In a dramatic about-face, Chancellor Angela Merkel announced on Monday that Germany will phase out nuclear power completely by 2022, shutting down its nine operational reactors and never restarting the seven reactors that were suspended in the wake of the nuclear disaster at Japan’s Fukushima Daiichi plant.
Germany has struggled with a conflicted yet essential relationship with nuclear power from the start. West Germany built its first nuclear power plant in 1960; since then, the country has come to rely on nuclear reactors for more than 20% of its power needs. But the industry’s growth has not come without opposition. A 1975 fire at the Lubmin plant on the Baltic Coast almost caused a core meltdown. A few years later, the Green Party formed and quickly became a nationwide political force based on their “Atomkraft? Nein, Danke” (Nuclear Power? No Thanks) slogan.
For the next 20 years, the country battled with nuclear waste, first transporting it to medium-term storage facilities because of protests against building a national waste processing facility, then shipping it to facilities in France and Britain. In the early 2000s, protestors regularly blocked waste transports, creating a tension-filled period that culminated in the death of an anti-nuclear activist.
In this context, the coalition government committed to phasing out nuclear power by the mid-2020s. But six years later, in 2006, Chancellor Merkel said it would be a mistake for Germany to turn off its nuclear power plants. Four years later, she strengthened that stance with a plan to run the country’s nuclear plants for an additional 12 years, until 2033. That law passed in the country’s lower house in October 2010.
Five months later, the massive earthquake and tsunami in Japan crippled the Fukushima Daiichi nuclear plant. The world held its breath for weeks as TEPCO struggled to contain the radiation, restore electricity to the site, and repair cooling systems to prevent major core meltdowns. Anti-nuclear protestors in Germany seized on the catastrophe to push the chancellor to reverse her stance. Within days, Merkel suspended the decision to extend the lifespans of the country’s nuclear plants; she also halted operations at the seven oldest plants, which all started up before 1980, for three months.
Now, after a weekend that saw tens of thousands of Germans demonstrate against nuclear power across the country, Chancellor Merkel has cemented both of those decisions. All of Germany’s nuclear reactors will be permanently mothballed by 2022, a stunning policy reversal. The decision makes Germany the first major industrialized power to turn its back on nuclear power since the Fukushima disaster. Germany has 17 reactors, of which nine are currently operational. The seven non-operational plants are the old reactors taken offline in the wake of Fukushima, and one is the Kruemmel plant in northern Germany, which has been mothballed for years due to technical problems. None of the reactors that are currently offline will be reactivated, and the newer, operational plants will be shut down in 2021 and 2022.
Now Germany will have to find new sources to supply 23% of its power needs, which is the load its nuclear reactors carried in 2010. The Merkel-led coalition government says it plans to push the country to cut power usage by 10% by 2020. It will also promote doubling the use of wind and solar power, so that renewables will provide 35% of the country’s power by the time nuclear goes offline.
Merkel’s change of heart follows from a string of disastrous election results for her Christian Democrats (CDU) and their Free Democrat allies, which have been largely blamed on her unpopular pro-nuclear policy. In March, the Greens won control of a CDU stronghold – the populous state of Baden-Wuerttemberg – in a major blow to Merkel’s credibility as a coalition leader. Last year, her party lost its majority in the Upper House after failing to hold on to another highly populated region, North Rhine-Westphalia.
Germany’s power providers were not pleased with the nuclear decision. “The end (of nuclear power) by 2022 is not the date we had hoped for,” said a spokesman from RWE, Germany’s largest power provider. The company also said it will keep “all legal options open,” in reference to the government’s decision to maintain the newly imposed nuclear fuel tax despite enforcing plant shutdowns. The tax was linked to the extension of reactor lives. RWE and Germany’s other main power provider, E.ON, had been threatening to sue the government over the levy even before the nuclear power shutdown plan was announced. And in a separate case, RWE has already filed litigation challenging Germany’s temporary (now permanent) suspension of the seven old power plants following Fukushima.
The German industry association, BDI, said the exit of nuclear power would push energy prices up and make it more difficult to reach emissions targets, as “the shortfall of nuclear power will have to be compensated by coal and gas power stations.” Merkel, however, says Germany’s goal of reducing greenhouse gas emissions by 40% by 2020 also remains in place.
According to Platts, there are some 13GW of thermal energy capacity, comprising mainly hard coal but some lignite and gas, already under construction in Germany. But four out of nine coal power stations and a lignite unit currently under construction are unlikely to be commissioned as originally scheduled in 2011 and 2012, due to a problem with boiler construction. This fact, along with the planned nuclear shutdowns, is prompting talk that the nuclear plan is untenable because it will leave Germany with insufficient power capacity.
The German decision prompted losses for several major uranium producers on Monday. Cameco (T.CCO), the world’s largest pure uranium producer, lost 3.3% while Uranium One (T.UUU) fell 2.7%. However, we do not expect Germany’s decision to impact the uranium story in the long run.
Germany’s 17 reactors account for just 5% of global demand. By comparison, there are 104 nuclear reactors in the United States and 58 in France. And developed economies are not expected to contribute significantly to uranium demand growth – the developing world will play that role. China has 27 reactors under construction, 50 planned, and another 110 proposed. India has 5 under construction, 18 planned, and 40 proposed. Russia has 10 under construction, 14 planned, and 30 proposed. And so on.
We have said it before and will say it again – the long-term fundamentals for uranium are very strong. Demand growth with outstrip increases in supply in the medium term, as the developing world works frantically to provide its billions of citizens with electricity. The Fukushima disaster, and Germany’s reaction to it, will do little to derail this trajectory.
What Germany’s decision will do, however, is further promote renewable energies. On Monday, solar cell makers Q-Cells SE and Solar World gained 8.5% and 8.8%, while wind turbine maker Nordex advanced 13.3%. Those reactionary gains aren’t sustainable, but in turning its back on nuclear power, Germany has given a lift to solar and wind that will last.
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