical Review of World Energy 2011

10 thoughts on “The Costs of German Fear: Energy Fact of the Week

  1. “Figure 3: Wind, Solar, and Nuclear Capacity in Germany, 2010″

    Figure 3 is wrong. Germany does not have 350 GWe nuclear power. Germany has just 20 GWe nuclear power.

    • “These figures are average daily output by source on an annualized basis, so the nuke figure is right, but I should be more clear on this. The solar and wind figures may be incorrect..” he is checking the solar figure.. Typically most solar and wind fan boys don’t like to do average daily output calculations.

  2. When will conservatives realize that the most patriotic thing you can do is support clean, domestic power generation? Interesting how you say nothing about the prohibitive costs of nuclear and how it couldn’t even survive with out tax dollars. I guess as long as the tax dollar go towards something you like, it’s not “Big Government.” Swine!

    • Actually its not just conservatives that see the benefits of nuclear energy. Im left of left and ill say the anti nuclear movement has become a scourge with respect to legitimate environmental concerns by their support of policies that increase atmospheric CO2 and CH4. All nuclear capacity not realized in the last 30 years became coal. Thats a incredible destructive legacy.

      Beyond belief really.

  3. These figures are average daily output by source on an annualized basis, so the nuke figure is right, but I should be more clear on this. The solar and wind figures may be incorrect; I’ll go back and doublecheck.

  4. The 350 gigawatt for nuclear power in Figure 3 is dead wrong. This is close to the total for the whole world which I think is 440 gigawatt. The U. S. has 104 operating nuclear plants with about 100 gigawatts. The figure of 20 gigawatts nuclear for Germany makes sense.

  5. Dear Mr. Hayward,

    you wrote “After all of this effort, solar power accounts for only 1.1 percent of Germany’s total electricity supply, and supplied only 5 percent as much electricity as its nuclear power plants.”

    Just today, the Association of German Energy Suppliers (BDEW) announced the numbers for the first half of 2011: Solar power now constitutes 3.5% of total electricity supply, and though the numbers for nuclear power are not out yet, solar is likely to have contributed roughly 25% of the output of Germany’s remaining nine nuclear power plants. (8 others were shut down after Fukushima).

    That’s rapid change, isn’t it?

    Jens Kendzia

    • Is that a percentage of energy supply or of energy demand? Last time I checked, Germany had become quite a good customer of some neighboring countries’ nuclear industry, namely France and the Czech Republic.

      @ Steven Hayward: Nobody will confuse your numbers if you get the units right: GW vs. GWh.

      On a side note, whenever I come across some public PV installations and I compare the KWh generated in the last 12 months with my own power consumption at home (they often have large LC displays boasting the generated kWh), I must hold my breath to not get angry at the total waste of money. Examples? Ca. 200 sqft installation on a local train station with 316 (!) kWh generated over the months of January to (end of) August, McDonald’s with some 3000kWh over 12 months (but a much larger installation – a full McDonald’s rooftop!). My personal consumption is about 4000kWh. Heating and transportation NOT included of course (natural gas & diesel).

  6. You may find this Spiegel article,1518,786048,00.html interesting; (it pretty much agrees with the common sense in Stephen Hayward’s article).

    Here are the German energy statistiscs:

    Photovoltaics are a nice and expensive gadget, and a major export of Germany (especially to captive quasi-bankrupt countries in Southern Europe). All the photovoltaics of the world can not replace a single nuke (in its ability to power an electric train). Even if interconnected with massive superconductors (assuming they are free). A nice hobby, heavily subsidized with O.P.M.

    Photovoltaic and wind fans (all preachers of Salvation and lovers of O.P.M) often deliberately confuse the public with massive exponentially growing figures of Installed Capacities. They conveniently forget availability or capacity factors. Also the fact that as more and more of these stochastic sources come on line, the bigger the problem they create on a network. Unless, of course, we consumers are trained to turn on the washing machines only when the wind blows or the sun shines. But I am anxiously waiting to see electric trains, or foundries, or hospitals operate on photovoltaic power. I know… backup power, fancy storage… wires, control systems, gadgets… Lots of O.P.M.

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