09.03.2012
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Energy policy

The German switch from nuclear to renewables – myths and facts

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As a reaction to the nuclear disaster in Fukushima, Japan, starting on March 11, 2011, German Chancellor Angela Merkel's governing coalition shut down roughly 40 percent of the country's nuclear generating capacity in mid-March 2011 and roughly re-implemented the original nuclear phase-out set forth under Chancellor Schroeder’s Social-Democrat/Green government. This change has been criticized as a panicked overreaction that would hurt the German economy and harm energy security. A year later, however, we can see what the temporary effects have been and what the long-term effects are likely to be.

But first, we need to understand the context. Germany has one of the largest shares of renewable power on its grid of any industrialized country. In the first half of 2011, Germany crossed the 20 percent threshold for renewable electricity in its power supply (the figure for the US is less than five percent excluding hydropower). By 2011, 25 gigawatts (GW) of photovoltaics had been installed. Solar power can already peak at an astonishing 40 per cent of power demand on sunny summer days (see chart below).

Compare that to the United States (PDF), which had a mere 0.5 percent of peak summer demand at the end of 2011. For Americans to be at the level of German PV in terms of peak summer demand, roughly 80 times the current level would need to be installed already.

Chart 1: German power supply stats 2011

Will Germany not have to simply import nuclear power from other countries?

Germany has been a net exporter of power for years and remained so in 2011.

And keep in mind that nuclear plants generally run at full capacity – meaning that they usually cannot be ramped up any further. In all likelihood, German power imports, which have increased slightly over the past twelve months, will be based more on conventional generation than on nuclear.

At the beginning of 2011, Germany had a dispatchable (i.e., not including solar and wind) power generating capacity of 93,100 megawatts, and roughly 8,000 of that was switched off last March. According to the German Association of Energy and Water Industries (BDEW), Germany exported 90,000 megawatt-hours net per day on average in the six weeks leading up to the moratorium on nuclear in mid-March 2011, whereas starting on March 17, 2011, the country began importing an average of 50,000 megawatt-hours net per day. Nonetheless, Germany remained a net exporter of power in 2011.

To the east, more power might be imported from the Czech Republic, but not because of any electricity shortage in Germany. Rather, the German power market buys conventional electricity where it is cheapest. But countries like Poland and the Czech Republic are not complaining about having to prop up the German grid after the nuclear moratorium. On the contrary, they are mainly concerned about wind and solar power surges from Germany offsetting their own production of fossil and nuclear power.

To the west, and contrary to the numerous claims that France is a major power exporter to Germany, the opposite has been the case for several years now – as official French statistics themselves reveal (see chart 2 below). In other words, Europe's nuclear powerhouse – France – has been a net importer of power over the past few years from one of Europe's leaders in green power – Germany.

Chart 2: France is a net importer of electricity from Germany

Source: RTE Activity Report 2010

Isn't Germany planning to replace nuclear largely with natural gas, which only goes to show that renewables alone cannot replace nuclear?

Yes to the first part of that question, no to the second. In addition to renewable power, natural gas is to be a main source of electricity to fill the gap left behind by decommissioned nuclear plants. While proponents of 100 percent renewables might cringe at the idea, the combination makes sense: nuclear plants by design cannot ramp up and down quickly, making them completely incompatible with intermittent green power. But gas turbines can be easily switched off for only hours at a time, run at partial capacity, and then quickly ramp up again.

The partial switch to natural gas also lays the foundations for a feasible solution to the problem of storing excess power: power to gas, in which excess solar and wind power is used make hydrogen. Germany also plans to refine more and more biogas into "biomethane," essentially biogas with properties nearly identical to natural gas. For an example, see this presentation of a hybrid plant. Stephen Lacey also discusses “virtual power plants” as one of five things that need to be done in the switch to renewables.

As natural gas becomes scarcer and more expensive, Germany could produce excess solar power in the summer, store it for the winter as gas, store excess wind power as gas for hours and days at a time, and use dispatchable cogeneration turbines running increasingly on biomethane as natural gas is phased out. No fancy gas storage tanks will be needed; Germany will just use the gas lines it already has.

In 2010, researchers from Germany’s Fraunhofer estimated that the German gas network has a storage capacity equivalent to more than four months of German power consumption. German researchers have also estimated that 100 percent renewable power would only "require up to two weeks at a time to be bridged during the winter," far less than the four months already available. But that two-week gap can only be crossed if Germany gets rid of nuclear and resorts to natural gas as a bridge today.

In other words, Germany actually has an action plan to reach 80 percent renewable power, and natural gas is a temporary part of that plan. In addition, a number of studies have been published to show how Germany could go 100 percent renewable such as here, here, here (PDF in German), and here (PDF in German). And let’s not forget the organization called 100% Erneuerbar – or the study called Energy Rich Japan that German researchers and one from Japan did on how Japan could get all of its energy from renewables way back in 2003. Do we Americans have any such plan?

What about coal power – is Germany not going to switch to that?

Some German politicians, especially those close to the conventional energy sector, have proposed that new coal plants be built (Germany has tremendous brown coal reserves), but it is highly unlikely that any such plant will go up, and power firms have completely scrapped all plans for carbon capture and storage (a.k.a. "clean coal"). Central-station coal plants would also be just as inflexible – and hence incompatible with intermittent renewable power – as central nuclear plants are (see above). Given Germany’s ambitious climate targets, the strong push for renewable energy, and constraints for CO2 storage, large investors such as Vattenfall don’t see a future for new coal plants in Germany.

Won’t switching from nuclear to natural gas increase carbon emissions?

Yes, but that’s not all. It will also cut German production of the most radioactive nuclear waste.

But if you are concerned about climate change and support the Kyoto protocol, you will have to admit that Germany actually has the right to increase its carbon emissions since it completely blew past its Kyoto target of a 21 percent reduction. In August, the German Environmental Ministry reported that the country had actually reduced its emissions by 28.7 percent. Renewables have been indispensable in reaching that goal.

If you are worried about carbon emissions, no industrial country had a more ambitious target than Germany, lots of countries (like the US) did not sign on to the Kyoto Protocol at all, and almost all of those who did missed their targets (like Canada).

Aren't renewables a relatively expensive way to lower carbon emissions?

If you want to compare apples and oranges, yes. It is often claimed, for instance, that insulation is a much cheaper way. But even if we insulate our homes better (which, incidentally, Germany also already does better than anyone else), we still have to decide how we are going to make electricity.

You see, offsetting carbon emissions is a side effect of renewable energy, not the main purpose. The main purpose is to provide us with energy.

Aren't renewables raising the cost of power in Germany, and isn't nuclear cheap?

A qualified yes to the first part, a qualified no to the second. Decades-old nuclear plants (built with heavy subsidies and governmental support) do indeed produce quite inexpensive power, but all estimates are that the cost of building a nuclear plant today without heavy subsidies would be prohibitive. The only plants currently under construction in the EU (in France and Finland) are both behind schedule and far over budget.

In the US, Wall Street has turned its back on financing risky nuclear power. Only the massive subsidy of $8.33 billion in conditional federal loan guarantees keeps Southern Company’s dream alive to build two additional reactors at Plant Vogtle in Georgia. Vogtle, however, has a history that should trouble taxpayers. The original two reactors at the Georgia site took almost 15 years to build, came in 1,200 percent over budget and resulted in the largest rate hike at the time in Georgia.

But yes, green power has raised the retail rate in Germany. For the past two years, the surcharge has been roughly 0.035 euros per kilowatt-hour – around 12 percent of the retail rate. An overwhelming majority of the German public are perfectly happy with that price according to recent surveys. (Germans also pay 25 dollars for dinner in a nice restaurant when they could have had supper for six bucks at a fast food joint; they have no problem paying for quality.)

And while the retail power rate in Germany is almost twice as great as in France, industrial power prices are basically the same in both countries. Compare, for instance, the monthly, quarterly, and yearly derivative power prices in the two countries on this exchange.

One reason for the discrepancy between retail and industry power prices is that 250 of Germany's largest power-consuming companies are practically exempt from the surcharge to cover renewables. And then there is the merit-order effect of renewables – green power is actually pushing down the cost of electricity on power exchanges by keeping relatively expensive reserve plants offline. It is estimated that solar alone reduced the price of power on the exchange by 10 percent in 2011. Ironically, the greater the merit-order effect, the higher the surcharge for renewable power rises in Germany because of the way that surcharge is calculated – but now we are truly getting technical.

The main thing for Americans to understand is that these costs were incurred when solar in particular was expensive. Since 2006, photovoltaics has become nearly 60 percent cheaper in Germany thanks to feed-in tariffs. Strangely enough, solar is now far less expensive in cloudy Germany than it is in the US. According to one recent estimate, an installed watt of PV cost less than one-half ($2.80) as much in Germany in the third quarter of 2011 as it did in the US ($5.20).

If the US were to implement feed-in tariffs and begin ramping up renewables seriously, Americans could bring down the cost of solar to German levels and benefit from the work Germany has done in cutting the cost of renewable power. In other words, it would be even cheaper for the US to move toward solar power while reaping similar benefits as Germany: clean energy and new jobs.

Anything else we need to know about Germany's switch from nuclear to renewables?

Yes. Germany is replacing central-station plants that can only be run by large corporations with truly distributed renewable power. While Germany's Big Four utilities make up around three quarters of total power generation, they only own seven percent of green power. Roughly three quarters of renewable power investments have been made by individuals, communities, farmers, and small and midsize enterprises.

A small-town energy revolution is going on in Germany, with more than 100 rural communities becoming 100% renewable. More people work today in Germany’s renewable sector than in the country’s nuclear and coal industry combined. These are not only new green jobs, but also blue-collar jobs in very traditional industrial areas, such as steel, glass and ceramics. Even worn down shipyard areas in northern Germany are revitalized thanks to the offshore wind industry. So one reason why Germans might not mind paying a little more for green power is that they largely pay that money back to their communities and themselves, not to corporations.

The US is slowly switching to renewables, but it is nearly completely shutting out the little guy, with only two percent of installed wind power capacity not owned by giant corporations. And when it comes to solar in the US, almost everything is utility-scale plants. The changes in Germany are driven by the little guy, whereas the renewable industry in the US is controlled by some of the world’s biggest multinational companies. (Craig Morris)

This article was written for the Heinrich Boell Foundation North-America .

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10 Comments on "The German switch from nuclear to renewables – myths and facts "

  1. scotto - 14.07.2013, 09:52 Uhr (Report comment)

    Nice article but with a little bug: The "estimated" link in:
    "In 2010, researchers from Germany’s Fraunhofer estimated that the German gas network has a storage capacity equivalent to more than four months of German power consumption"
    doesn't point to that important study. Can this be fixed?

  2. Craig Morris - 13.11.2012, 11:22 Uhr (Report comment)

    Malcolm,
    No, that's not what I say. I say a simple fact: Germany overshot its carbon emissions target for the Kyoto protocol, so it can legally increase them. If you disagree with that, then you disagree with the Kyoto Protocol.
    Your time would be better spent focusing on the myriad of countries that did not sign on to Kyoto or did not meet their targets, don't you think?

  3. Malcolm - 13.11.2012, 11:18 Uhr (Report comment)

    Extraordinary paper - it argues that Germany 'has the right' to increase its greenhouse gas emissions as a price for phasing out nuclear power and using more gas as aresult. But German greenhouse gas emissions are already over 30% higher than the EU averege, more than double the global average. If the Green Political Foundation is so blase about climate change what chance does the planet have? Where have these people been over the last decade?

  4. Robert - 08.07.2012, 16:13 Uhr (Report comment)

    It is said that coal power is slow in adapting to changing energy provided by renewables. Actually coal power plants are build in this way, because they newer had to adapt to changing energy needs. Since this is changing, engineers are thinking how to change that.
    This is an article on this topic. I´m sure there is more research. http://www.dradio.de/dlf/sendungen/forschak/1649820/ (in german)

  5. Craig Morris - 24.03.2012, 13:06 Uhr (Report comment)

    Matt, you are quite right about the food comparison with France (and indeed, with southern Europe), but with "Geiz ist geil" we are again mixing up sectors – home electronics and gastronomy.
    But anecdotally, I have the very strong impression as an American living in Germany that Americans just look at the price tag, whereas Germans look at the price tag and the quality they are getting. For instance, German cars are actually scaled down for the US market so they can be sold more cheaply, as I once blogged here: http://notesfromotherside.blogspot.de/2011/01/purchasing-power-usa-vs-d.html.
    More to the point, renewables is an excellent example. Americans mainly want their electricity to be cheap, whereas an overwhelming majority of Germans want their electricity to be clean – and they are willing to pay extra. There is no majority of Americans for more expensive, cleaner power.

  6. Matt - 23.03.2012, 19:35 Uhr (Report comment)

    Great article! Though, a few things are not so true: Germans DO NOT really prefer quality over price. The Geiz-ist-geil-mentality (greed is awesome) is still more than common. People e. g. buy cheap, factory-farmed meat in masses. You actually mixed that up with France. There, people buy quality food. Here, people prefer unhealthy, cheap food but expensive houses and cars over quality food. An even bigger faulty assumption is that Germany had reduced its emissions. In reality, we've just exported them to China (industry), Brazil (meat, milk and egg industry), Indonesia (palmoil) and other countries that have not signed the Kyoto protocoll.

  7. Craig Morris - 20.03.2012, 10:24 Uhr (Report comment)

    SD,
    You apparently did not read the entire article, for I write "green power is actually pushing down the cost of electricity on power exchanges by keeping relatively expensive reserve plants offline."
    A surcharge is tacked onto the retail rate to cover the cost of renewables, so renewables have definitely raised the retail rate in Germany.
    And as I discussed here:
    http://www.renewablesinternational.net/the-afternoon-dip/150/537/33320/
    The peak rate has plummeted, but the base rate has doubled over the past few years, probably because it costs money to keep all of that generating capacity on reserve.

  8. _sd_ - 20.03.2012, 10:19 Uhr (Report comment)

    You say that renewables have increased the price of German electricity ? My sources (small sample below) say the opposite, that renewables are displacing expensive peaking power plants role on the energy grid, reducing the cost of electricity by 7.8 Euros (about $10.50) per megawatt-hour. The German grid operators readily acknowledge this.

    http://cleantechnica.com/2012/02/29/how-german-solar-has-made-all-german-electricity-cheaper/ http://isi.fraunhofer.de/isi-media/docs/e-x/working-papers-sustainability-and-innovation/merit-order-effect.pdf http://cleantechnica.com/2012/03/01/german-utilities-fight-solars-cost-cutting-merit-order-effect/

  9. Renouv - 17.03.2012, 14:11 Uhr (Report comment)

    Renewables in France (hum!), Germany ... Europe 2000-2010
    http://energeia.voila.net/renouv/electri_renouv_fr_de.htm
    (in french)

  10. QuasiPhoto - 10.03.2012, 02:43 Uhr (Report comment)

    Nukes can ramp Craig. Aircraft Carriers and Submarines ramp their reactors every day. We could design civilian nukes to ramp but the economics are unfavourable.

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