NEI Nuclear Notes Update Germany and the Cost of Moving Fast

Germany and the Cost of Moving Fast

by Mark Flanagan

We promise not to beat the horse until it starts beating us – and we’re probably close to that point – but say, how is that shift to renewable energy going in Germany?

The country’s third-largest aluminum producer, Voerde Aluminium GmbH, filed for bankruptcy amidst trade groups advocating affordable power. Ulrich Grillo, president of Germany’s non-ferrous metals association, views Voerde Aluminium’s insolvency as proof that the metal manufacturing industry in Germany is endangered by high electricity costs, which are no longer competitive on the international level.

By point of comparison:

Electricity prices for industrial use are 41.7 percent lower in France than in Germany. If similar inefficiencies begin to surface in steel and other critical manufacturing industries, the impact on the German economy will be significant.

Let’s be fair: Germany generated (in 2010) about the same amount of electricity via nuclear energy – about 22 percent – as the United States does and half the nuclear plants there are still chugging along until 2022. Germany gets about 43 percent of generation from coal. It’s move to renewable energy is meant to impact the coal percentage as well as get nuclear to zero. What’s hurting here the impact that move is having on ratepayers and, obviously, the industrial sector.

In an interview with Uranium Investing News, Edward Kee, vice president of NERA Economic Consulting, offered his opinion on the current policy dynamics, commenting, “before all German nuclear plants are permanently closed, the policy will shift and some of these nuclear power plants will remain in service. However, this view is based on fundamental economics and not by the less-predictable politics.”

Anyone can say anything, of course, but that doesn’t mean we can’t like some of what they say – NERA doesn’t seem to have any particular ideological or pro-nuclear inclination, so it’s just making an economic assessment. We’ll see in a decade or so how that works out.