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Germany's Nuclear Ban: The Global Effect

Germany's plan to shut all of its nuclear power plants within the next 11 years will send waves -- not ripples -- through the energy industry and the offices of policymakers throughout the world. In short, Germany's nuclear ban is a global game-changer.

The plan, created in the aftermath of the Japan's Fukushima nuclear disaster, calls for all 17 of Germany's reactors to be phased out by 2022. The energy void left behind is massive. Nuclear energy generates 23 percent of Germany's electricity. What will fill the gap? More fossil fuels, imports and renewables.

In the short term ...
Eleven years to replace an energy source that provides nearly a quarter of its electricity is no small feat. It's particularly difficult for Germany because it must adhere to European CO2 emissions caps. Meaning Germany has to find a low-carbon source of energy.

In the short term, Germany, most likely will import nuclear power from France and the Czech Republic. This will place pressure on the existing nuclear power supply and drive up costs as a result. Consumers will feel the pinch. For big industrial companies, it will feel more like a punch.

Renewable markets
Germany is already a world leader in renewable energy. Today, renewable energy provides about 13 percent of Germany's power. By 2020, it wants renewable sources to provide 35 percent of its electricity.

To be clear, it will take a massive effort to reach that goal. And the global stakes are high. If Germany is successful, other countries have follow its lead. If it fails, governments that have been slow to embrace renewable energy will use Germany's problems as a reason to backpedal from the source altogether.

To reach that goal, there will have to be breakthroughs in solar as well as storage technology. The nuclear ban could very well accelerate these kinds of breakthroughs. More companies, recognizing the opportunity, will enter the market and existing renewable energy businesses will expand.

Germany's nuclear ban will add about 25 million metric tons of CO2 emissions a year. And since Germany is subject to a cap, it will have to find some way to offset the increase in CO2 emissions.

The easiest solution is to buy nuclear power from other countries, as I mentioned above. But it's not a great and it certainly won't work over the long haul. So, Germany also will have to ramp up renewable and replace more of its coal-fired power plant with natural gas. The upshot? Without low-carbon nuclear energy, Germany will be using more fossil fuels at least for a few years.

And that's not good news for the world. The International Energy Agency reported Monday that global CO2 emissions in 2010 were the highest in history.

Other countries in the mix

Germany isn't the only country backpedaling on nuclear power. The Swiss government announced it will phase out its existing nuclear plants and seek out alternative energy sources. The country's five plants generate about 40 percent of its electricity. The rest comes from more than 1,000 hydropower plants.

The impact: The transition is expected to be far slower than Germany's, which should allow Switzerland time to add renewable energy and more hydro power. However, unless the country moves aggressively it will still rely on energy imports.

Japan also has ditched plans to build 14 more reactors. The power capacity lost by retiring old plants and canceling the 14 new ones would be about 399 billion kilowatt-hours by 2030, according to the Breakthrough Institute. To replace that lost generation would require a nearly 49-fold increase in electricity generated by wind, solar and geothermal.

The impact: Japan is left with imported coal, liquefied natural gas (LNG) and renewable energy for its power needs. But in all likelihood Japan will rely primarily on imported coal and LNG, two options that will increase emissions. Renewable energy will ramp up, but the obstacles are too numerous to allow it to completely replace the lost nuclear power capacity.

Photo from Flickr user bagalute, CC 2.0


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