By Philip Plickert
Thursday, March 31, 2022
Among the many casualties of the Ukraine war is a
political one in Germany, the country’s Energiewende (energy transformation),
which was launched by Angela Merkel more than a decade ago. Many Germans were
immensely proud of this transformation, which was designed to put Germany in
the forefront of fighting climate change. It involves massive investments in
renewables and the end to nuclear power in Germany. However, Putin’s aggression
has highlighted something that was already obvious: just how fatally vulnerable
this transformation has left Europe’s largest economy.
Simultaneously abandoning nuclear power and phasing out
coal has left Germany more dependent on Russian natural gas than ever
before. More than half of its natural-gas imports come from
Gazprom and other Russian companies. This was the natural, if regrettable,
outcome of the energy policies championed by Chancellor Angela Merkel and her
predecessor Gerhard Schröder.
Germany finds itself now in a situation where it can be
taken hostage by Putin. In response to Western sanctions, Moscow has demanded
this week that EU countries pay for their energy imports from Russia in rubles
— otherwise they would stop by Friday. The EU will not bow to that demand. Brussels claims to have
emergency plans if Russian supplies of natural gas stop, but a sudden stop
would hurt immensely. German industries claim that several hundred thousand jobs are at stake.
Suddenly, Germans are awakening to the brutal
consequences of energy dependency. Some are now asking whether it was a good
idea to abandon nuclear. Elon Musk recently called out that policy decision:
“It is crazy that Germany is switching off all her nuclear plants,” he said in an interview.
Merkel had slowed down the planned phase-out of Germany’s
nuclear power stations introduced by a previous Red-Green government, but in
the wake of the disaster at the nuclear power station in Fukushima in 2011,
Merkel made a U-turn to appease environmentalist voters ahead of regional
elections, arranging for the even faster shutdown of nuclear plants than the
plans laid down by her Red-Green predecessors.
Fourteen of Germany’s 17 nuclear plants have been shut
down now; the Atomausstieg is almost complete. Nuclear’s share
of German electricity generation has fallen from more than 25 percent to a
little over 5 percent. At the end of this year, the last three reactors are set
to close.
German fans of the Energiewende imagined
that the world would see this policy as a shining example and follow suit.
However, no one followed. Germany remains an outlier. Undaunted, the
Greta-Thunberg-admiring nation (the green lobby in Germany is quite strong)
came to accept that it might have been an exception, but it was a positive
exception. In 2019, Merkel’s government agreed that coal-fired electricity plants
should be phased out. Although Germany has now made a massive investment in
renewables, which are heavily subsidized to the tune of more than 25 billion euros per year, these are inherently
volatile (the wind does not always blow, and the sun does not always shine).
Germany has had to fill its energy gap with imported electricity (some of
which, ironically, will have been generated from nuclear or coal-fired sources)
and natural gas.
The amount spent on subsidizing renewables, as alluded to
above, has been enormous. When the first law approving subsidies for renewables
was passed, Jürgen Trittin, the Green minister of the environment at the time,
assured consumers that the costs would be “not more than one scoop of ice cream
per household per month.” In reality, the subsidy — which is reflected in each
consumer’s energy bills — has grown to around 300–400 euros per year per
person.
Although the kilowatt-hour prices for solar and wind
power have declined considerably, the legacy burden of subsidies is great.
According to a study by economists from the University of
Düsseldorf, it will total to more than half a trillion euros over the course of
20 years. The price of electricity in Germany for consumers has increased to
the highest level of almost all developed nations. There
was good reason for the Wall Street Journal to describe Germany’s as “the world’s dumbest energy
policy.”
When Donald Trump blasted Germany’s energy policy and
growing dependence on Russia’s gas (with, of course, the Nord Stream 2 pipeline
in mind) in a speech before the U.N. in 2018, Germany’s foreign
secretary Heiko Maas, a Social Democrat, and his team were seen laughing and
smirking.
Russia’s war in Ukraine has been a brutal wakeup call.
Germany’s new chancellor Olaf Scholz has called it a historical turning point,
a Zeitenwende. Scholz promised more resources for Germany’s armed
forces which have been miserably underfunded and neglected for decades. This
shift was long overdue, and it has come as a shock to some of the more
left-wing members of the governing coalition. That said, there may be less to
the extra 100 billion euros in military spending proposed by Scholz than at
first appeared. A closer look at the small print of the budget reveals
that the money will be spread over several years and that Germany might still
not reach the 2 percent NATO goal.
For all the talk of a Zeitenwende, Scholz
could not commit to stopping Russian energy imports, especially gas. Every
month, Berlin continues to pay billions to Kremlin-controlled companies such as
Gazprom. Since 2014 (when Putin annexed Crimea), Germany has spent more than 170 billion euros on imported energy
products from Russia.
Germany’s dependency on natural gas from Gazprom is so
great that a sudden halt in its flow would trigger a deep economic crisis. As
far as the oil is concerned, there might be alternative supply sources, but
that may well not be the case with natural gas, most of which has been
transported via pipelines from Russia. And even if alternative sources of
supply can be found, does Germany have the infrastructure to accept it?
Germany is trapped, and it’s a problem of its own making.
Chancellor Gerhard Schröder, Merkel’s predecessor and a
close friend of Putin, set the course. In 2005, he signed an agreement with
Putin for the construction of Nord Stream 1, a pipeline under the Baltic Sea
from Russia to Germany. It entered into operation in 2011. Merkel also
misjudged Putin and pushed ahead with the plans for Nord Stream 2 despite
warnings and opposition from the U.S. and various Eastern European states.
Since Schröder left office in 2005, he has transformed
openly into an agent for Russian oil and gas interests, holding positions at
Gazprom and as a member of the board of Rosneft and Gazprom subsidiary Nord
Stream 2, making millions from his connections with the Kremlin’s energy
giants. His political party, the SPD, for many years turned a blind eye to this
and only recently called on him to stop.
A good starting point for sorting out Germany’s energy
mess would be to extend the running time of its remaining nuclear plants. The
country is not only hostage to Putin’s gas, but also to green ideology. “Atomkraft,
nein Danke!” reads the slogan on posters at demonstrations and millions of
car stickers seen all around the country since the late 1970s. The repudiation
of nuclear energy is central to the political and emotional identity of
Germany’s Greens – and not just the Greens. Many German voters, regardless of
their political complexion, are hostile to nuclear power.
By contrast, in a number of European countries there are
signs of a nuclear renaissance. Reversing an earlier plan to reduce France’s
use of nuclear power, President Emmanuel Macron has announced plans for the
construction of up to 14 new plants (nuclear power supplies around 70 percent of France’s electricity). In the U.K.,
Prime Minister Boris Johnson is targeting an increase in nuclear’s share of the U.K.’s
energy supply to 25 percent over the longer term. Belgium has recently revised its plan for abandoning nuclear
power. Existing plants (which were due to be phased out by 2025) will have
their lives extended by ten more years.
In Germany, however, such moves would be taboo for the
Greens and the Social Democrats (the government is a coalition between the
Social Democrats, the Greens, and the classically liberal FDP). And the FDP is
not prepared to break ranks by calling for a revision of the Atomausstieg.
Neither is the center-right opposition, the Christian Democrats, Merkel’s
party, which is only starting to recover from the electoral disaster they went
through last year.
Vice Chancellor Robert Habeck, the Green minister for the
economy and the climate, has ruled out extending the operation of the remaining
three nuclear plants (which together deliver around 5 percent of Germany’s
energy needs) beyond year-end. He claimed this would be “too risky” and “not
viable.” The association of the operating companies has denied these claims.
Habeck has looked instead for alternative sources of
gas, securing a long-term LNG supply agreement from Qatar —
a country that his Green party previously lambasted for its poor record on
human rights. In addition, the EU has just struck a deal with the U.S. for much-expanded LNG
supplies to Europe. Habeck claimed that this deal could make Germany more or
less independent from Russian gas by mid 2024.
The Greens would like to abandon fossil fuels altogether
at the fastest pace imaginable. They dream of an industrial country completely
powered by wind and solar. Several thousand more gigantic wind turbines are to
be built across Germany with the effect on the landscape that is easy to
imagine. But even with much expanded wind and solar power capacities, energy
security is not guaranteed. Given the volatility of wind and solar energy, it
means that in an extreme winter, blackouts cannot be ruled out.
Germany’s energy course correction was never going to be
easy, but it will be made far more difficult by the longstanding prejudices of
those in charge. It appears that some politicians would rather risk a blackout
than take the pragmatic course and reconsider nuclear energy.
No comments:
Post a Comment