Not long after the Fukushima nuclear crisis, Germany announced it would be shutting down its nuclear plants and cancelling the construction of new nuclear facilities. And with the social and economic costs associated with Fukushima continuing to escalate, Germany’s move would seem logical given its current reliance on nuclear energy for 25 percent of its power.
But a recent estimate from the German company Siemens, the company behind the construction of 17 German nuclear reactors, suggests that Germany’s exit from nuclear energy could cost the country almost 1.7 trillion euros ($2.15 trillion US). This number accounts for two thirds of Germany’s GDP in 2011.
The 1.7 trillion estimate includes a strong expansion into renewable energy while accounting for feed-in tariffs, new power transmission and distribution, as well as storage technologies for renewable energy. However, the largest portion of these costs would come from feed-in tariffs, which are guaranteed prices utilities have to pay to generators of renewable energy.
Siemens’ estimate is far higher than other estimates of Germany’s shift – most notably Juergen Grossmann, chief executive of Germany’s No.2 utility RWE, who estimated costs to be around 250 – 300 billion.
But despite predictions that Germany’s move away from nuclear power is associated with high costs, an argument could be made that by investing in renewable energy now it is making itself far more competitive for the future global economy. Not only has Germany become a dominant power in renewable energy, 51 percent of its renewable power is currently owned by its citizens. This reveals an incredible democratization of renewable energy that places the power to generate clean power in the hands of the people rather than centralized, top-down utilities.
Do you think the costs associated with Germany’s shift away from nuclear energy will be burdensome for the country? What are your thoughts on the ‘democratization’ of renewable energy generation?
Image CC licensed by J Brew: Nuclear power plant, Bavaria, Germany