Germany’s meltdown over nuclear power risks a costly winter

The cheers that rang out in the town of Grohnde, northern Germany, as the clock approached midnight on December 31 were not all to welcome the new year. About 100 people reportedly gathered in the shadows of its nuclear power plant to celebrate its closure after more than three decades. 

Across the country, nuclear power stations in Gundremmingen and Brokdorf were also shut down as the new year arrived, under Germany’s decades-old plan to phase out the technology. Its remaining three plants are due to close by the end of this year. 

Germany’s anti-nuclear power stance has its roots in Cold War anxieties and environmentalism, with the phase-out agreed in 2000 under then-chancellor Gerard Schroeder.

Efforts to reverse it were blocked following the Fukushima disaster in Japan in 2011, but the plan is coming to fruition at a difficult time. 

Soaring gas prices are pushing up bills for households and businesses around Europe while there is also a struggle to keep a lid on carbon emissions. Both Germany and neighbouring Poland are still burning vast amounts of coal to keep the lights on. 

“It’s absurd,” says Michael Liebreich, energy expert and chairman of Liebreich Associates, of Germany’s nuclear shutdown. “I think it’s an epic, epic mistake. I’ve called it a climate crime.” 

He says closing Poland’s massive Belchatow coal power station faster instead of Germany’s nuclear power plants, would “clearly be magnificently better for the environment - but [the discussion] is completely politically unacceptable”.

The shutdown comes as efforts intensify in Germany and Europe to overhaul economies in a bid to tackle global warming. Europe’s biggest economy wants to hit net zero carbon emissions in 2045, five years faster than the targets for both the EU as the UK. Germany spewed out 810m tonnes in 2019. 

That overhaul will require a massive increase in low carbon electricity, to meet existing needs as well as to power electric cars and heat pumps and make clean hydrogen for factories, as fossil fuels are phased out.

Agora Energiewinde, the German think-tank, points to forecasts that Germany will need about 1,000 terawatt hours of power by 2045, about double Germany’s consumption in 2020.

Weaning Germany off Russian gas

 Countries across Europe are facing the same challenge. But the path for Germany looks particularly fraught given its heavy reliance on coal and refusal to entertain nuclear, either by extending the life of current plants or building new ones. 

The risk of growing reliance on gas, including Russian imports, looms large at a time when the soaring prices are making the risks of that reliance all too clear. 

“Last year we saw the strongest increase in Germany's climate ambitions so far. But the gap between ambition and targets and the measures that are in place is larger than ever,” says Simon Müller, director for Germany at Agora Energiewende.

“We need a massive scale up of renewable energy to decarbonise the power and other sectors.”

Nuclear power supplied about 12pc of Germany’s electricity last year, while lignite coal supplied about 19pc and hard coal 9.3pc.

Following nuclear’s shutdown this year, Germany is set to stop using coal-fired power by 2038 at the latest. The new coalition government, led by the Social Democrats’ Olaf Scholz, says “ideally” it wants to close it earlier, in 2030. 

Politicians want to fill that gap with a massive ramp-up of renewable power.

Solar, wind, and hydropower accounted for about a third of German power production in 2021, with renewables generating 41pc once biomass is included. Politicians want this to hit 80pc by 2030, even as demand for electricity rises by a third.

Under the three-way coalition deal signed in December between the centre-left Social Democrats, the Greens and fiscally more conservative, libertarian Free Democrats, Germany wants to quadruple solar panel capacity, treble offshore wind capacity and increase onshore wind capacity by about 70pc within the decade. 

That will be challenging. Progress on wind turbine installation was slow last year, with obstacles including building the cables to transport electricity from the windy north to the energy-hungry south and west, and overcoming bureaucracy and local resistance. 

The coalition agreement includes plans to make solar panels mandatory on new commercial buildings, and give over 2pc of Germany’s land mass to wind turbines. Nearby communities should “profit appropriately”, it adds. 

Efforts should “lead to more intensive cooperation with the communities on the ground,” says Maria Pastukhova, senior policy adviser in the Berlin office of E3G, the environmental think-tank.  

Despite efforts to cut carbon emissions, Germany plans to rely on gas-fired power stations to help pick up gaps in renewables as the system is overhauled. Experts estimate up to 44 gigawatts of new gas-fired capacity could be needed by 2035 to help meet this need.

Hydrogen's holy grail

Politicians insist using natural gas will not be a permanent measure. Gas-fired power plants and pipelines will need to be ready to run on hydrogen instead, which does not produce carbon emissions when burned, ahead of an expected massive ramp-up of hydrogen produced using renewable electricity.   

Germany is investing heavily to try to ensure that increasing hydrogen production does happen. About €8bn is being poured into more than 60 hydrogen projects, of which about €2bn will go to help steelmakers make the shift to create demand. 

It comes as carbon-border taxes are being planned in Europe to help industry remain competitive despite the costs of converting operations. Experts hope being green will also be a competitive boost in itself. 

“I think there is an aim to differentiate the market,” says Hauke Hermann, senior researcher in Oeko-Institut Institute's energy and climate division in Berlin. “We might not compete with Chinese steel mass production, but if we produce high-quality green steel in Europe, we have a competitive edge.”

Agora EnergieWinde estimates that about 36pc of Germany’s hydrogen production in 2045 will be produced domestically, with the rest imported.

Countries such as Morocco, Chile and Australia are expected to be strong producers due to their abundant renewable energy capabilities. Germany is also forging hydrogen ties with Ukraine. 

There is no guarantee of the hydrogen economy emerging in Germany or elsewhere, however.

“The question is what happens if the hopes for scaling and commercialising the hydrogen on the scale needed does not materialise,” says Pastukhova. “You end up with lots of hydrogen-ready capacity but no hydrogen to use. You need a back-up plan.”

Meanwhile, the risks of relying on natural gas in the meantime are on stark display.

Soaring energy bills amid global constraints on gas supply have helped push inflation in Germany to hit 5.3pc in December, the highest rate since June 1992. Experts expect power costs in Germany to remain high in 2022. 

Christian Linder, the finance minister, indicated that the Government is considering taking action to help households pay for heating over winter. “We have to do something,” he told a gathering of his Free Democratic party in Stuttgart. 

Industries across Europe are also feeling the pain, and are calling on European officials to act, with several companies forced to curb operations. The high prices are also slowing down the necessary investment in gas-fired power stations including hydrogen readiness.

Germany produces only about 5pc of its gas domestically, and is heavily reliant on gas from Russia, which has been accused of using the crisis to exert pressure on Germany to start up its new Nord Stream 2 natural gas pipeline under the Baltic Sea.

Gerhard Schroder, the German chancellor who led the plans to phase out nuclear power in Germany, controversially went on to take up senior roles in Russia’s energy industry and chairs the shareholders committee of Nord Stream 2. 

Backing the pipeline in February 2021, he said  it was “clear that we should place our bet on renewable sources” but added that there “won’t be enough of them in the foreseeable future to provide our economy with energy at an affordable price”.

In this climate, there are signs that public opinion on nuclear power is shifting slightly.

A poll in December found 31pc of Germans favoured keeping nuclear power if it would help stabilise pricing, according to reports.

In October, 25 leading scientists and environmentalists from Germany and abroad wrote to Die Welt newspaper, stressing the country was on course to miss its climate targets.

A rethink seems unlikely, however.

“The nuclear shutdown is the reason for the successful renewable expansion in the early years of the energy transition,” argues Muller, at Agora Energiewinde.

“I think you'd struggle to find another decision that enjoyed such broad political support as this decision [after Fukushima] to reinstate the nuclear phase-out.”