Wednesday, November 02, 2011

Germany Nuclear Phase Out Same as Putting 4.4 Million Cars on the Road

We return, once more, to Germany where details are starting to emerge on the real costs of their nuclear phase out.

Let’s start with emissions. According to an estimate by Laszlo Varro, the head of the gas, coal, and power markets division at the International Energy Agency emissions will rise significantly.

Varro estimates that the nuclear phase out in Germany has caused a 25-million-ton annual increase in carbon dioxide emissions. The culprit, in large part, is the new coal power that has come online to meet the shortfall.

25 million tons is sort of abstract, but EPA has a pretty cool tool: the Greenhouse Gas Equivalencies Calculator. It finds more concrete alternatives to “tons of carbon dioxide” like “emissions from passenger vehicles.” Turns out 25 million tons of CO2 emissions per year is equal to (pick your favorite one of the following):

  • Annual greenhouse gas emissions from 4,446,984 passenger vehicles or
  • CO2 emissions from 52,743,297 barrels of oil.
  • CO2 emissions from the electricity use of 2,827,882 homes.
  • CO2 emissions from burning 123,494 railcars’ worth of coal.
  • Annual CO2 emissions of 5.4 coal-fired power plants.

Imagine adding emissions from 4.4 million cars in a country of 80 million. Or the emissions from almost 3 million homes. That’s essentially what Germany’s done with its phase out of nuclear power.

Don’t forget jobs. Obviously, the European economy isn’t doing too well. While Germany seems to be weathering the storm fairly well, losing 11,000 jobs can’t help.

E.ON, the world's largest utility by sales, joined peers in posting weak half-year results as Germany's decision to abandon nuclear power forced it to slash its profit outlook, its dividend and up to 11,000 jobs.

There are also concerns over the nuclear phase out’s long-term drag on Germany’s export-oriented economy. One estimate has energy bills up 20%.

Christian Schulz, senior European economist at Berenberg Bank, said estimates suggested the nuclear shutdown would increase Germany's energy bill by a fifth, which will hit the country especially hard since its economy relies heavily on its energy-intensive manufacturing industry to propel growth.

This sort of things makes you understand German manufacturers’ concerns about competitiveness. But the phase out isn’t sparing consumers either.

German households pay twice as much for power than in France, where 80% of energy is generated by nuclear plants. Klaus Abberger, senior economist at the Ifo institute for economic research at the University of Munich, said energy prices had already gone up since plans to end nuclear power generation and would stay at high for at least the next five years [emphasis added].

So much for “expensive nuclear power.” Perhaps this is behind Belgium’s qualified rethink on nuclear power.

The plan for a shutdown of the three oldest reactors by 2015 and a complete exit by 2025 is conditional on finding enough energy from alternative sources to prevent any shortages.

"If it turns out we won't face shortages and prices would not skyrocket, we intend to stick to the nuclear exit law of 2003," a spokeswoman for Belgium's energy and climate ministry said.

That’s a fair share of caveats. At least this gives  Belgium a face-saving out if they can’t find cost effective “alternative sources” scalable enough to prevent blackouts. Renewables and natural gas may just fit the bill. Or not. Renewables are hard to scale up. Natural gas prices are hard to predict. But Belgium, unlike Germany, at least has given itself time to consider the alternatives.

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