Germany’s coalition government is to phase out all of the country’s nuclear power plants by 2022 in the aftermath of the Fukushima disaster in Japan, a total reversal of its previous pronuclear policy. According to German chemical industry association VCI spokesperson Sebastian Kreth, there has already been a 10% price hike in German electricity prices following the news, partly in response to a decision to discontinue permanently the use of eight of the country’s nuclear plants, seven of which were taken offline for a safety review in March 2011. Before then, nuclear power accounted for nearly a quarter of Germany’s electricity.
A further nine nuclear plants are expected to face the axe by 2022, which analysts say could drive energy prices even higher. ‘This is a big concern for energy intensive companies. Lots of smaller companies are affected by energy prices more than by a rise in wages,’ Kreth commented, adding that energy intensive manufacturers, such as Germany’s Vestolit, involved in PVC production, and SGL Carbon, a maker of specialised carbon materials for cars, have previously expressed concerns over high German energy prices. Even large firms that generate much of their own energy still rely on an outside energy supply, Kreth adds, especially for energy back up.
For now, most chemical companies are tied into long-term contracts that should shield them from the price hikes, but this may be a problem when they come to renew them, Kreth notes. Meanwhile, high energy prices could also impact on the sector’s competitiveness, he continued, particularly on any decisions about new investments or plant sitings.
German industry association BDI is cited in the UK newspaper, the Financial Times as warning that German electricity prices could rise by as much as 30% if all nuclear plant closures go ahead by the end of the decade. There are also concerns that government plans to increase renewables capacity – slated to double to 35% this decade, according to the FT – may not be available soon enough to make up the shortfall.
BASF’s former chairman Jürgen Hambrecht was a member of the Ethic Commission responsible for a report on the future of nuclear power that led to the government’s decision to exit nuclear. ‘The Ethic Commission believes that a phasing out of nuclear energy is possible within a decade,’ Hambrecht said. ‘The main condition for the exit is that the competitiveness of Germany as a location for industry and jobs is maintained or preferably increased. To achieve this, the energy supply has to be reliable, environmentally friendly and affordable.’
Both Kreth and Hambrecht warned of the dangers if alternative energy systems are not installed according to plan. ‘Germany as an industrial country cannot afford a blackout,’ Hambrecht said. As C&I went to press, some news sources reported that electricity suppliers have warned that outages could occur as early as this winter, which could hit heavily industrialised regions in the south and west of the country particularly hard.