06 September 2010

German Nuclear Power and the Future of Climate Policy

The German government is proposing to extend the life of its nuclear power plants and use the resulting windfall to invest in alternatives to fossil fuels.  The WSJ reports:
Germany's proposal to keep its nuclear reactors running on average 12 years longer than planned will bring in €30 billion ($38.69 billion) in taxes and levies from utility companies, Economics Minister Rainer Brüderle said Monday.

"It's about €30 billion overall. These are large sums that will be directed to the government, toward renewable energy," Mr. Brüderle said in an interview with radio broadcaster Deutschlandfunk. He added that the revenue includes the contributions utilities will be obliged to make toward renewable-energy research and development, and a tax on nuclear fuel rods. The fuel-rod levy, which utilities fought vigorously to avoid, will generate an estimated €2.3 billion annually but will be limited to six years, Mr. Brüderle said.
The German plan is consistent with the proposal that I suggest in The Climate Fix -- tax or otherwise price today's energy supply to invest in tomorrow's energy supply.  India's government has proposed a variant on this theme with a coal tax to be used for clean energy innovation.

Germany's main opposition party opposes the nuclear proposal, according to Der Spiegel:
The new compromise has already been criticized by the opposition and opponents of nuclear energy. Sigmar Gabriel, leader of the center-left Social Democrats, described the agreement as a "black day for energy policy." He said the coalition government, which consists of the conservative Christian Democrats and the business-friendly Free Democrats, had given in to pressure from the big energy companies. As long as old, highly profitable nuclear power plants are still online, they will hinder the development of renewable energy, Gabriel said.
Gabriel does not see nuclear as a renewable technology.  Last year, when he was Germany's environment minister, Gabriel was asked about how Germany would meet its emissions reduction targets, close nuclear power plants and provide for the nation's energy needs. He replied that the answer was . . .  coal power:
Germany’s environment minister Sigmar Gabriel (Social Democratic Party) is pushing for the construction of new coal-fired power plants in Germany. “We need eight to twelve new coal plants if we want to get out of nuclear energy,” Gabriel said on Friday at a meeting of the Mainz-Wiesbaden AG (KMW) in Mainz. With regard to the opponents of the planned coal-fired power in Mainz, the minister said: “Those who demonstrate against coal-fired power will get nuclear power plants instead.” Gabriel said, the decision about which power plants are built is the responsibility of companies and not politics. He added that new coal power plants would not increase carbon dioxide emissions.

First of all, old plants would be closed. In additon, the emissions trading scheme would limit the level of emissions. "You can build 100 coal-fired power plants and don’t have to have higher CO2 emissions," said the environment minister.

Renewable energies would not be able to close the gap in energy supply that will arise due to the shutdown of nuclear power plants by 2020, said Gabriel. Even gas-fired power plants are not a real alternative because their power generation is expensive and thus not competitive for the energy supply of industrial production.
It is unclear if Germany will explicitly debate coal vs. nuclear -- but if Merkel is smart she will, as the political winds are blowing her way.  Regardless, the German proposal is part of a broader trend in energy and climate policies.