Germany’s energy competitiveness under threat

In this day and age of political correctness and aversion to controversy it is rare for a business leader to publicly express their frustration at a political decision. So it was refreshing to hear Dr Bernhard Fischer, head of Germany’s E.ON Generation GmbH, talk candidly about the impact the Merkel government’s radical change in energy policy post-Fukushima is having on his business.

Speaking last week at the POWER-GEN Europe Conference & Exhibition in Cologne, Dr Fischer described the policy change, known as the ‘Energiewende’, as a “political wish that is without a realistic view of what is achievable” by the power industry.

The Energiewende, which translates in its simplest form as ‘energy transition’ or ‘energy transformation’, will see nuclear power phased out in Germany by 2022 and compensated by a significant boost in renewable energy capacity ” doubling its share in electricity consumption to 35 per cent in 2020.

Dr Fischer said conventional power generation resources are already being “stretched” to support the country’s existing renewable energy installed base. So with the expected surge in renewable capacity coming on line before 2021, he emphasised that these conventional plants would be facing an “even greater challenge” in the coming years to compensate for this intermittency.

Dr Fischer described Germany as a “pacemaker in the world” over the last ten years, yet after Fukushima “everything that had been achieved” regarding the life extensions of the country’s nuclear fleet had been “undone”. And he asked what had been the result of this decision? “No risk was reduced. No new strategy was implemented.” All that was achieved, he said, was that “politicians proved that they could make a decision… and the public appreciated this”.

Although Dr Fischer conceded that the German energy policy was not “technically impossible” to achieve, he emphasised that it was “necessary to do so in the right way”. This, as far as he was concerned, had not been achieved. In relation to the nuclear withdrawal decision, he said: “No expert was asked. No risk assessment was done.”

Also speaking at last week’s POWER-GEN Europe was Dr Werner Gotz, a member of the board and chief technology officer of German utility EnBW Kraftwerke AG.

Although Dr Gotz accepted that the Enegiewende was needed not just in Europe but worldwide as part of the transition toward a low-carbon future, he criticised the speed of Germany’s energy transition, calling it “too quick”.

Two out of EnBW’s four nuclear power stations fell into the group forced to shut down immediately post-Fukushima, and this he said was “severely hitting his bottom line”.

However, unlike private energy utilities such as E.ON, which is seeking $10 billion in damages from the government for the accelerated nuclear phase-out, EnBW is publicly owned, leaving the utility to swallow the sizeable costs of holding stranded nuclear assets.

According to Dr Fischer, if Germany’s current energy policy is to achieve its aims it needs “co-ordination, co-ordination, co-ordination”, as well as time, money and acceptance, a sentiment echoed by Dr Gotz, who emphasised the need for “all interested parties to come together”.

Without this, though, Dr Fischer feared the policy would be “just a vision” and wondered if it was a vision that Germany’s power sector would be able to survive.

Kind regards,
Heather Johnstone, PhD
Chief Editor

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