Germans lose power after nuclear clash

By ERIC CULP

Oct. 15, 2000 (Knight Ridder/Tribune)à‚–Nuclear power is one of the most divisive issues in Germany. Any discussion over its use is likely to bring floods of rancour and occasional violence from parties opposed to extracting electricity from radioactive fuel.

While the neighbouring Czechs are embracing nuclear power by opening a plant in Temelin, it looks as if Germany’s Green party and no-nukers have won the latest battle against the controversial source of electricity.

Two of Germany’s largest power utilities, Eon and RWE, last week announced plans to pull a number of nuclear power plants from Europe’s largest electricity grid and analysts expect other power producers to follow. The reasoning, according to the utilities, is that the plants are uncompetitive.

It is no wonder: government price-fixing and taxation policies make a number of forms of power generation cost-ineffective.

As part of its broad eco-tax package, the German government instituted a levy on electricity last year. The finance ministry says it expects to take in nearly euro3 billion (UKpound 1.8 billion) this year from the duty, or a third of all the income from the taxes.

However, a number of power sources are excluded from the tax. Guess which one isn’t? A 2 pfennig (0.6 pence)per kilowatt hour mark-up on nuclear power à‚– and other sources such as coal à‚– is one way Berlin is promoting renewable energy in the country.

Not only are hydroelectric, wind and solar power production exempt from the tax, but they are also being subsidised by minimum prices set by the government, according to Josef Auer, an energy analyst at DB Research in Frankfurt.

He says producers that use renewable sources are guaranteed 5 pence a kWh, which is triple the cost of some power produced in the country. Renewable energy plants are “presses for printing money”, Auer says, noting that while most tech stocks are getting slaughtered, those involved in alternative energy technologies are continuing to record gains.

“The German power market is going through a radical change,” Auer says. One-third of German electricity comes from atomic power, but not for long: the government and German utilities have agreed to eliminate nuclear power by 2021.

Well, at least on paper. Germany has 19 active nuclear plants; if one is closed before its 32-year “lifetime”, then others can operate longer. This is seen as one reason for the decisions to pull the plug on the least-competitive plants.

The shutdowns are just the beginning of a winnowing in the number of German power plants. The country has an electricity overcapacity of 10 percent , much of which is rooted in the oil crisis of the 1970s when Germany was concerned about self-sufficiency and promoted nuclear power.

The reactors are only one sector due for a shake-out. Nearly 30 percent of German power is made by burning lignite. Long subsidised by the government, brown coal plants are now much more expensive than other methods of production and with carbon dioxide targets pending, a number could be snuffed. Auer says German power overcapacity will disappear by 2003.

Germans should not fear that the country could become an electricity importer, according to environment minister Jàƒ¿rgen Trittin, a top-ranking Green. He says renewable energy technologies will emerge to replace coal and atomic power production. Analysts are not buying it. Although Germany exports about as much electricity as it imports, the country will eventually become a net importer, probably on a scale larger than most politicians are willing to admit. Southern Germany is already linked to Austrian and Swiss hydroelectric power and it is believed that Bavaria is importing electricity from Ukraine or Russia.

Dieter Kshler, from the Research Institute for Energy in Munich, notes that with the reduction of coal and atomic power production “there will not be much left to export”. Since Germany has few natural resources of its own à‚– other than lignite à‚– it will become more reliant on foreign countries for power as it reduces coal and nuclear energy. For example, Scandinavian hydroelectric plants are expected to power homes in Germany at an increasing rate in the future.

About the only growth sector in the German power industry is natural gas, says Kshler. While only 6 percent of the country’s electricity comes from gas, Kshler notes that a number of hi-tech plants are under construction.

A heavier reliance on gas would further link Germany with Russia, which supplies the country through Gazprom. Importing electricity from the rest of Europe would also bind Germany closer to the European Union. “That’s not such a bad thing, is it?” asks one analyst.

To see more of Sunday Business, go to https://sundaybusiness.co.uk

(UKpound preceding a numeral refers to the United Kingdom’s pound sterling.)

à‚© 2000, Sunday Business, London. Distributed by Knight Ridder/Tribune Business News.

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