Germany goes green, prepares for post-nuclear world

Some of the oldest nuclear plants are expected to be closed completely in the near future

In the early 1990s, the German company made a bet on the renewable energy sector and started to manufacture compressors for the emerging biogas industry. Jarg-Peter Mehrer, whose family has run the business for five generations, says he believes he made the right move — especially after Chancellor Angela Merkel announced a safety review of Germany’s nuclear industry last month, in light of the disaster in Japan.

“This is a market that keeps expanding,” Mehrer, the company’s managing director, said of the renewable field. “The government’s decision is very positive.” Mehrer, which was exhibiting its products at the Hanover International Trade Fair last week, is but one of many companies, large and small, that are seeking an opportunity in what may turn out to be a significant reordering of energy sources in Germany, which has the largest economy in Europe.

The scene highlighted the different paths European countries have been taking toward energy security. While some of Germany’s neighbours, like nuclear-dependent France, home to the giant nuclear contractor Areva, criticise Merkel for what they call an exaggerated, knee-jerk reaction, Germans seem determined to move toward a postnuclear economy — even though they concede the switch will be expensive.

Many companies at the exhibition said that they had begun to position themselves in the market more than a decade ago, even before the former left-leaning government passed a law in 2002 to close all the country’s nuclear plants by 2022.

Merkel, a conservative being pushed by her pro-business coalition partner, reversed that decision last year by agreeing to keep the nuclear plants operating well into the 2030s.
She argued that it would serve as a ‘bridge technology’ until the renewable sector was sufficiently developed. Nuclear energy supplies 22.3 per cent of Germany’s electricity. Coal provides 42 per cent, natural gas 13.6 per cent and renewable energies 16.5 per cent, according to the environment ministry.

The change, however, caused confusion among companies and gave the opposition Green Party, long opposed to nuclear power, a new sense of purpose. The disaster last month in Japan reignited the debate, which has already reached a level of intensity not seen in any other European country.

In response, Merkel ordered 7 of the 17 nuclear plants closed for three months while the remainder underwent stringent security checks. Some of the oldest plants are expected to be closed completely, regardless of the outcome of the inspections.

But that measure was not enough to prevent her conservative Christian Democratic Union from losing power last month in Baden-Warttemberg, a wealthy southwestern state it had led for 58 years. Instead, the once-negligible Greens emerged triumphant and will lead a state government for the first time anywhere in the country. In part, that reflected the deeply ingrained respect for the environment that transcends political divides in Germany.

Yet such a revolution is even more telling in a state where many of the Mittelstand companies are based. These small and midsize family businesses, like Mehrer, are the backbone of the country’s export-dependent economy.

Sebastian Sax, a project manager at Schneider Electric, the French electrical systems company, said Merkel’s decision was good for his company, too. “We focus so much on energy efficiency,” he said. “It’s something we have been doing for many years.” ABB, a Swedish engineering company that has a large presence in Germany, was also enthusiastic.

Good news

“Closing nuclear power plants is good news for ABB,” said Ake Andersson, technical manager of a motor division at the company. “This is about developing ways to use energy more efficiently.”

He was demonstrating a new motor designed to reduce the loss of energy in rotary blades used in motors. “Sixty-five per cent of all energy used by industry is taken up by motors,” he said. Support is not universal. Big companies in the nuclear energy sector, like Siemens, which built all of Germany’s nuclear power plants, and RWE have balked at Merkel’s turnaround.

Imports of electricity from France and the Czech Republic — both fans of nuclear energy — had already doubled in recent weeks because of the temporary closing of the seven plants. Even the most enthusiastic supporters of renewable energy acknowledge that the move away from nuclear power will be costly, at least in the short term.
“Of course we are pleased with the government’s decision over nuclear power,” said Christian Albrink, regional division chief of Soleg, a German company that plans and sells solar energy systems and plants. “But we have to keep a very clear head. We need clear thinking about how Germany will phase out nuclear power.”
Albrink said that an energy mix of wind, biomass and solar power could be developed. “But what are needed are more storage facilities for this kind of energy,” he said. “This is a big challenge.”

Experts say substantial investments in ‘smart grids’, so as to establish an integrated high-technology energy network, are also needed, as well as a much greater push toward conservation.

Joachim Schneider, vice president of the Association of Electrical, Electronic and Information Technologies, said that building 3,600 kilometers of grids would cost 13 billion euros to 21 billion euros.

Renovation of the housing stock would be costly, too. Friedhelm Loh, president of the German Electrical and Electronic Manufacturers’ Association, said it would be more efficient and would use less energy over the long term to install ‘smart’ systems in private households. Those systems would give them access to locally generated power from renewable sources, rather than being fed from big centralised plants. But that could cost 50,000 euros a home, he said in Hanover.

In a report published to coincide with the trade fair, a top German research institute, Fraunhofer, estimated that for Germany to have its electricity supplied entirely from renewable sources by 2050, the country would have to spend 15 billion euros a year for 15 years — a lot of money but still a small fraction of its gross domestic product. Jargen Schmidt, the director of Fraunhofer’s solar energy wing in Kassel, said he believed the investment would pay off over the long term because of substantial savings in energy efficiency and consumption.

Indeed, even companies like RWE and Siemens that are heavily invested in nuclear energy are hedging their bets.

“Of course, nuclear energy is very important for us,” said Manfred Lang, an RWE spokesman. “But we are increasingly active in the renewable energy sector, particularly looking at ways to store sun and wind energy.”

Siemens, which is seeking a cooperation agreement with Rosatom, the Russian state nuclear power plant manufacturer, was in Hanover showing off its electric cars and all things green.