Germany’s Irrational Nuclear Energy Policy

The German Government’s decision to abandon nuclear will worsen Europe’s energy troubles and increase the use of fossils.

The German government last week announced that it will shut all of the nation’s nuclear power plants by 2022 — an utterly irrational decision that only worsens Europe’s long-term energy crisis.

Bowing to misguided political pressure from Germany’s green party — a likely coalition partner for the Christian Democrats after the next general election — Chancellor Angela Merkel infuriated energy giants E.ON and RWE. The latter previously filed suit against the government after it imposed an arbitrary moratorium on nuclear energy production in the wake of the Fukushima disaster in March. A nuclear power plant in the Japanese coastal city was severely damaged in an earthquake and tsunami. Both E.ON and RWE may now pursue the issue through the courts unless enormous financial compensation is paid.

Environmentalists who applaud the German government’s decision should consider that renewables would have to generate an incredible 42 percent of the country’s electricity by 2020 to completely displace nuclear. Since that’s unlikely to happen, Germany will buy more coal from Poland, import from gas from Russia and buy more nuclear power from nearby France.

Gas prices will rise because of increased German demand and Électricité de France will build more nuclear plants at home because Switzerland, too, is set to dismantle its atomic energy industry. E.ON and RWE are unlikely to invest in nuclear anymore so EDF will come to dominate if not monopolize the European nuclear power market. Expect antitrust investigations into them mere years from now.