Friday, August 26, 2011

German Power (Not)

From the Economist:
Electricity producers in Germany are in disarray. The cause of the chaos is the government: in June it decided to shut all the country’s nuclear power stations by 2022, after Japan’s struggles to contain radiation leaks from its reactors following an earthquake and tsunami in March.

A study commissioned by the economics ministry has estimated the cost of that decision, in lost jobs and higher energy and carbon prices, at around €32 billion ($46 billion). The government had planned to extend the life of nuclear plants by an average of 12 years.

Other things make matters worse. Germany’s four big electricity generators have too much debt. They are also being forced by the European Commission to spin off their distribution arms to improve competition. The firms are trying to adjust, shrink and extricate themselves from unprofitable foreign ventures and to co-operate more with municipal power-producers. E.ON, Germany’s biggest power company, is threatening to lay off up to 11,000 people.
Told 'ya.


Whitehall said...

The big winner in this decision would be Gazprom.

Germany already imports large quantities of natural gas from Russia. With their failed investments in wind and solar, shutting down their nukes will just increase demand for natural gas and for imported electricity from France (Edf).

BTW, one of E.On's bigger foreign investments is the Ringhals nuclear power station in Sweden. They own 30%. Just heard that they are having major problems with a new turbine they are installing, built in France by Ahlstrom. That will keep one of the units down for a while longer and continue to suck money with no output.

I can foresee the German political system walking back from the nuke shutdown, but slowly and quietly.

Carl said...

I think that if Merkel retains nuclear power, she (and the CDU) lose political power.

Whitehall said...

I imagine that was her party's calculation.