How to trim a trillion. A plan favored by Germany’s Environment Minister Peter Altmaier and the coalition government would knock €1 trillion in renewable energy subsidies down to a parsimonious €700 billion. Just think what a portion of that would buy in nuclear R&D.
Today’s blog is an “equal time” posting.
I’ve written several entries over the last few months on how nuclear power looks ready for a comeback in Japan, where authorities virtually shut it down following the March 2011 meltdowns at the Fukushima Daiichi power plant.
What about that other industrial powerhouse that also decided to walk away from nuclear – Germany?
I haven’t written as much about that, in part because Germany is not giving out the same “bring it back” signals as Japan is.
But there have certainly been subsurface rumblings from Deutschland, most recently this week, when Environment Minister Peter Altmaier warned that the decision to close all nuclear plants by 2022 could by that time cost the country one trillion euros ($1.3 trillion) in government subsidies alone, Bloomberg reported.
Exercising financial prudence, Altmaier and the coalition government to which he belongs have proposed cutting €300 billion ($395 billion) from that amount, the article states. That would bring the bill down to a mere €700 billion ($923 billion).
WHAT ELSE €700 BILLION COULD BUY
Yes, €700 billion, with a “b”, for a reduced bill. That’s enough money to build at least 70 conventional nuclear reactors with significant cost overruns (more than 70 really, but I’ll keep the math neat and simple). And 70 is about 4 times more than the 17 reactors the country had been operating prior to the shutdown decision, when nuclear had provided a quarter of Germany’s electricity.
That means that the money that Chancellor Angela Merkel’s government plans to spend subsidizing renewables could in theory enable the country to convert to 100 percent nuclear, with plenty of electricity left to also export to neighbors. And that’s if it were to start from scratch with all new and conventionally designed plants. It’s a slightly cheeky, disingenuous point to make, in part because the whole idea of Germany spending on renewables is to, well, transition to renewables. And to shut nuclear.
Nothing wrong in general with a strong mix of renewables. We’re going to need them in our climate fight.
But let’s look at it another way. If Germany were to put even, say, a quarter of the €700 billion into research and development of nuclear alternatives like thorium and molten salt reactors and pebble beds, among others, it could seed a bright, safe, efficient, low waste, CO2-light energy future with minimal weapons proliferation risk.
Alas, Germany aims for renewables like wind and solar to furnish 35 percent of its electricity by 2020, and 80 percent by 2050. It has already closed eight of its 17 conventional reactors, and will shutter the other nine by 2022.
It is currently filling the gap in large part with fossil fuels, in the process increasing its CO2 emissions at the expense of global warming. In 2012, renewables accounted for 22 percent of German electricity, nuclear for 16 percent, coal for 45 percent, and natural gas for 11 percent, according to industry group BDEW, Reuters reported via the Financial Post recently. (Some of the rest was almost certainly imported nuclear electricity from France).
ON THEIR MINDS?
To be clear, Altmaier to my knowledge said nothing this week about rethinking the renewables target, nor anything about reconsidering nuclear.
What he did say was that he wants to cut the costs of the transition to renewables. After a 2012 in which national GDP grew by a mere 0.5 percent, that makes sense. You have to also wonder whether German business, industrial and political leaders might, just might, be ruminating nuclear in the back of their minds. I give it a few years before those thoughts come forward.
“I don’t want to limit the renewable expansion, I want to make it affordable,” Altmaier told reporters in Berlin, Bloomberg reported.
The subsidies are costing Germany in more ways than one. Subsidies are distorting financial realities and scaring away real investors, who know that renewables are not truly competitive without the government aid, the Reuters January story noted.
What’s more, as I wrote in December, the renewable expansion requires a $56 billion investment in grid infrastucture.
Renewables also come with the stigma that they do not provide round-the-clock power, the way low-CO2 nuclear or CO2-intense fossil fuels can. As Reuters pointed out, “A study drawn up by the Swiss Prognos Institute in November projected a possible gap of 8 gigawatts (GW), or 9 percent of the assumed maximum amount of energy required by 2020, if nuclear plants were phased out as planned and not replaced by equally reliable alternatives.”
A trillion euros for an energy shortfall?
I’m not even sure what a trillion euros looks like. But I’m envisioning an attractive hue if a portion of it is wrapped up in alternative nuclear reactors.
Photo from Christian Doppelgatz/KUXMA via Wikimedia