The German Nuclear Exit

November 9, 2012

By PennEnergy Editorial Staff 

Source: Bulletin of Atomic Scientists

The Bulletin of Atomic Scientists (BAS) has released its latest issue, The German nuclear exit, featuring five comprehensive editorials on the complexities of the German nuclear phase-out. The first of this six-part installment to be presented on PennEnergy.com offers an introductory overview from BAS deputy editor John Mecklin, and the first editorial analysis in this special issue from Alexander Glaser, a Princeton researcher and member of the Bulletin’s Science and Security Board.

Part 1: The German nuclear exit: An introduction

The German Nuclear Exit: An Introduction (Part 1)

By John Mecklin

Shortly after the accident at the Fukushima Daiichi Nuclear Power Station in 2011, the German government abruptly reversed its policy on nuclear energy, deciding to phase out the country’s nuclear industry entirely by 2022. Despite the seriousness of the situation in Japan, the German decision—which shuttered eight reactors almost immediately and set staggered deadlines for nine remaining nuclear plants to close—was met with no small amount of international incredulity.

Among other things, the phase-out was widely criticized as an exercise in panic politics, and, as Alex Glaser writes in this special issue of the Bulletin—“The German nuclear exit”—the news headlines were sometimes vitriolic. (The business website Forbes.com probably won top honors in the hyperbole sweepstakes with this nuanced take: “Germany—Insane or Just Plain Stupid?”) Outside Germany, major media outlets continue to question the wisdom of the phase-out, often with emphasis on its climate change implications. At a time when greenhouse gas emissions need to be reduced, the critics wonder: How could any country casually give up such a huge investment in emission-free energy?

The German decision to pursue a nuclear-free future was, however, anything but precipitous or unmindful of climate change. Because of a combination of historical and political factors, Germany has in fact been retreating from the nuclear sector for decades— and from its beginnings, the nuclear phase-out was intimately tied to what is known as the Energiewende, an aggressive, comprehensive turnabout in policy that aims for a national energy portfolio dominated by renewables.

For “The German nuclear exit,” the Bulletin asked leading experts to explore the phase-out and Energiewende along historical, political, economic, environmental, and legal dimensions and, in so doing, to give some assessment of the progress made (and likely to be made) toward a nuclear-free, renewables-heavy energy supply. What these authors report is not of course uniform or entirely positive, but they do seem to converge on a theme: In part because the nuclear phase-out and Energiewende are based on serious long-term planning and broad political consensus, the German energy experiment has met with promising early success.

In his overview article, “From Brokdorf to Fukushima: The long journey to nuclear phase-out,” Glaser, a Princeton researcher and member of the Bulletin’s Science and Security Board, sets the historical context for the shutdown, reviewing the massive, civil-war-like confrontations between anti-nuclear demonstrators and police that started in the 1970s, and notes that, “because of these and subsequent developments—including the 1986 Chernobyl accident—by the 1990s, no one in German political life seriously entertained the idea of new reactor construction.”

Freie Universität Berlin politics professor Miranda Schreurs’s essay, “The politics of phase-out,” offers a surprising explanation for continuing popular support for the phase-out across the German political spectrum: The shift to renewable energy sources that accompanies the phase-out has brought financial benefits to farmers, investors, and small- and medium-sized businesses.

Marshaling a wide range of observed data and predictive economic models, Felix Matthes, research coordinator at the Institute for Applied Ecology in Berlin, reaches another unexpected conclusion: The nuclear phase-out is likely to have only a small and temporary effect on electricity prices and the overall German economy.

The phase-out also seems unlikely to come with a huge legal bill. As University of Kassel legal experts Alexander Rossnagel and Anja Hentschel explain in “The legalities of a nuclear shutdown,” during early negotiations, the government shaped the phase-out so it gave utilities time to recoup their investments in nuclear power plants, thereby undercutting their ability to successfully sue later for damages.

And finally, Lutz Mez, co-founder of Freie Universität Berlin’s Environmental Policy Research Center, presents what may be the most startling finding of all. The Energiewende that is being pursued in parallel with the German nuclear exit has reached a climate change milestone, Mez writes: “It has actually decoupled energy from economic growth, with the country’s energy supply and carbon-dioxide emissions dropping from 1990 to 2011, even as its gross domestic product rose by 36 percent.”

 “The German nuclear exit” is the first in a three-part Bulletin series that will also look at the implications of potential phase-outs of civilian nuclear power in France and the United States. The expert essays that make up this installment of the series are hardly one-sided; they are full of acknowledgements of the difficulties Germany faces as it ends its nuclear power era and strives to reach aggressive greenhouse gas-emissions targets. But the articles make clear that the nuclear phase-out and accompanying Energiewende are not—international media characterizations notwithstanding—capricious political reactions; in fact, they are carefully planned national initiatives that are based on a rational calculation that they will ultimately benefit Germany environmentally and financially.

Glaser may sum up the global import of the German energy experiment best when he writes: “Germany’s nuclear phase-out could provide a proof-of-concept, demonstrating the political and technical feasibility of abandoning a controversial high-risk technology. Germany’s nuclear phase-out, successful or not, is likely to become a game changer for nuclear energy worldwide.”

The German nuclear exit: From Brokdorf to Fukushima (Part 2)

From Brokdorf to Fukushima: The long journey to nuclear phase-out

By Alexander Glaser

Abstract

Shortly after the accident at the Fukushima Daiichi Nuclear Power Station, Germany’s government started preparing legislation that would close the country’s last nuclear power plant by 2022. But this wasn’t an entirely new development: Germany had been planning to leave nuclear energy behind for decades, and to understand its nuclear phase-out requires a close look at the past. Several projects and events mark the beginnings of the German anti-nuclear power movement: Among them are the huge protests over the Brokdorf reactor, which began in 1976 and led to civil war-like confrontations with police, and the controversy over the Kalkar fast-neutron reactor in the mid-1970s. Because of these and subsequent developments—including the 1986 Chernobyl accident—by the 1990s, no one in German political life seriously entertained the idea of new reactor construction. This tacit policy consensus led to energy forecasts and scenarios that focused on energy efficiency, demand reduction, and renewable energy sources. By the time of the Fukushima accidents, many of these new energy priorities had already begun to be implemented and to show effect. Replacing nuclear power in Germany with other energy sources on an accelerated schedule is likely to come with a price tag, but, at the same time, Germany’s nuclear phase-out could provide a proof-of-concept, demonstrating the political and technical feasibility of abandoning a controversial high-risk technology. Germany’s nuclear phase-out, successful or not, may well become a game changer for nuclear energy worldwide.

Within days of the Fukushima nuclear accidents in March 2011, it became clear that Germany’s response to the disaster would be determined and drastic; the nation’s eight oldest reactors were taken offline immediately,1 and the government began to prepare new legislation that would ultimately mandate closing the last nuclear power plant by 2022. Public support for the phase-out reached almost 90 percent. Outside Germany, however, the decision to phase out nuclear power on this accelerated schedule—or on any schedule for that matter—has often been depicted as reckless and irresponsible.2 At a time when climate change has risen to the top of the political and public debate, how could a country that committed itself to nuclear power early on—building a large fleet of power reactors that provided 20 percent of the country’s electricity demand—dare to walk away from one of its low-carbon energy sources?

Indeed, replacing nuclear power with other energy sources will require the phase-in of renewable energy sources at a faster rate than previously anticipated, and the accelerated transition is likely to come with a price tag. At the same time, however, Germany’s nuclear phase-out could provide a proof-of-concept, demonstrating the political and technical feasibility of abandoning a controversial high-risk technology and therefore creating a blueprint for others to follow. Germany’s phase-out, successful or not, may well become a game changer for nuclear energy worldwide.

The idea of a nuclear phase-out did not come out of the blue, and to understand it requires a careful review of the past. The trajectory of Germany’s nuclear program is closely related to its post-war history and developments in West German society. The controversy over nuclear power has its origins in the late 1960s and early 1970s, but most important, there has been a continuity of debate over nuclear power from that time to the present, transformed over several decades by domestic developments and re-energized (and, in many ways, justified) by the accidents at Three-Mile Island, Chernobyl, and finally Fukushima. When the critical stages and events of the debate are viewed in perspective, the logic—and perhaps even the inevitability—of the German phase-out decision becomes apparent. Germany has been planning to leave nuclear energy behind for decades.

The origins of German nuclear skepticism

As in many other industrialized countries, support for atomic energy in West Germany was originally considered a progressive position.3 In the early years of the Atoms for Peace program, nuclear power held the promise of modernity and a solution to mankind’s energy problems. At the time, it was the utilities that perceived this early interest in nuclear power as unwarranted atomic hysteria and were generally reluctant to adopt a new and unproven technology that came with many economic and technical uncertainties. To overcome this resistance, the German government established major research centers at Karlsruhe and Jülich in the mid-1950s,4 and they would both become important hubs of European nuclear research and development. Work at these centers focused not only on reprocessing and enrichment—pursuits usually noted warily by Germany’s neighbors5—but also on the development of a variety of novel reactor concepts, often advocated as alternatives to dependency on US technology and fuel supply.6

In the early 1970s, however, the enthusiasm for the technology began to wane, and by 1980, the historian Joachim Radkau was led to title his definitive account of nuclear power development in Germany The Rise and Fall of the German Atomic Industry, 1945–1975: Displaced Alternatives in Nuclear Technology and the Origin of the Nuclear Controversy. 7 Numerous examples illustrate the early crisis that put nuclear power technology on a downward path from which it would never recover. In hindsight, however, a few particularly important projects played critical roles in the public debate; taken together, they help explain Germany’s phase-out decision decades later.

The Brokdorf reactor

If one event had to be singled out to mark the origins of a movement opposed to nuclear power that went beyond local interests, it would probably be the Brokdorf protests, which ultimately led to numerous civil-war-like confrontations between police forces and opponents of the project (Aust, 1981).8

The planning for a light-water reactor at the Brokdorf site, 45 miles northwest of Hamburg, had been underway since the late 1960s, but became a public issue only in November 1973, at a time when several power reactors were already operating in Germany. The Brokdorf controversy had a lesser-known prelude at another proposed reactor site near the town of Wyhl, where the peaceful occupation of the construction site by local community groups (including clerics and winemakers who worried that the steam from cooling towers could negatively affect wine production in the region) led to a construction stop and ultimately the cancellation of the project (Radkau, 1983: 452). After this accidental success of an essentially local-issue movement, the German federal government decided to set a precedent and avoid a second Wyhl at all costs. In October 1976, within hours of receiving the construction permit, police secured the Brokdorf site with barbed wire while construction workers were moving in equipment. That night, police forces clashed with opponents who were trying to occupy the site, just as in Wyhl three years earlier. only this time, violence rapidly escalated, attracting significant national media attention.9

Four weeks later, more than 30,000 people gathered to demonstrate against the Brokdorf project. These protests led to a construction stop in October 1977, which was formally justified by the lack of a disposal strategy for spent fuel. Brokdorf had become a powerful symbol of the German anti-nuclear movement, and, when construction was about to resume in February 1981, about 100,000 demonstrated against the project, confronting a police contingent of more than 10,000—at the time, the largest police operation in the history of West Germany. More confrontations and political tugs of war followed, but the Brokdorf reactor eventually came online in October 1986; ironically, it would be among the first new grid connections worldwide after the Chernobyl accident.

What is remarkable about these early events is that the opposition to the Brokdorf and the Wyhl projects did not explicitly target nuclear power per se, or even focus on particular issues of nuclear power, such as reactor safety or waste disposal (Radkau, 1983: 458). Instead, the early opposition movement largely developed in response to the nontransparent and authoritarian style in which the federal government pursued its big-industry projects, exemplified by excessive use of police force. only later would this non-specific focus of the anti-nuclear movement be complemented by a technical critique targeting specific issues of nuclear power. This transition begins most clearly with the debate over the fast breeder reactor at Kalkar.10

Police stand guard outside the Brokdorf Nuclear Power Plant in 1981.

Photo credit: Günter Zint/panfoto.de

The Kalkar fast-neutron reactor

Between 1957 and 1991, West Germany pursued an ambitious—and ultimately unsuccessful—fast breeder reactor project. After an initial research and development phase, the project envisioned the construction of a 300-megawatt electric prototype reactor, the SNR-300, which would be followed by a full-scale demonstration reactor (Keck, 1981; Marth, 1994). Construction of the SNR-300 near the city of Kalkar in North Rhine-Westphalia began in April 1973. In the wake of Wyhl and Brokdorf, protests against the Kalkar reactor began to escalate in the mid-1970s. A large demonstration in September 1977 involved a massive police operation that included the complete closure of autobahns in northern Germany and identity checks of almost 150,000 people.11

But along the way, a new dimension emerged. In the course of a court case first initiated by a local farmer against the Kalkar reactor in 1972, independent experts began to testify on issues related to proliferation and security risks of separated plutonium and, more important, the unique safety risks of fast breeder reactors. one particular scenario, the hypothetical Bethe-Tait accident—in which, after a loss of coolant, the core of a fast breeder reactor collapses and leads to a small-scale nuclear explosion (Bethe and Tait, 1956)—later became fateful for the Kalkar project.

Top: The autobahn is closed for identity checks because of protests of the Kalkar fast-breeder reactor in September 1977. Bottom: Police await protests near Kalkar in North Rhine-Westphalia.

Photo credit: Günter Zint/panfoto.de

During hearings that started in 1978, a group of independent experts, originally based at the University of Bremen, pointed to the possibility of a Bethe-Tait accident and supported their analysis with estimates of the energy release associated with it. In response, the Kalkar project leaders tried to argue that such an accident could be contained, which ultimately proved difficult to demonstrate, given that the reactor had not been designed with this particular type of accident in mind. Moreover, by the time of the hearings in the late 1970s, major concrete and steel structures were already in place and impossible to modify or replace. The decision to proceed with the project was reached in 1982,12 but for the first time, outside technical experts made critical contributions to a safety evaluation as part of the licensing process of a nuclear reactor in Germany. In hindsight, the Kalkar case helped establish independent nuclear expertise that would later be called upon in many other circumstances,13 and some of the experts who began their work as outsiders in the 1970s and 1980s would eventually become members of the Federal Reactor Safety Commission (RSK), the Radiation Protection Commission (SSK), and the Society for Reactor Safety (GRS)—all involved in regulating nuclear power in Germany.

Construction of the Kalkar reactor was complete in mid-1985, but a newly elected state government was clearly opposed to the project, and the Chernobyl accident in April 1986 made it effectively impossible to let such a controversial initiative go forward. In March 1991, the German federal government announced that the facility would not be put into operation.14 By that time, the costs of the project had escalated from an original estimate of $150 to $200 million to about $4 billion. The site now hosts an amusement park.15

Two additional projects of that era stand out: the proposed Wackersdorf reprocessing and mixed-oxide fabrication plant and the Gorleben final repository. These projects are notable because they mark the shift of attention to fuel-cycle facilities and the back-end of the fuel cycle. The Wackersdorf reprocessing plant was eventually canceled in the spring of 1989. It was clear to everyone that breeder reactors would not play a relevant role in the foreseeable future, and the main customer of the plant signed an agreement with the French industrial group Cogema to reprocess spent fuel in La Hague, France, instead. About $5 billion had been spent on the project since its beginnings in 1980. Cancellation of the Wackersdorf plant, however, put further emphasis on the final repository site near Gorleben, which had been selected in 1977 and was located in the eastern-most corner of West Germany.16 The project played a particularly significant role because it remained a focal point of the anti-nuclear movement throughout the 1990s; it also is the only controversial nuclear project in Germany that is still relevant today—its ultimate fate and role are still open.

Chernobyl: The idea of a phase-out goes mainstream

By the time of the 1986 Chernobyl accidents, the skepticism about the future of nuclear power in Germany was already widespread; the Green Party had been in the Bundestag since 1983, and the nuclear phase-out was a key element of its political agenda. In March 1986, four weeks before the Chernobyl accidents, more than 100,000 people protested against the Wackersdorf reprocessing plant. Even if the Chernobyl accident further intensified the debate, it was not the turning point it perhaps was in other western European countries. In the aftermath of the 1986 Chernobyl accident, however, the notion of a nuclear phase-out became mainstream in the public and political debate. Most important, the Social Democratic Party (SPD), then the major opposition party, formulated a new and critical position toward nuclear power.17 The idea of a nuclear phase-out and a ban on reprocessing were first articulated in a new SPD policy statement in late 1989, shortly after the fall of the Berlin Wall: “We want to achieve a secure and environment-friendly energy supply without nuclear power as soon as possible. We consider the plutonium economy a mistake.”18

The conservative federal government remained in power until 1998 and, in principle, government support of nuclear power was still a given. Several important pre-Chernobyl projects, however, began to fall apart. The notion of building new nuclear reactors in Germany became completely unrealistic. Given that the climate change debate was still in its infancy and the economics of nuclear power unattractive, new nuclear construction was essentially a non-issue.

Surprisingly, in the 1990s the critical attitude toward nuclear power in Germany did not dissipate, even though few nuclear issues were relevant in this period—except for one. In April 1995, the first shipments of nuclear waste to the interim storage facility at the Gorleben site began. They included spent fuel from various German reactor sites and high-level waste from reprocessing facilities in France. These shipments provided a focus—arguably, the only one available—for public political debate on the future of nuclear power in Germany. The anti-nuclear movement was able to concentrate its energy on these so-called Castor transports,19 using them to transform otherwise innocuous operations into mega-events that would dominate national media coverage for several days at a time.

The first transport in April 1995 included a total of just two casks but mobilized 4,000 protesters and 7,600 police; the second transport in May 1996 included a single cask coming from the La Hague reprocessing plant and required a police force of 19,000. The third transport in March 1997 included a total of six casks, and it faced 10,000 protesters and 30,000 police.20 As their forerunners from the 1970s and 1980s, these events turned extremely violent. The government’s handling of these protests was often perceived as disproportionate and, in the unified Germany of the 1990s, increasingly anachronistic, even in the eyes of the broader public. In hindsight, the Castor-transport controversy would build a bridge between the early debate over nuclear power, when new facilities were actually planned or built, and a forthcoming change in the federal government.

The nuclear phase-out

When the Social Democratic Party won the 1998 elections, forming a government with the Green Party, one of the much-anticipated key provisions in the coalition agreement was the nuclear phase-out. It took two years to reach an agreement between the government and the utilities, and new legislation entered into force only in April 2002. The law prohibited the construction of new commercial nuclear power plants in Germany, limited electricity production from plants already in operation, prohibited sending spent fuel for reprocessing after mid-2005, and required the construction of dry-cask storage facilities at reactor sites. Among these provisions, the end of reprocessing and the on-site dry-cask storage have been implemented on schedule and without much controversy, which is in and of itself a remarkable accomplishment. Beyond that, the major opposition parties (and future Chancellor Angela Merkel) formally maintained their disapproval of the nuclear phase-out.

Police protect a Castor transport in 1997.

Photo credit: Günter Zint/panfoto.de

In the 1990s, however, a new and more subtle process gradually took hold: No one, including the parties opposed to a phase-out, seriously entertained the idea of new reactor construction in Germany, in spite of growing concerns about climate change. Based on the lessons learned in the 1970s and 1980s, such a proposal would have been impossible to defend, and so, a de facto policy consensus in favor of a decreasing role for nuclear power in Germany emerged. This general perspective has determined the scope of every significant energy outlook for Germany published since the late 1990s (Glaser, 2011).21 Assessments produced over the years may have disagreed on the best strategies to meet certain climate targets, but they all worked from the fundamental starting point that—sooner or later— nuclear power would no longer be available in Germany. For this reason, even when Angela Merkel became chancellor in November 2005, government policy toward nuclear power did not fundamentally change.

In the first years in coalition with the Social Democratic Party, Merkel and her Christian Democratic Union avoided the issue of the phase-out.22 After 2009, a new Conservative–Liberal coalition under Merkel was in principle able to reverse the phase-out—which was, after all, the flagship accomplishment of a political opponent—but this did not happen immediately. In fact, it took Merkel’s majority a year to decide what to do, exactly. It is worth noting that, at the time, public opposition to nuclear power in Germany remained surprisingly strong. In April 2010, about 120,000 demonstrators formed a 75-mile-long human chain between two reactor sites to commemorate the 1986 Chernobyl accident and to protest the widely anticipated federal government plans to extend the operational life of the remaining nuclear power plants.

Based on a number of options proposed in a government-commissioned report in late 2010 (Federal Ministry of Economics and Technology, 2010), the Merkel government opted for an average life extension of 12 years for nuclear power plants, now framing nuclear energy as a “bridge technology” that would be necessary until renewables fully penetrated the electricity market. Most important, however—and it is hard to overemphasize the significance of this fact—the revised law of 2010 did not fundamentally challenge the core of the atomic energy law of 2002. The previous government had changed the purpose of the law from promoting the development and deployment of nuclear power for peaceful purposes to a qualitatively different aim: the structured termination of its use. This remained the basis for Germany’s atomic energy law, even after the 2010 revision.23

Fukushima and the road ahead

For Germany, the Fukushima accidents happened at an awkward political moment. The government had just negotiated a fragile compromise that extended the lives of the existing plants while retaining the fundamental idea of the phase-out, including the prohibition of new construction. It was a compromise that reactor operators were happy to accept, while it avoided a public uproar. In the German political calculus, Fukushima made that compromise instantly obsolete.

Perhaps the most remarkable impact of the accidents on Germany’s energy future is that they consolidated the broadest conceivable consensus for the phase-out in the public, a consensus that reached across the entire political spectrum,24 and even to many parts of the industry.25 The future of nuclear power in Germany is no longer a contested issue, while the energy debate has moved on to other questions. Foreign commentators sometimes suggest that Germany will rethink its decision for this accelerated phase-out once the dust of Fukushima has settled. This view overlooks the long and complex history of nuclear power development in Germany, which has been dominated by confrontation and failure. The decision to abandon nuclear power is inconvenient and—in the medium term—costly, leaving tens of billions of euros worth of assets stranded, and it has by no means been taken lightheartedly.

Time will tell whether what some have called Germany’s “great energy experiment” (Talbot, 2012) will be considered a success.26 For those who find Germany’s model appealing, the lessons to be learned are complex, and they are not easily transferred to other countries.

In Japan, where Fukushima shattered the decades-long political consensus in favor of nuclear energy, officials may well look to the German example. For the first time, there is now considerable public support for a phase-out policy, and leading politicians and political parties are scrambling to respond. In September 2012, the Japanese government agreed to consider plans to phase out its nuclear program on the basis of a cap on existing reactor lifetimes and prohibition of new reactor construction. The German experience suggests, however, that Japan may struggle to reach this goal within the next 20 years from a standing start. As a result of Germany’s original decision in 1998 to phase out nuclear power, energy planners produced a barrage of energy forecasts and scenarios with a strong focus on energy efficiency and demand reduction. By the time the Fukushima accidents occurred, many of these new energy priorities had already begun to show their effects. Germany also had alternative energy scenarios available, already understood nuclear power as a technology that would have a decreasing role in the country’s energy portfolio, and considered a clear direction for energy policy more important than a particular phase-out schedule. This is perhaps the most important lesson to be learned from the German experience: Countries ought to develop energy alternatives early on, so they can respond flexibly when new opportunities and challenges arise.

Funding

This research received no specific grant from any funding agency in the public, commercial, or not-for-profit sectors.

Acknowledgements

This article is part of a three-part series on the implications of phasing out civilian nuclear power in Germany, France, and the United States. Additional editorial services for this series were made possible by grants to the Bulletin of the Atomic Scientists from Rockefeller Financial Services and the Civil Society Institute.

Article Notes

1 one of the reactors was temporarily shut down at the time of the accident.

2 This is especially true for perspectives from international commentators. See, for example: “Germany—Insane Or Just Plain Stupid?” at www.forbes.com/sites/jamesconca/2012/08/31/germany-insane-or-just-plain-stupid; “Germany’s Panicky Reaction to the Japanese Earthquake is Dangerously Irresponsible,” at blogs.telegraph.co.uk/news/davidhughes/100079891/germanys-panicky-reaction-to-the-japanese-earthquake-is-dangerously-irresponsible; or “Shunning Nuclear Power Will Lead to a Warmer World,” at e360.yale.edu/ feature/shunning_new_nuclear_power_ plants_ will_lead_to_warmer_world/2510/.

3 For the period until 1990, the following discussion focuses on West Germany.

4 Kernforschungszentrum Karlsruhe (KfK) and Kernforschungsanlage (KFA). Both institutes have different names today.

5 It is worth noting that, in the mid-1950s, Chancellor Konrad Adenauer and Defense Minister Franz Josef Strauss openly considered the acquisition of tactical nuclear weapons for the German Bundeswehr. To what extent such an independent effort would have been linked to Germany’s fissile material production capabilities acquired for its nuclear power program (e.g., at the Karlsruhe and Jülich research centers) remains uncertain and contested. For a discussion, see Radkau, 1983: 185–195, and Kraus, 2007: 37–41.

6 At the time, there was a debate over whether to adopt US light-water reactor technology, which requires enriched fuel and implied a dependency on foreign fuel supply, or to pursue the natural-uranium path combined with an early transition to breeder technology. Research and development also included, for example, the pebble-bed high-temperature reactor and an organically moderated reactor.

7 The 1983 version of this book, even though it has 580 pages and more than 3,200 endnotes, is a shortened and updated version of Radkau’s 1981 habilitation treatise, submitted to the department of history and philosophy at the University of Bielefeld. Radkau identifies two distinct periods of nuclear power development in Germany. The first “speculative” period lasted until the mid-1960s and was characterized by a focus on the future and the many possibilities of nuclear power; it was quickly followed by a second period, however, in which interest shifted to the present. The first reactors were under construction, technology choices were largely locked-in, and advances in science and technology already were meaningless. According to Radkau, the early loss of focus on the future made nuclear power vulnerable to public and political opposition.

8 For a short chronology, see www.ndr.de/geschichte/brokdorfchronik2.html.

9 See, for example, the 30-minute television feature Brokdorf —Ein zweites Wyhl?, directed by K. Biehl and E. Hollweg, Norddeutscher Rundfunk, 1976; excerpt at vimeo.com/38842591. For additional historic video footage, see vimeo.com/38842883.

10 In response to the US WASH-1400 reactor safety study from 1975 and the 1979 Three Mile Island accident, there is a parallel effort of this emerging community of critical experts to focus on light-water reactor safety.

11 It has to be emphasized that the largest demonstration against the Kalkar reactor took place in what became known as the “German Autumn,” during which a prominent industry official was kidnapped and later murdered by the Red Army Faction, and a Lufthansa plane was hijacked and diverted to Somalia. The period can be considered one of the tensest times in Germany’s post-World War II history.

12 For a perspective on these events by the project leaders, see Marth, 1994.

13 In parallel to the Kalkar hearings, the so-called “Phase B” of the German Risk Study on Nuclear Reactors (DRS), which had been originally commissioned by the federal government as a counterpart to the US WASH-1400 report, also offered the opportunity for contributions by independent nuclear experts.

14 Note that the post-1990 situation in Germany was dominated by the reunification of East and West Germany and the related costs of such an endeavor.

15 For the park’s website, see www.wunderlandkalkar.eu.

16 The location of the repository near the border with the former East Germany was not primarily selected on technical grounds; little if any local opposition was expected in this remote area of West Germany. Until 2007, the government estimated the costs of the project to about $2 billion (1.5 billion euros).

17 The Green Party, of course, had (and still has) an even more critical position toward nuclear power than most other parties along the political spectrum.

18 For the full text of the policy statement, see www.spd.de/linkableblob/1812/data/berliner_programm.pdf.

19 Castor is a contrived acronym for “cask for storage and transport of radioactive material.” In parallel, Germany also developed a “Pollux” cask for final disposal of spent fuel in a geologic repository.

20 The costs for the March 1997 Castor transport have been estimated to total more than $50 million (mainly for security personnel), excluding costs of the damages that occurred during the transport. Further transports to the Gorleben site resumed more than four years later.

21 This is discussed in more detail in Glaser, 2011: 27–35.

22 This is explicitly articulated in the May 2009 coalition agreement; see www.cducsu.de/upload/koavertrag0509.pdf (in German).

23 For the full text of the law, see www.gesetze-im-internet.de/atg/index.html.

24 All six parties that currently have the potential to have representatives in the Bundestag (CDU, FDP, SPD, the Green Party, the Left Party, and the Pirate Party) support a phase-out of nuclear power.

25 For example, the German Association of Energy and Water Industries (www.bdew.de), which represents 1,800 companies, including the major utilities, released a statement in early April 2011 advocating a “fast and complete phase-out” of nuclear power by 2020.

26 Predictably, electricity imports from neighboring countries increased in the aftermath of Fukushima, but the typical annual pattern of electricity imports and exports had been re-established by September 2011. Even in 2011, Germany remained a net exporter of electricity, and in spite of the immediate post-Fukushima shutdowns, Germany’s greenhouse gas emissions did not increase that year. It is now likely to meet its Kyoto budget, which mandates a 21 percent average reduction (relative to 1990) of carbon-dioxide equivalent emissions for the years 2008 through 2012.

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Author biography

Alexander Glaser is a member of the Bulletin’s Science and Security Board, and assistant professor at the Woodrow Wilson School of Public and International Affairs and in the Department of Mechanical and Aerospace Engineering at Princeton University. He directs Princeton’s Nuclear Futures Laboratory and serves as co-editor of the journal Science & Global Security. Glaser is also a member of the International Panel on Fissile Materials.

The German nuclear exit: The politics of phase-out (Part 3)

The politics of phase-out

By Miranda A. Schreurs

Abstract

The German decision to phase out nuclear energy following the Fukushima crisis builds on earlier political decisions to support the growth of renewable electricity, to improve energy efficiency, and to turn Germany toward sustainable energy and away from nuclear power. Germany is now embarking on what is known as the Energiewende, a plan to turn the entire economy to a low-carbon energy structure that does not make use of nuclear energy. The last nuclear power plants are scheduled to be shut down in 2022. Although there are still many skeptics of the phase-out plan, it has support across the political spectrum; Chancellor Angela Merkel of the Christian Democratic Union sees this as one of her top priorities, as do the opposition Greens and Social Democratic Party. In part, this support stems from the financial benefits that the shift to renewables has brought to many small- and medium-sized German businesses. The expansion of renewable energy capacity has been dramatic and now accounts for one-quarter of electricity production, up from about 3 percent in 1990.

The explosions and meltdowns at the Fukushima Daiichi Nuclear Power Station on March 11, 2011 occurred almost exactly 25 years after the Chernobyl nuclear accident. The Fukushima disaster also came less than five months after the conservative ruling-coalition government in Germany fulfilled an earlier campaign promise, pushing through a controversial amendment to the Atomic Energy Law and putting the brakes on a nuclear phase-out passed into law in 2001 by a liberal coalition.

The conservative coalition gave the nuclear operators hope that they might have a future after all when it passed the amendment, commonly referred to as “the phase-out of the phase-out” (Ausstieg aus dem Ausstieg), which allowed the country’s nuclear plants to run an additional eight to 14 years, depending on their age. Almost instantly, Fukushima crushed those hopes.

In Japan, the fate of the country’s 50 still-functional nuclear reactors remains uncertain, as the government and industry, which seek a continuation of nuclear energy, confront a population that would like a rapid shutdown of the nuclear fleet. In contrast, in Germany the decision to phase out the nuclear sector happened within a few short months—and some would argue within days—of the Fukushima reactor meltdowns. Not only did the conservative coalition backtrack on its reactor-life-extension legislation, it pushed through a new nuclear shutdown plan that went beyond what the Social Democratic Party and Green Party had proposed a decade earlier. Eight nuclear power plants were closed immediately, leaving just nine to be shut down over the course of the next decade.

Why is it that Germany, more than 700 miles from Chernobyl and some 6,000 miles from Fukushima, reacted so strongly against nuclear energy? In large part, the decisive, post-Fukushima shift away from nuclear energy was the result of long-term trends in German politics that led the country away from nuclear energy and toward greater support of renewable energy sources.

Fukushima and European nuclear energy politics

Antipathy to nuclear energy has a long history in Europe. In a 1978 referendum, Austrians voted against nuclear power, and as a result, the fully constructed Zwetendorf Nuclear Power Plant was never put into operation. Denmark’s parliament decided against nuclear energy production in 1985. Greece long ago rejected nuclear energy; a Greek finance minister explained in a 2007 interview that the decision was based on the country’s relatively small size and its seismic instability (Lekakis, 2007).

Although the governments of the Czech Republic, France, the Netherlands, Poland, and the United Kingdom pledged continued support for their nuclear programs after the Fukushima accident, others are now following the path of the early nuclear naysayers. After Fukushima, Switzerland—which has five nuclear reactors that generate about 40 percent of the country’s electricity—announced that it will phase out nuclear energy by 2034. In Italy, the Berlusconi government put its plans to restart a nuclear energy program to the ballot; in a binding referendum held in June 2011, the government’s plan was rejected by 94 percent of voters. The Belgian government has announced its intention to reduce dependence on nuclear energy and aims for a phase-out by 2025 if means are found to replace the 50 percent of electricity that is currently generated from nuclear power. Even in France, which produces about 75 percent of its electricity in nuclear plants, President François Hollande has made clear his opposition to his predecessor’s plans to expand the country’s dependence on nuclear energy and has talked about reducing the level to about 50 percent.

In Europe, Fukushima did not end reliance on nuclear power. But the accident did largely dash hopes of a broad nuclear renaissance, and in Germany, Fukushima tipped a precarious political balance definitively— and, it seems, permanently—against nuclear power and toward renewable energy sources.

Prelude to the first phase-out

The German decision to abandon nuclear energy is especially significant because of the country’s economic size (it accounts for about one-fifth of the European Union’s gross domestic product) and its industrial structure. Germany is a major producer and exporter of machinery, automobiles, and chemicals. Stability in the electricity supply is critical.

At the same time, Germany has some of the world’s most ambitious greenhouse gas emission-reduction targets: a 40 percent reduction in carbon dioxide emissions from 1990 levels by 2020 and an 80 percent minimum reduction by 2050. Nuclear energy accounted for about 23 percent of electricity production at the time of Fukushima. The decision to phase out nuclear energy, therefore, means not only replacing an important source of electricity, but also doing so in a way that does not lead to increased greenhouse gas emissions.

Many factors have influenced the German decision to exit the nuclear energy industry. In few countries are anti-nuclear sentiments as strong as in Germany. These sentiments have built up over decades. They are tied in part to the country’s unique history as a land divided by the Cold War, and in part to concerns that war between the Soviet Union and the United States would make Germany, literally, ground zero for nuclear weapons used by both sides.

Also, Germany has a vibrant civil society that formed in reaction to the country’s wartime past, to its patriarchal and elitist decision-making structures, and to its widespread environmental problems. Despite their many ideological differences, the peace, anti-nuclear, and women’s movements that formed in the 1970s succeeded in shaking up German politics in important ways that included the formation of a Green Party. Early on, many of the largest and most powerful environmental groups took a stance opposing nuclear energy. Over the course of the next decades, they staged regular protest actions against nuclear energy facilities, the transport of spent fuel, and nuclear waste storage sites (Glaser, 2012; Rucht, 1990).

Germany has a mixed electoral system, in which half of the members of the lower house of parliament (the Bundestag) are elected through a first-past-the-post system (i.e., the candidate with the largest percentage of the vote wins) and half through a party list and proportional representation system (i.e., each party gets seats relative to the percentage of the vote it wins and fills the seats from a pre-determined list of candidates—a party list). This system made it possible for Green Party candidates to be elected through the party list without needing to win majorities in specific races.

In 1983, the Green Party was, for the first time, voted into the federal parliament with just over 5 percent of the vote. The Greens brought their staunchly anti-nuclear position into parliamentary debates and pressured the two major parties—the conservative Christian Democratic Union and the liberal Social Democratic Party—to pay greater attention to environmental concerns.

Still, on their own, it is doubtful that the Greens could have tipped the scales against the nuclear industry. Highly important to the changing political context was the Social Democratic Party’s decision to reject nuclear energy after the Chernobyl nuclear accident. This shift constitutes a major political difference between Germany and France, which also has an anti-nuclear Green Party, but where the Socialist Party has remained committed to nuclear energy. The Social Democratic Party in Germany had long been divided on the nuclear question; the Social Democrats’ change in position made for a viable anti-nuclear coalition that simply needed a window of opportunity to push through its anti-nuclear agenda.

The window opened after the 1998 federal election. Combined, the Social Democratic Party and Green Party did well enough in the election to form a coalition government. The coalition made a nuclear energy phase-out one of its highest priorities and succeeded in passing a nuclear phase-out law—over considerable opposition from the Christian Democrats, the Free Democratic Party, and the energy utilities—in 2001 (Mez and Piening, 2002).

Even with strong public sentiment against nuclear energy and electoral success by parties on the left, a decision to phase out nuclear energy would have been difficult had it not been for the growth of the German renewable energy industry. By 2000, the wind energy sector in Germany had reached revenues of 1.7 billion euros and employed 25,000 people, directly or indirectly (ECOTEC, 2010).1 Entrepreneurs are critical to the promotion of new technological ideas, and many small industries began to pursue alternative energy alongside the large energy companies’ renewable energy departments.

Key political figures from across the political spectrum were also critical in supporting renewables legislation. These include former environment ministers Klaus Töpfer (Christian Democrats), Jürgin Trittin (Greens), and Sigmar Gabriel (Social Democrats) and parliamentarians like Hermann Scheer and Hans Josef Fell of the Greens, but also Josef Göppel from the Christian Socialist Union (Geldinfirmation, 2011). In contrast with many other countries, where there is a strong divide on whether support for renewable energy makes economic sense, in Germany there is relatively wide agreement that it is critical to the country’s future.

Policy instruments for renewable energy

Helmut Kohl, a Christian Democrat, was the chancellor of Germany during the Chernobyl meltdown in 1986. He reacted to the crisis by establishing a Ministry for the Environment, Nature Conservation and Nuclear Safety. Shortly after its founding, this ministry was given responsibility for renewable energy regulation and has been an ardent supporter within the government of renewable energy and energy efficiency ever since.

Under the leadership of Environment Minister Klaus Töpfer, the government introduced a new regulatory framework for the promotion of renewable energy. The 1990 renewable electricity feed-in law, one of the first of its kind in the world, required grid operators to purchase renewable electricity from third-party generators at 65 to 90 percent of the retail price. The conventional energy utilities did not strongly oppose the law, probably in part because of Chernobyl, but also because renewable energy was at the time viewed as a niche source that was not a threat to other forms of energy. Passed with a strong majority, the renewable feed-in law provided the room necessary for the renewable energy industry to experiment, gain experience, and prove itself a viable source of power.

The real takeoff for renewables, however, came with the passage of the Renewable Energy Law of 2000, which replaced the feed-in law. The main innovation of this legislation was its guarantee of feed-in prices for 15- to 20-year time horizons for renewable energy. The law has been modified numerous times to adjust the level of the feed-in tariff, rebalancing it as conditions changed with time. The most recent rebalancing occurred in the summer of 2012, when the support level was reduced for photovoltaic sources. New initiatives to support offshore wind are also being pursued. The changes in the feed-in tariffs and related laws reflect reductions in the costs of the technologies as well as new expectations regarding the amounts of electricity various renewables will likely provide.2

Opposition to the first nuclear phase-out

Although support for renewable energy as a contributor to the energy mix has extended across the German political spectrum for several decades now, the idea that renewables could be the mainstay of the electricity sector—let alone the entire energy sector—has been a more controversial political idea. In the pre-Fukushima period, powerful elements of the Christian Democratic Union (although not all within the party), their Bavarian sister party, the Christian Socialist Union, and the Free Democratic Party continued to view nuclear energy favorably, or at least as a necessary bridging technology.

It was these parties’ view that the Chernobyl nuclear accident occurred because nuclear safety, technology, and transparency standards in the Soviet Union were inadequate. They argued that German nuclear power plants did not use Soviet-style technologies and that German safety standards would prevent a Chernobyl-type accident.

Of course, there were Soviet-style reactors in the former East Germany, one of which had come close to a core meltdown in the mid-1970s—information that was not known in the West until the Berlin Wall fell in 1989. Soon after German unification, these reactors, which did not meet West German safety standards, were shut down and decommissioning began. The discussion about the future of nuclear thus revolved around the nuclear power plants in the West.

The conservative political parties and the four main utility companies in Germany—E.ON RWE, Vatenfall, and enBW—saw nuclear energy as important to the German energy mix and the provision of a stable electricity supply. They also argued that nuclear energy was cheaper than other electricity forms and that an early shutdown of the nuclear power plants would put German industry at a competitive disadvantage. When the first phase-out law was being negotiated in 2000 and 2001, the industry did succeed in hard-fought negotiations with the Social Democratic and Green Party coalition to keep the nuclear power plants operating for what is equivalent to about a 32-year lifetime. Although it was less than the 35 years the industry wanted, the utilities managed to push through a combined cap of 2,623 billion kilowatt hours on lifetime production for the country’s 19 nuclear power plants, meaning that the industry would have some flexibility in regard to the actual shutdown date (World Nuclear Association, 2012). By running power plants at less than full capacity, operators could, for example, stretch out the final end date of the phase-out. The legislation went into effect in 2002.

Even so, the conservative parties and the utility industry remained opposed to the phase-out, arguing that nuclear power was critical for meeting climate change targets. Under an agreement made among European Union member states as to how Europe would meet its target to reduce its greenhouse gases under the Kyoto Protocol, Germany agreed to reduce its carbon dioxide emissions to 21 percent below 1990 levels by 2012. Nuclear energy was portrayed as an important bridging technology, producing electricity without greenhouse gas emissions as renewable energy technologies were developed.

In 2005, a grand coalition between the Christian Democratic Union and the Social Democratic Party formed. Due to the Social Democrats’ continued influence, the nuclear phase-out agreement held, despite the displeasure of the major utility companies and some energy-intensive industries. To placate heavy industries, including aluminum and steel producers, the government exempted them from having to pay the added cost of renewable energy. These costs fall on households and small businesses.

Phase-out of the phase-out

The 2009 federal elections gave the conservative parties—the Christian Democrats and the Free Democrats—their chance to slow (and possibly eventually reverse) the nuclear phase-out decision. As part of their 124-page coalition agreement (Hengst et al., 2009), they pushed an amendment to the Atomic Energy Law through the Bundestag, the lower house of the parliament, using a political maneuver that, they declared, allowed them to circumvent a vote in the Bundesrat, the upper house, where the Länder, or state governments, are represented and the opposition had the majority. The maneuver was criticized as anti-democratic, but with the signature of German President Christian Wulff, the extension became law, despite threats to challenge the constitutionality of the decision-making process (Frankfurter Allgemeine Zeitung, 2010; Lang and Mutschler, 2010a, 2010b).

The phase-out of the phase-out was unpopular among many in the German public. An opinion survey conducted by the newspaper DieZeit in July 2010 found 49 percent of the population against any extension and another 29 percent supporting limits of an extension of nuclear plant lifetimes to a maximum of 10 years (Die Zeit, 2010). The decision to reverse the phase-out led to nationwide demonstrations. Beyond protesting the decision, however, opponents of the decision could do little, because, though opposition was strong, it was not overwhelming. Before the decision to extend the nuclear plants’ running times, the German press published articles that spoke of a growing acceptance of nuclear energy. The news journal Focus, for example, reported in April 2010 that a majority still found nuclear energy would be needed for some time and that 44 percent of respondents thought it should be used longer than planned.

Still, support for nuclear power varied significantly by party: 62 percent of Christian Democratic Union supporters and 60 percent of Free Democratic Party voters favored some extension of nuclear plant lifetimes, but only 35 percent of Social Democratic Party voters, 21 percent of Green sympathizers, and 33 percent of the small Left Party did so (Focus, 2010). But for Fukushima, Germany may have continued its nuclear energy well into the 2030s, at a minimum.

The triple disaster

The Fukushima triple disaster—the earthquake, tsunami, and nuclear meltdowns—shattered the hopes of the German nuclear industry. When a nuclear catastrophe happened in the former Soviet Union, it could be explained away as a result of poor technological standards. An accident of the magnitude of what happened in the Fukushima Daiichi Nuclear Power Station was simply not supposed to happen in a technologically advanced country like Japan.

In Germany, televised coverage of the unfolding crisis at the Fukushima Daiichi and Daini plants brought back memories of Chernobyl; the many problems that surfaced regarding crisis management and information disclosure were especially reminiscent of 1986. The Chernobyl nuclear accident had panicked the German population. Its radioactive plume spread out over northern and central Europe, depositing measurable radioactive contamination, especially in areas where it rained. In Germany, the media and nongovernmental organizations warned citizens against drinking milk, eating leafy vegetables and mushrooms, and letting their children play in the sand.

Twenty-five years later, as Germans watched on television, the Fukushima nuclear crisis led to an expanding evacuation zone and reports that drinking water as far away as Tokyo should not be mixed into baby formula. The Christian Democratic Union reacted quickly to the new reality the disaster had created, convincing its coalition partners of the need to shift policy direction.

On March 15, 2011, as the nuclear crisis was still unfolding in Japan, Chancellor Angela Merkel announced a three-month moratorium on the nuclear extension plan, a safety check of all nuclear power plants, and the shutdown of the seven oldest plants—those that went into operation before 1980—for the length of the moratorium. (An eighth nuclear plant was already shut down due to an earlier accident.) The temporary shutdown was to become permanent by the middle of the summer.

The Reactor Safety Commission was charged with advising the government on the technical and operational safety of Germany’s nuclear power plants in light of the new information from Fukushima. In addition, the chancellor established an Ethics Commission for a Safe Energy Supply, co-directed by former Environment Minister Klaus Töpfer and President of the German Research Foundation Matthias Kleiner. The Ethics Commission was given the mandate to produce a report on the ethical dimensions of energy use. Both committee reports were intended to guide the government on its policy decision about how to address nuclear energy in light of what happened in Japan.

The Reactor Safety Commission report was issued in the middle of May 2011 (Reactor Safety Commission, 2011). The commission concluded that safety standards at German nuclear facilities were high, but the seven oldest nuclear power plants had not been designed to withstand a jetliner crash. This failing was one of the justifications given for shutting down the oldest reactors.

At the end of May, the Ethics Commission presented its report, which argued that there are many ethical dilemmas associated with nuclear energy, including those related to the release of radioactivity in major accidents and the problems of nuclear waste storage. Moreover, the commission contended that there are alternative forms of low-carbon energy that are safer than nuclear energy, and it supported a shift to a renewable energy-dominated system (Ethikkommission für Sichere Energieversorgung, 2011).

In July 2011, the Bundestag voted overwhelmingly for legislation shutting down eight nuclear power plants and scheduling the shutdown of the remaining nine by 2022. one plant is to be shut down in each of the years 2015, 2017, and 2019, and the remaining six are to be taken off line in 2021 and 2022.

The challenges ahead

The Energiewende is the German name for the multi-decade energy transition on which the country has embarked. There has been a dramatic increase in renewable energy capacity in the past few years, and Germany now gets one-quarter of its electricity from renewables. At this pace of growth in the renewable sector, the country could conceivably overachieve and surpass its goal of a 35 percent renewable energy mix by 2020.

Still, there are longer-run obstacles. It is expected, for example, that offshore wind will need to play a major role in Germany’s renewable energy budget. Technical challenges and the high cost of the cables needed to bring the electricity to shore have put this part of the country’s renewable energy project behind schedule.

Another major challenge is the need to develop a new high-voltage grid infrastructure that can transfer electricity from the northern parts of Germany, where it is produced, to the country’s southern regions. This will require greater cooperation between the federal and state governments and new modes of public participation in decisions about the siting of power lines.

One of the most difficult aspects of the Energiewende—both in political and economic terms—is the question of who will pay for it. Germany uses a mechanism known as the merit order effect, giving renewable electricity priority access to the grid; when there is electricity from wind or solar power, it goes into the grid first. Renewable electricity producers benefit from feed-in tariffs. These provide 15 to 20 years of fixed prices for renewable energy that is generated and sold into the grid. Consumers bear the costs of these extra fees paid to renewable energy producers. When there was only a small amount of renewable energy in the German system, feed-in tariffs were not a big issue, but as the share of renewables has grown, so too has the cost to the German consumer.

In contrast, big industry is exempted from paying the added costs for renewables as it benefits from lower electricity prices than it would otherwise pay due to the increase of renewable energy in the market. Those lower prices are a result of the merit order effect, which gives first entry into the grid to energy sources with the lowest marginal costs (i.e., the cost of producing one additional unit of electricity). Because they have essentially no added marginal costs, solar and wind get first entry into the grid. As a result, the price of electricity at peak periods—which tend to be in the middle of the day when there is sun—has fallen on the power exchange, benefiting big industry. In the past, peak demand was met by starting up coal-fired power plants; now photovoltaics and wind are covering increasingly large shares of this daytime demand (Renewables International, 2012).

Placating major industries and the four major utility companies, which account for 80 percent of electricity generation in Germany, with exemptions from the added costs of renewables may produce political benefits in the short term. In the long term, such a policy is likely to face serious political problems due to rising costs to consumers. For the time being, energy efficiency initiatives could be the best means for keeping overall consumer energy prices from rising too far. Even so, the question of how long big industry will be exempted from the cost of the shift to renewable energy sources is sure to be raised in the near future.

The politics of a renewable future

The German phase-out of its nuclear industry is not simply a decision about one energy source. It is also a decision to wean the country from costly, polluting fossil energy sources and shift dramatically in the direction of sustainable energy. The German population is highly concerned about climate change. A 2011 Eurobarometer survey found that 66 percent of German respondents saw climate change as “the single most serious problem facing the world as a whole” (European Commission, 2011). Although German leaders and citizens have expressed considerable frustration that other major countries, especially the United States, appear uncommitted to action on climate change, there is also a general sense in Germany that the nuclear phase-out and Energiewende can create a new model that influences environmental and energy policy decisions elsewhere.

It would be wrong to think, however, that the Germans are acting out of purely altruistic or environmental motives. There is considerable optimism that, despite the huge challenges and the substantial early economic costs of the Energiewende, it will eventually result in significant economic gain. The previous 20 years or so of investment in renewable energy and energy efficiency improvements have spawned new industries. By the time of the Fukushima disaster, the renewable energy sector in Germany was estimated to support 370,000 jobs, and Germany was a global leader in renewable energy exports and patents (Federal Ministry for the Environment, Nature Conservation and Nuclear Safety, 2011). Since Fukushima, the capacity growth in renewables has been strong. According to the German Association for Energy and Water Industries, in the first six months of 2012, renewables supplied 25 percent of electricity consumed, up from about 17 percent at the end of 2010. About 9.2 percent of this total came from wind, 5.7 percent from biomass, a remarkable 5.3 percent from photovoltaic (a 47 percent increase over the same period a year earlier), about 4 percent from hydro, and less than 1 percent from waste incineration (Bundesverbandes der Energie- und Wasserwirtschaft, 2012).

Strong public support for sustainable economic structures has come from local and regional governments, many of which were early pioneers in generating and implementing new sustainability programs and ideas. Many communities have succeeded in developing passive housing that, by design, requires far less energy to heat and cool, expanding the use of biogas and combined heat and power (i.e., cogeneration, which integrates the production of electricity and usable heat from coal- and gas-fired power stations), reducing waste generation, developing public transportation systems, and encouraging bicycling. These efforts aim to save money on energy bills, make communities more attractive to live in, and support entrepreneurial thinkers. Such communities can be found across Germany; their supporters come from all political parties.

In Bayern, a stronghold of the Christian Socialist Union—a regional sister party to the conservative Christian Democratic Union—many farmers and investors have profited from feed-in tariff support for solar photovoltaics. Many of Germany’s famous small- and medium-sized enterprises have been beneficiaries of the country’s push toward a more sustainable energy structure. In 2007, environmental technologies accounted for 8 percent of the country’s GDP. Expectations are that they will hit the 14 percent mark in 2020 (Bundesministerium für Umwelt, Naturschutz und Reaktorsicherheit, 2009). Even within the conservative political parties, the Energiewende enjoys substantial support.

Fukushima changed the nature of the energy debate in Germany primarily by building a cross-party consensus—albeit one that some politicians in the conservative parties joined only grudgingly—on the phase-out of nuclear energy. The Energiewende will take decades to fully implement and will surely hit obstacles on the way, but it is a development that brings with it exciting opportunities for Germany and, perhaps, a blueprint for the world.

Funding

This research received no specific grant from any funding agency in the public, commercial, or not-for-profit sectors.

Acknowledgements

This article is part of a three-part series on the implications of phasing out civilian nuclear power in Germany, France, and the United States. Additional editorial services for this series were made possible by grants to the Bulletin of the Atomic Scientists from Rockefeller Financial Services and the Civil Society Institute.

Article Notes

1 It was also in this year that the federal government, together with several German banks, set up the German Energy Agency (Deutsche Energie-Agentur GmbH), a for-profit, public–private initiative with a mission to develop energy efficiency and renewable energy markets both on the consumption side (buildings, power, and mobility) and on the suppliers’ side (generation, networking, and storage), and to advise governments and business on renewables and energy efficiency (Deutsche Energie-Agentur, 2012). In 2011, the renewable energy sector employed more than 380,000 in Germany.

2 For photovoltaics, the feed-in tariff was cut by 15 percent. The feed-in tariff rate now ranges between 13.5 and 19.5 euro cents per kilowatt hour, depending on the size and type of system. The feed-in tariff for solar is to be ended when 52 gigawatts of solar capacity is achieved. The feed-in-tariff rate for offshore wind is set at 15 euro cents per kilowatt hour (Bundesministerium für Umwelt, Naturschutz und Reaktorsicherheit, 2012; Federal Ministry for the Environment, Nature Conservation and Nuclear Safety, 2012).

 

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↵ Renewables International (2012) Merit Order Effect of PV in Germany. February 2. Available at: http://www.renewablesinternational.net/merit-order-effect-of-pv-in-germany/150/510/33011/ .

↵ Rucht D (1990). Campaigns, skirmishes and battles: Anti-nuclear movements in the USA, France and West Germany. Organization & Environment 4(3): 193–222. Abstract

↵ World Nuclear Association (2012) Nuclear Power in Germany. Available at: http://www.world-nuclear.org/info/inf43.html (accessed August 26, 2012).

Author biography

Miranda A. Schreurs is director of the Environmental Policy Research Centre (Forschungszentrum für Umweltpolitik) and professor of comparative politics at the Freie Universität Berlin. She is a member of the German Environment Advisory Council and chair of the European Environment and Sustainable Development Advisory Councils; she was also a member of the German Ethics Commission on a Safe Energy Supply.

The German Nuclear Exit: Exit economics (Part 4)

Exit economics: The relatively low cost of Germany’s nuclear phase-out

By Felix Chr. Matthes

Abstract

The decision of the German government, post-Fukushima, to phase out the country’s nuclear power sector by 2022 builds on legislation in place since 2002. This earlier legislation was amended in 2010 to extend the lifetime of the nuclear plants, but the German parliament reversed this extension in the summer of 2011, slightly accelerating the original phase-out schedule; therefore, the market and the nuclear operators were prepared for the shutdown schedule. In this context, it is not surprising that the observed price impacts from the shutdown of 40 percent of the German nuclear power capacity in 2011 are smaller than some modeling exercises had projected. When empirical observation is analyzed in light of a range of economic models, the price effect of the nuclear phase-out can be expected to peak at 5 euros per megawatt-hour or less for a few years around 2020, a reasonably small increase compared with the uncertainties created by other fundamental determinants of Europe’s electricity prices. The macroeconomic effects attributable to the complete shutdown of nuclear power also appear likely to be relatively small, peaking at perhaps 0.3 percent of gross domestic product or less a few years before 2030. In the end, the management of the German transition to an energy mix dominated by renewable energies—and not the use of the existing nuclear reactor fleet for a decade more or less—will be the key determinant of whether that shift has larger or smaller effects on electricity prices or on the German economy overall.

The decision of the German government and, by a huge majority, the German parliament to restrict the lifetime of nuclear reactors and to phase out nuclear power generation in Germany by the end of 2022 was a political decision based on a fundamental risk assessment. on the one hand, such risk assessments must balance the size of potential damage and the probability of its occurrence under major uncertainties for both parameters; on the other hand, such assessments need to reflect political realities. But the wide range of cost estimates for severe nuclear accidents or disasters—from several hundred billion to several trillion euros1—makes a comprehensive and robust cost–benefit analysis extremely difficult to complete, leading ultimately to decisions based on fundamental ethical judgements.2

This does not, however, mean that implicit and explicit economic considerations have not played a significant role in the German decision-making process. The variety of political decisions on the country’s existing nuclear fleet in the last decade has generated not only heated political debate, but also a broad range of quantitative analyses on cost issues. A comprehensive economic assessment of the final results of the phase-out does not yet exist, but the existing information does support some assertions on the economic dimensions of the phase-out, in both the short term and the longer term, and on the economic effects of past nuclear policy.

Especially in terms of politics, different cost issues have different significance. Some of the analyses of the German energy turnaround focus solely on macroeconomic efficiency or on impacts on gross domestic product, but distributional aspects and selected indicators—particularly electricity prices— are usually more significant in political terms and, therefore, often more meaningful to assess.

Although there are many perspectives on the economic dimension of phase-out, experience has already shown that the electricity price impact of shutting down 40 percent of German nuclear capacity was less significant than assumed in some earlier modeling exercises. The macroeconomic effects that could be attributed to the complete shutdown of nuclear power by 2022 also appear likely to be small. In the end, it is not the use of the nuclear reactor fleet for a decade more or less, but the management of the German transition to an energy mix dominated by renewable energies that will be the key determinant of whether that transition has larger or smaller effects on electricity prices or the country’s overall economy.

Economics in the nuclear past

At the turn of the century, nuclear power represented 29.4 percent of the total electricity supply in Germany. The production level of approximately 170 terawatt-hours marks the country’s peak level of nuclear power generation, reached between 1997 and 2001. The decline thereafter was a result of political decisions, of the sort that have shaped the industry since the introduction of nuclear power to Germany in 1961. Therefore, some aspects of past nuclear policy must be considered in order to properly understand the politics and the economics of the nation’s nuclear phase-out.

In the past 60 years, apart from major public spending on research and development and nuclear waste disposal, two major policy interventions made commercial nuclear power generation possible in Germany. First, the government made the first generation of commercial reactors attractive to electric utilities through broad government guarantees —including liability limits—that reduced the commercial risk of nuclear power plants to a level equivalent to the economic risk for investments in conventional coal-fired power plants (Müller, 1996). Also, the government’s strong support scheme for domestic coal production in Germany obliged power generators to use expensive hard coal from domestic mines for electricity generation, rather than cheaper hard coal from the international market. As a result, power generated from hard coal cost more than it otherwise would have, making investment in nuclear power plants economically more attractive. After-the-fact analysis shows that without this coal-support policy, investments in nuclear power plants would have been unattractive in Germany after 1984 (Bohn and Marschall, 1992; Kim, 1991).

When Germany reunified in 1990, 19 commercial nuclear reactors were operational in the western part of the country, representing a total installed net capacity of 20,800 megawatts.3 The entire nuclear investment program in Germany—which stretched from 1968 to 1989—took place within the framework of a highly monopolized power market. Ever since 1935, the country’s power system had been shaped by regional monopolies and investment regulations that made investment decisions subject to regulatory approval. once an investment had been approved, the electric utilities were allowed to include the respective investment costs and a fixed profit margin in electricity rates. An extreme case of this regime was the nuclear reactor of Mülheim Kärlich. The 1,200-megawatt reactor produced electricity for only one year, but the investment was entirely recovered from the ratepayers. This regulatory scheme ended in 1998, with a liberalization of the electricity market, driven mainly by the European Union, that resulted in competition among utilities within Germany as well as across borders and led to a situation where costs can be recovered only from sales to a competitive market.

Among many, three economic factors are of special importance for the nuclear phase-out attempts in Germany: First, an enormous amount of public spending went into the nuclear sector, totaling 88 billion euros from 1950 to 2012 (at 2012 prices),4 a cost that was and is clearly perceived in the public debates over nuclear power. Second, the nuclear investment campaign was completely implemented within the framework of a monopolistic market, which allowed nuclear operators full recovery of investment costs that increased significantly over time; as a result, public and political confidence in nuclear power as a cheap source of power was low or nonexistent. Third, the nuclear fleet was, to a significant extent, written off when the electricity market was liberalized in 1998 and a coalition of Social Democrats and Greens—parties firmly opposed to continued use of nuclear power—took office for the first time.

The phase-out scheme of 2000 and 2002

Phasing out nuclear power has been a core issue in the politics of the Green Party since its establishment in 1980 and has been part of the political program of the Social Democrats in Germany since 1986, when the Chernobyl disaster occurred. As a logical consequence, nuclear phase-out was one of the political priorities of the new government in 1998.

The Social Democrat–Green coalition treaty of 1998 required the government to go for a phase-out strategy that would not lead to compensation for the owners and operators of the nuclear fleet. In the tradition of German corporatism, the government negotiated a contract with the nuclear industry in 2000 that included, among other aspects, a ban on any new licensing of nuclear reactors and a flexible phase-out scheme for the existing reactors. This model was based on an allowance for 32 years of operation for each reactor and the option of transfers of these entitlements among reactors.

The key motivation for this model was the assumption that the legal risk would be very low if the operators were allowed to run the reactors for the full depreciation period and even accrue extra revenue from a few additional years of operation. This approach led to a phase-out trajectory that had some early plant closures and significant capacity shutdowns in the periods from 2011 to 2015, 2018 to 2020, and 2022 to 2024 (see Figure 1). The German government and the nuclear operators signed a contract in June 2000; it was translated into legislation by the end of 2001 and entered into force in January 2002. In 2003 and 2005, the first two reactors were closed under the new phase-out scheme. Although this phase-out was clearly policy-driven, it should be noted that economic interest in the nuclear industry decreased significantly after the liberalization of the electricity market, which resulted in extremely low wholesale market prices after the turn of the century. From 2000 to 2003, power traded at 20 to 25 euros per megawatt-hour in the German wholesale market, which made it difficult for nuclear power plants to cover the cost of operation, as well as make the necessary provisions for decommissioning, waste management, and profit.

Figure 1.

Nuclear phase-out trajectories for Germany according to 2000, 2010, and 2011 decisions and legislation

Source: Bundesamt für Strahlenschutz (BfS), author’s own calculations.

Another result of the electricity market liberalization and the increasing integration of the northwestern continental electricity market (which includes Germany, France, Austria, the Netherlands, Luxembourg, and Belgium, with strong interconnector capacity to Switzerland) was a new kind of price formation. Electricity prices no longer depended on the average cost of power generation (and, therefore, the fuel mix used to generate that power). Prices were now set according to the short-term marginal costs of the marginal generation unit, which was a hard-coal or gas-fired unit in the continental regional market. As a result of this new method of price formation and increasing market integration, the power prices in the northwestern continental market converged, settling in France (with a 75 percent nuclear share of its power generation) at the same level as in Germany (with 30 percent nuclear) or Austria (which is nuclear-free).5

Only a few years after the phase-out legislation entered into force, however, the economics in the continental European power market changed fundamentally. Hard coal and gas prices increased significantly; in 2005, the European cap-and-trade scheme for greenhouse gas emissions (the European Union Emissions Trading Scheme) was implemented and wholesale market prices increased significantly. By 2008, the wholesale market prices tripled to levels of 70 euros per megawatt-hour and maintained levels of 40 to 50 euros in 2009 and 2010. In this economic framework, the operation of nuclear plants became highly profitable (Matthes et al., 2011c) and the interest in extending the lifetime of the German nuclear plants grew significantly. This economic interest became even stronger when a series of reactors reached the limits of their production entitlements at the end of the first decade of this century, and the legal restrictions did not allow significant transfers of production allowances to these units.

The German political situation had allowed for no changes in the phase-out legislation before 2009; the Social Democrat–Green government that initiated the phase-out was re-elected in 2002, and in 2005, to create a governing majority, the conservative Christian Democratic Union (CDU) and Christian Social Union (CSU) had to go for a grand coalition with the Social Democrats. But political backing for the phase-out disappeared when the coalition of CDU/CSU and the liberal Free Democratic Party won the elections in 2009. Both parties were programmatic supporters of nuclear energy and strict opponents of the phase-out scheme of 2002.

The double U-turn of 2010 and 2011

The 2009 coalition treaty between the conservatives and the liberals included a clear agreement on the lifetime extension of the existing nuclear reactors in Germany. After a long debate, the government presented a decision embedded in a broad energy policy approach (BMU, 2011):

The lifetime of existing plants was extended for eight or 14 years, depending on the age of the reactors, without changing the 2002 implementation approach that allowed unused nuclear plant running times to be transferred to other plants.

The ban on licensing of new reactors was not changed.

To share the windfall profits from the lifetime extensions, the government and industry agreed to voluntary payments by nuclear operators to an energy and climate fund. As a result of the deal, the nuclear operators were able to gain extra profits from significantly larger production entitlements, and the government earned some extra income, which was earmarked for energy policy projects.

The decisions on nuclear energy were embedded in a set of short-, medium-, and long-term targets for greenhouse gas emission reductions (40 percent by 2020, 55 percent by 2030, and 80 to 95 percent by 2050, compared with 1990 levels), the expansion of renewable energy production (increasing to 50 percent of the energy portfolio in 2030 and 80 percent in 2050), and greater energy efficiency (a 50 percent reduction of primary energy consumption by 2050).

Although the 2010 energy policy decisions were mainly motivated by the attempt to extend the lifetime of existing nuclear reactors, the complementary energy-policy decisions were of real importance. First, even as it was extending reactor lifetimes, the ruling coalition stated clearly that nuclear energy should only be a temporary option, and new nuclear investments would definitely not be allowed in the longer term. Second, the decarbonization of the energy system by the middle of the century was established as the new overarching paradigm of energy policy.

All in all, the nuclear plant lifetime extension in 2010 represented a net profit for the nuclear power generators of 42 billion to 64 billion euros, after taxes (Matthes, 2010), which created an enormous debate on the distributional aspects of the decision. The climate-policy dimension of the lifetime extension did not play a central role in this debate, given the fact that the emissions were already capped for long periods by the European Union Emissions Trading Scheme, and the nuclear decision in Germany would not impact the cap or have an additional impact on overall emission levels.

In the aftermath of the Fukushima disaster of March 2011, however, the German government issued an operating moratorium for the eight oldest reactors and initiated a fundamental change in nuclear policy. After debate, the German parliament approved new nuclear legislation with an overwhelming cross-party majority.6 The new legislation essentially consisted of two parts: First, the extension of electricity generation entitlements was reversed and the original levels of the 2002 legislation were reinstated. Second, the nuclear production allowances were complemented by fixed plant-closure dates for each reactor. Effectively, this new legislation accelerated the original phase-out schedule by two to three years (see Figure 1). Although this political decision was taken in a very short time frame, the respective debate and the impact assessments relied on the very broad range of analysis that had been carried out in 2010 and before. More important, the nuclear operators, the market, and the network operators had had time to prepare for the gradual shutdown of the rectors over the course of a decade. This advance warning clearly had significant implications for the economic impacts of the accelerated shutdown schedule implemented in 2011.

Economic dimensions of the nuclear phase-out, and the longer perspective

The economic effects of nuclear phase-out have been the subject of a wide range of modeling-based analysis—during the debates in 2010 and before—and observed data have also been studied fairly extensively since March 2011. The electricity-pricing impact of nuclear plant lifetime extensions or restrictions has obviously been a major focus of analysis and debate. The macroeconomic impacts—e.g., on gross domestic product—have been discussed widely but in a much less heated way.7 At any rate, in the absence of the option of new nuclear investments, all economic impacts of the nuclear phase-out will be temporary. In all the phase-out scenarios decided upon in 2000, 2010, and 2011, the most significant differences in terms of electricity prices and gross domestic product impact would occur by 2030 and disappear gradually after that.

The issue of compensation for the owners of the nuclear plants was not a serious issue in the debates of 2011. This is a result of the design of the 2000 agreement between the German government and the nuclear utilities, which was carefully crafted to prevent any need for compensation payments.8 Nevertheless, three of the four nuclear operators (RWE, E.ON, and Vattenfall) took legal action to claim compensation payments after the 2011 phase-out decision (Rossnagel and Hentschel, 2012). Given the fact that this decision only re-introduced and slightly accelerated a legal status which had existed since January 2002, the chances of effectively obtaining any compensation must be assessed as rather low.9

Nuclear plant owners will also, of course, face the issue of decommissioning. According to German legislation, however, the nuclear operators set aside decommissioning funds that were held on their balance sheets and allowed to be invested, generating additional returns. These decommissioning funds, amounting to about 28 billion euros (BReg, 2010), are probably sufficient for the full decommissioning of all plants.

Impact on electricity prices is probably the most important factor of the nuclear phase-out in terms of politics and the public perception. The broad range of modeling exercises carried out in 2010 and 2011 in regard to the phase-out and electricity prices can be summarized in this way: The price impacts peak at ranges of almost nothing to approximately 10 euros per megawatt-hour in the period from 2020 to 2030. The higher bound of this range (Fürsch et al., 2012; r2b/EEFA, 2010; r2b, 2011; Schlesinger et al., 2010, 2011) is equivalent to a 15 percent price increase for energy-intensive industries, a 4 percent increase for the service sector, and a 2 percent increase for small customers and households. Other modeling and analysis (Kunz et al., 2011; Loreck et al., forthcoming; Matthes et al., 2011a, 2011b) attribute power price increases of 5 euros per megawatt-hour or less to the nuclear phase-out—that’s to say, just half of the price increases indicated above.

A closer look at the modeling approaches and assumptions brings further insights:

In most of the modeling exercises, a large share of the price increase, post-phase-out, is projected to result from expected increases in the price of carbon-dioxide emission permits, which are difficult to estimate. In light of the observed market trends, the upper-range projections of electricity price increases after the phase-out clearly include overstated projections of increases in the price of carbon-dioxide permits.

Cross-border interactions in the integrated continental European power market can be significant but are extremely difficult to assess. As a general trend, cross-border effects curb the electricity price impacts of changes in the market.

Assumptions on the distribution of domestic and foreign investments form a decisive parameter for price equilibrium in the European power market. If the nuclear phase-out were to be complemented by only a few investments in conventional or renewable energy capacity, the shutdown of nuclear plants would lead to high price impacts; if there is significant investment, the price effects will be rather low. If these investments take place outside of Germany, this would increase electricity imports. Recent trends, however, show that Germany has maintained its role as a net electricity exporter, and significant new power plant capacities have been commissioned within its borders. These trends disprove economic models that assume the phase-out will cause the country to become an electricity importer and to make insufficient domestic investments in conventional and renewable capacities.

After the nuclear moratorium in March 2011, operational nuclear capacity decreased—as a result of the moratorium and long-time scheduled maintenance work—by 70 percent. For a few days, nuclear capacity was at a level that won’t be reached again until the end of 2021, according to the final phase-out arrangement. After this period, the long-term capacity loss still amounted to approximately 40 percent, or 8,300 megawatts, of the installed nuclear capacity of Germany. This special situation offers a unique opportunity to identify the wholesale market impact of a major capacity shutdown.

Calculations based on data from the European Energy Exchange show an increase of power prices before the nuclear moratorium, driven by rising fuel and carbon-dioxide allowance prices, and a significant price signal immediately after the first series of plant shutdowns. That signal, however, disappeared very quickly in subsequent weeks. After the summer of 2011, electricity futures prices were again predominantly driven by pre-Fukushima patterns, depending on fundamental fuel and carbon-dioxide price trends; because they are a component cost of overall power prices, increasingly weak carbon-dioxide emissions prices led to significantly decreasing electricity prices. A more detailed and methodologically advanced analysis (Thoenes, 2011) underlines the finding: The price signal from the nuclear shutdown in March 2011 could not be detected after the summer of 2011. The integrated continental European market obviously has adapted to the new supply structure and found a new equilibrium at price levels that do not differ significantly from the ones before the moratorium or are extremely low compared with the other fundamental determinants of the power market.

If these empirical observations are compared with the modeling done ahead of the phase-out, it’s clear that most of the modeled price effects, at least from the first tranche of plant shutdowns, exceed the observed impacts on electricity price significantly. Given all the uncertainties and interactions involved in electricity pricing, and considering the full range of estimates of the effects that Germany’s phase-out might have, a price increase of 5 euros per megawatt-hour for a few years is probably the maximum that can be attributed exclusively to the gradual phase-out of nuclear power. Furthermore, it should be noted that the uncertainties and volatilities for many relevant factors—the price of fuel and carbon-dioxide emissions permits, domestic and international investment activities, the level of economic activity, etc.—are probably much more significant for the longer-term price trends in the German and continental European power market than a restriction of the lifetime of nuclear reactors as implemented by the German phase-out legislation.

In terms of keeping electricity costs low, the most significant challenge will arise from the country’s long-term transition to renewable energies, a process that was in fact the ultimate goal even within the framework of the nuclear power plant lifetime extension in 2010. The effects of this transition cannot be seen as associated exclusively with the accelerated phase-out of nuclear power. But a carefully designed, robust, and flexible strategy of transition to renewable energies—with sufficient lead-times and a strong emphasis on straightforward implementation and practical learning—will make this transition more effective and efficient in the framework of an ambitious phase-out policy, particularly for a technology-based country like Germany.

Most estimates of the macroeconomic impacts of Germany’s accelerated nuclear phase-out have been made in models that reflect not only the nuclear energy sector, but also Germany’s entire decarbonization approach, which includes all its energy sources. This integrated transition toward an energy-efficient and renewable energy-based economy makes it extremely difficult to isolate the macroeconomic consequences of the nuclear phase-out strategy. The existing analysis on the very ambitious decarbonization strategies of Germany and the European Union does, however, indicate that their macroeconomic impacts will amount to significantly less than one percentage point below or above the business-as-usual case during the course of the next four decades (European Commission, 2011a, 2011b; Kirchner et al., 2009; Schlesinger at al., 2010, 2011). The impact of nuclear phase-out decisions peaks at 0.3 percent of total gross domestic product in the decade between 2020 and 2030 (Schlesinger et al., 2010, 2011). Even this relatively small decrease of GDP growth, however, is mainly premised on a high—and probably greatly overstated—electricity price impact of the nuclear phase-out.

These aforementioned analyses assumed that the only concerns were the timing of a nuclear phase-out and a policy that relies mainly on renewable energies to reach decarbonization goals by mid-century. This approach reflects the existing political debate but leaves out the possibility of use of nuclear power in the system, which would require major new investments in nuclear plants in coming decades.

Research conducted by the European Commission for the European Energy Roadmap 2050 (European Commission, 2011b; Matthes, 2012) shows a decision for or against an energy mix that includes or excludes new investments in nuclear power plants probably would not lead to major differences in terms of the cost impacts of a decarbonization program. Against this background, the strategic choices on the future shape of the electricity system should primarily rely on other issues—for example, the assessment of risk options and security of supply considerations. The transition to a decarbonized energy system without nuclear power needs well-designed strategies and policies. In the context of an energy system that will, in any case, need major investments, this transition could be achieved at comparatively low cost.

The surprisingly small cost of nuclear exit

Within the last decade, German nuclear policy has significantly changed course three times. The final decision in 2011 to pursue an accelerated shutdown of the German nuclear power industry actually marks the return to a phase-out schedule initially put into place in 2002, for which the nuclear operators and the market had prepared over the course of a decade.

As a result of this lead time, the electricity price impacts of the 2011 shutdown of the first 40 percent of nuclear capacity in Germany was much less significant than assumed in some of the broad range of modeling exercises that fueled nuclear debates in 2010 and 2011. If the empirical observations are considered with a range of model assessments, it seems likely the price effect of the nuclear phase-out will peak at 5 euros per megawatt-hour or less for a few years around 2020. Compared with the uncertainties and volatilities related to other fundamental determinants of the electricity price in continental Europe, this is a reasonably small effect. The same situation holds for the macroeconomic effects of the phase-out, which could peak at 0.3 percent of gross domestic product or much less a few years before 2030. Again, this increase is within the range of the usual uncertainties and relatively small.

The small economic effects of the German nuclear phase-out become even more obvious, if the ultimate goal of decarbonization of the energy system is factored into the equation. The management of this overarching transition to renewable energies by the middle of the century—and not the use of the existing nuclear reactor fleet for a decade, more or less—will be the key determinant of the electricity price changes or macroeconomic impacts. Recent European research underlines the point: Maintaining the nuclear energy pathway could not provide significant economic benefits. The accelerated and short-term nuclear phase-out, however, has the potential to provide an appropriate framework for a straightforward transition of the electricity system toward renewable energies, particularly because Germany has the technological base to support that transition. Furthermore, a strong push on sustainable technologies and innovative energy infrastructure systems has the potential to strengthen Germany’s position as a major te

chnology-exporting country and create the macroeconomic benefits that derive from such front-runner status.

Funding

This research received no specific grant from any funding agency in the public, commercial, or not-for-profit sectors.

Acknowledgements

This article is part of a three-part series on the implications of phasing out civilian nuclear power in Germany, France, and the United States. Additional editorial services for this series were made possible by grants to the Bulletin of the Atomic Scientists from Rockefeller Financial Services and the Civil Society Institute.

Article Notes

1 See CBO, 2008, and Ewers and Rennings, 1992, for the broad range of cost estimates on severe nuclear accidents.

2 Not coincidentally, the German government set up an Ethics Commission in the aftermath of the Fukushima disaster to frame the accelerated phase-out legislation in 2011 (Ethics Commission, 2011).

3 A special challenge emerged during the German re-unification due to the East German nuclear fleet, which consisted entirely of reactors of outdated Soviet design. In 1990, five nuclear reactors were operating in East Germany, and six others were under construction or in testing operations. All the East German reactors were shut down in 1990 due to concerns about accidents, and all new reactor projects in the East were canceled (Matthes, 2000). The East German experience raised awareness about the significant costs of decommissioning reactors and other parts of the nuclear chain. Although a generic issue with nuclear power, the East German case made it extremely transparent; the decommissioning costs were transferred to the public budget. By 2012, in fact, 11.9 billion euros of German taxpayers’ money (at 2012 prices) was spent on decommissioning the East German reactors (3.3 billion euros), disposal sites (700 million euros), and cleaning up uranium mines (7.1 billion euros) in the southern part of the former East Germany (Küchler et al., 2012).

4 These data were calculated from Matthes, 2000, and Küchler et al., 2012. only the non-controversial data (in the narrow definition of public spending) from the latter publication were considered for this calculation.

5 Austria has no nuclear power plants; however, Vienna University of Technology’s Atominstitut operates the country’s only nuclear research reactor.

6 The revised phase-out legislation in 2011 was approved by 513 yes votes versus 79 no votes and eight abstentions. The comparison with the vote on lifetime extension of the German nuclear plants (309 yes, 280 no, and two abstentions) and the first phase-out legislation in 2001 (345 yes, 324 no, and zero abstentions) underlines the exceptional consensus on this piece of legislation.

7 This is hardly surprising; the macroeconomic impacts of the nuclear phase-out are mainly predetermined by electricity price impacts and are, therefore, subject to the debate about those impacts in a world of increasingly high and volatile fuel prices.

8 Even the newly introduced nuclear fuel tax was not seen as a robust foundation for any compensation payments, because it was viewed mainly as a compensation for windfall profits that nuclear operators reaped after the introduction of the European Union Emissions Trading Scheme in 2005, which increased wholesale market prices, a result that was neither reflected nor foreseeable in negotiations of the phase-out agreement in 2000.

9 Additional legal action against the nuclear fuel tax failed before the Federal Tax Court in March 2012. As a result, there is a comparatively high probability that compensation payments for the nuclear operators based on the readjustment of the nuclear policy in 2011 will not occur.

 

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Author biography

Felix Chr. Matthes is research coordinator for energy and climate policy at the Institute for Applied Ecology (Öko-Institut) in Berlin, Germany. He served as a scientific member of the German Bundestag’s Study Commission on Sustainable Energy from 2000 to 2003 and was appointed in 2011 as a member of the Advisory Group to the European Commission on the Energy Roadmap 2050. He was a fellow of the German Marshall Fund of the United States in 1993 and a visiting scientist at the Massachusetts Institute of Technology in 2007 and 2008.