Fear's Price Tag The High Price of Merkel's Nuclear About-Face

Chancellor Angela Merkel's decision to temporarily shut down seven nuclear reactors could cost the industry more than a half-billion euros and result in Germany not meeting its CO2 emission reduction goals. The rest of the world is taking a wait-and-see approach.

The nuclear power plant at Biblis is to be temporarily shut down -- one of seven plants affected by the emergency moratorium announced by Chancellor Angela Merkel on Tuesday.

The nuclear power plant at Biblis is to be temporarily shut down -- one of seven plants affected by the emergency moratorium announced by Chancellor Angela Merkel on Tuesday.

First, German Chancellor Angela Merkel announced a three-month moratorium on her government's plan to extend the lifespans of German nuclear power plants. Now, the chancellor has elected to shut down seven of the country's oldest reactors. At least one of them is to remain offline permanently.

"Safety is the priority," Merkel said in her announcement on Tuesday. "Those are the criteria by which we acted today."

The move is likely to be an expensive one. According to an estimate produced for SPIEGEL ONLINE by atomic energy expert Wolfgang Pfaffenberger from Jacobs University in Bremen, Germany's energy companies stand to lose up to €575 million ($803 million) as a result of the three-month shutdown. The seven reactors affected -- all of which were constructed prior to 1980 -- generate revenues estimated at €2.3 billion per year.

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What that might mean for energy prices in Germany remains unclear. Manuel Frondel, an energy expert with the Rhineland-Westphalia Institute for Economic Research, told the mass-circulation tabloid Bild that consumers may be in for a price increase of up to 10 percent or more.

The German Association of Energy and Water Industries agrees. The group issued a statement on Tuesday saying "when a cheap energy source is phased out more rapidly (than planned), the prices will also climb to a greater degree than expected."

Can Germany Meet Its CO2 Reduction Goals?

Sigmar Gabriel, head of the opposition Social Democrats, fears that Merkel's moratorium could also be expensive for German taxpayers and accused her of making a deal with the country's nuclear power industry. Legally, he said, Germany's reactor operators can demand compensation from Berlin given that the plants are not at accute risk. While Gabriel allowed that the plants likely wouldn't demand such compensation, he said "they will certainly demand recompense for waiving their rights."

Merkel's decision marks a notable about-face for the German chancellor with the conservative Christian Democrats, whose government just last autumn agreed to suspend the nuclear phase-out pushed through by her predecessor in the Chancellery, Gerhard Schröder of the center-left Social Democrats. But Germans, historically nervous about nuclear energy technology, have reacted with fear and concern to the increasingly grim news from Japan, where workers continue trying to avert a complete nuclear meltdown at several reactors belonging to the Fukushima I plant on the country's east coast.

Last autumn, Merkel argued that Germany's nuclear reactors would have to remain online longer to provide a bridge to an era when renewable energies could provide a larger share of the country's energy needs. Her government also intended to use some of additional profits earned by the reactors as a result of the lifespan extensions to fund renewable energy development.

It was also, of course, intended to ensure that Germany met its goal of reducing its emissions of CO2 by 40 percent by 2020 relative to 1990 levels. But should the shutdowns become permanent -- and many assume that they might -- the elimination of 43.6 terawatt hours of annual energy production (the country's consumption was 544.5 terawatt hours in 2008) would mean a greater reliance on coal and natural gas fueled power plants. In addition to emitting more CO2, increased dependency on fossil fuels would also drive up the costs of CO2 emissions certificates, placing further upward pressure on energy prices in the country.

Germany isn't the only country now taking a closer look at atomic energy safety. The European Union on Tuesday agreed to carry out stress tests on all 143 nuclear plants in the bloc. EU energy ministers met in Brussels on Tuesday together with nuclear regulators and industry representatives and said that the tests will be devised in the coming months and applied later this year. Those plants which fail the tests, EU Energy Commissioner Günther Oettinger hopes, will have to be switched off.

Tamping Down the Nuclear Renaissance

"We have to ask ourselves: Can we in Europe, within time, secure our energy needs without nuclear power plants?" Oettinger said on the German public television channel ARD. In reference to the tests, he added: "The authority of the tests must be so high that those responsible will have to live by the consequences."

The issue of nuclear safety is likewise expected to be high on the agenda of the G-20 summit in France at the end of March and at a EU summit in Brussels next week.

Still, it seems unlikely that many countries will follow Germany's precipitate retreat from nuclear power. France, which covers 80 percent of its energy needs with nuclear power, insists that its facilities are safe. French President Nicolas Sarkozy reportedly told senior members of his UMP party that "if we have lost some bids, this is because we are more expensive. And if we are more expensive, this is because we are the safest." Paris did, however, order safety checks on the country's 58 reactors.

Switzerland said it would review existing plans to build new nuclear plants to replace aging facilities and countries have likewise announced safety checks. But Turkey said it would go ahead with plans to build the country's first nuclear reactor with Russian assistance. Moscow also signed a deal with Belarus on Tuesday for the construction of a nuclear power plant there.

Experts in the US expect the Japan disaster to slow a gathering trend toward nuclear renewal there. "This accident has the potential to tamp down any nuclear renaissance that we're poised to experience," Tim Echols, a pro-nuclear utilities official in the state of Georgia, told the Associated Press.

In Germany, meanwhile, it remains unclear what the future of nuclear energy in the country might be once the three-month moratorium expires. Merkel, for her part, had little to say on the subject on Tuesday. "What might follow the moratorium," she said on Tuesday, "will become clear at its end."

cgh -- with wire reports


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