Nuclear comeback

A massive solar power project in the deserts of North Africa supported by German industry and plans to build some forty offshore wind parks off Germany's Baltic and North Sea coast are among the ambitious schemes that have bolstered Germany's reputation as one of the world's leaders in renewable energy.

But industry representatives warn that cutting-edge developments like these could be jeopardized by a reprieve for nuclear power.

Germany currently has 17 operational nuclear power plants in total. The eight oldest reactors are due to be taken offline over the next five years, according to legislation first enacted under Chancellor Gerhard Schroeder's government in the late 1990s.

The rest had been due to be phased out by 2020. In the new coalition between the Free Democratic Party and the Christian Democrats, the government's policy roadmap says "safe atomic power plants" should remain in operation "indefinitely" after the original phase-out date, although no new law has yet been passed that would mark an official end to the previous nuclear exit strategy.

Investment may dry up

"This will put the brakes on people's willingness to invest in renewable energy," said Daniel Kluge, spokesman for the German Renewable Energy Federation (BEE). "Up to now investment has been mainly spurred on by the recognition of a need for new sources of electricity following the phase-out of nuclear power."

Both the BEE and the German Wind Energy Federation (BWE) believe that, as well as deterring new investors, the country's Big Four energy producers, RWE, E.ON, Vattenfall and EnBW, will also have little incentive to expand their renewable energy production if nuclear power is not phased out. The four firms currently produce some 87 percent of Germany's electricity, and all of them operate nuclear power plants.

"This will cement monopolies and endanger jobs, as well as a top export," Hermann Albers, BWE head, told the Landeszeitung Lueneburg newspaper.

Currently, 280,000 Germans work in the renewable energy sector, a number that is projected to rise to 500,000 by 2020. Albers is worried that those jobs and Germany's position as global market leader could be at risk.

"Supplying the electricity markets with power from amortized atomic power plants is clearly more profitable than investing in technologically unchartered waters such as wind energy out at sea," said Albers.

Renewable and nuclear co-existence

But energy expert Manuel Frondel argues that ongoing government subsidies for renewable energy continue to make green investment an attractive proposition - for big and small fish alike.

For example, homeowners who have installed solar photovoltaic panels on their roofs this year will receive 43 cents per kilowatt hour for the next 20 years.

Existing suppliers of wind energy are guaranteed a fixed price of 15 cents per kilowatt hour over the same period - three times as much as for electricity from conventional sources.

"Politicians want to have a lot of these wind parks built and the electricity suppliers have massive incentives to do this. Aside from the natural volatility of wind power, wind parks are a secure source of income," said Frondel, head of the energy and resources department at the economic research institute RWI Essen.

With half of Germany's coal-powered stations due to go offline in the next ten years, Claudia Kemfert, of the Berlin-based German Institute for Economic Research (DIW), sees atomic energy as plugging this gap rather than stymieing the chances of renewable energy.

"I think it is better to extend the life of nuclear power stations rather than building new coal powered stations."

More details needed

The energy expert believes extending the life of Germany's nuclear power plants will even have a positive impact on the renewable sector. "Shares of the profits from nuclear power will be used to fund the Renewable Energy Law," said Kemfert. "The amount has not been laid down yet."

Hubertus Bardt of the IDW economic think tank in Cologne also sees nuclear power as a "bridging technology."

With nuclear power currently accounting for approximately 20 percent of Germany's energy needs and renewable energy some 15-17 percent, he believes that there is enough room in the energy market that nuclear and renewable energy are unlikely to come into direct conflict.

"If the government was adopting the French model than this would clearly be an obstacle for renewable energy, but this is not the case," said Bardt. About 80 percent of all power produced in France comes from nuclear reactors.

However, BEE spokesman Kluge is wary and critical of the vagueness of the government U-turn.

Kluge called on the government to flesh out their proposals as soon as possible so that the renewable energy sector and potential investors know exactly what kind of demand would exist in the future.

Author: Julie Gregson
Editor: Brett Neely