“You had better adopt nuclear energy”

Rep. Mike Simpson (R-Idaho) wants you (or, really, Energy Secretary Steven Chu, whom he was addressing at a hearing) to know:

“Fifty percent of our electricity is produced by coal, 20 percent by nuclear power. Yet, when I look at your budget, I look at huge increases in renewable energy funding, which makes up only a small portion of our energy portfolio and cuts in the other area that’s producing most the electricity and frankly I’m disappointed,” Simpson said. “Seems to me like there is an agenda of trying to push green technology, when I think nuclear energy is green technology … you’re really going to address global climate change, you had better adopt nuclear energy and it doesn’t seem like we’re doing that in this budget. This is the first time I’ve seen a retrenchment in this administration in advancing nuclear energy. The talk is all there, but the budget doesn’t reflect that.”

Like Rep. Simpson, the industry was disappointed with the 2013 budget request for nuclear energy. Even if one thinks that nuclear energy should take a financial hit as a result of the accident at Fukushima Daiichi, the response will largely be directed by the industry and regulators. The United States remains committed to nuclear energy and its technological advancement, so imposing a kind of slowdown doesn’t help the country achieve its long term energy goals – Simpson’s main point.

And Simpson’s right – achieving carbon reduction goals on renewables alone would go far more slowly than with nuclear energy in the mix. Though no one is threatening to shutter the American nuclear industry – just the opposite, in fact - slowing progress makes no real sense. What’s that? Did someone say Germany?

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Germany's abrupt change in nuclear policy has put a dent of €1.3 billion ($1.7 billion) in RWE's results for FY2011. It also boosted power prices and raised carbon dioxide emissions, the company said in its annual report to shareholders.

That’s from World Nuclear News. The story is largely about RWE’s earnings report, but there were a few telling tidbits. For example:

Among the figures moving upwards was the amount of carbon dioxide produced by RWE for each unit of electricity. This went up 8.2% from 0.732 to 0.787 tons per MWh "mainly because our Biblis nuclear power station stopped operating," it said.

Rep. Simpson, take note.

RWE linked the nuclear shutdown and a general rise in the cost of fuel to a hike in wholesale power prices. It said that the price of base-load power on the EEX Energy Exchange in 2011 had averaged €51 ($66) per MWh and peaked at around €61 ($80) per MWh. These figures represent increases of 16% and 10% on 2010 figures of €44 and €55 ($57 and $72) per MWh.

And the energy outlook is grim:

Looking ahead, RWE is focusing research and development efforts on carbon capture and storage techniques because, "by the end of 2022, all German nuclear power stations will be offline and the gap they leave cannot be closed by renewable energy and increased electricity imports alone."

Well, maybe CCS will be ready to roll by 2022 – cost and scalability questions still abound - but RWE is really betting the farm on it. And if it’s wrong? Then what does it do?

Germany is shaping up to be quite the case study.

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Scotland would like to shut its two nuclear facilities in favor of CCS, too, and renewables. How? Apparently, by sheer force of will:

Scottish energy minister Fergus Ewing acknowledged that the government's 100% renewables target has been met with "doubt and skepticism," but said Scotland would rise to these challenges. "I want to debate, engage and co-operate with every knowledgeable, interested and concerned party to ensure we achieve our goals," he said.

To doubt and skepticism, I’d add mirthless laughter.

Germany’s Biblis nuclear energy facility.

Breakers in the Solar Wave

Although Germany has become something of a whipping post on this blog, it’s hard not to look at its energy profile since it decided to close its nuclear facilities and not see something like chaos. But a lot of that chaos is incipient, so there’s time – not a lot, but still some time – to figure out how to proceed.

For Germany, one of those ways has been encouraging the uptake of renewable energy. But now, the plummeting price of solar panels has unleashed a new round of, how shall we put it, chaos.

Germany plans to reduce government subsidies supporting solar power by up to 30 percent within a year because higher-than-expected demand has made the scheme far more costly than authorities initially expected.

At first glance, that seems a boon to the solar business and a vindication of those subsidies – they seeded the market and now the market can proceed on its own. But not so.

German companies producing solar panels, already under pressure from stiff competition from new manufacturers in China, protested against the new cuts. Several thousand employees of about 50 firms in the segment held protest rallies across the country, the German Solar Industry Association said.

Now, this could simply be a case of not wanting the money spigot turned off – that’s not unusual. The growth of solar energy in Germany in impressive but seems containable: installations ran to 7500 megawatts in capacity last year, more than double the 3500 megawatts the government expected to see (and based its subsidy system around.) Remember that solar power cannot achieve 50 percent of its capacity rating, so those numbers are a little deceptive on their face. Nuclear energy facilities, by contrast, achieve above 90 percent of its capacity rating routinely.

Beyond these issues, the subsidies have put considerable pressure on the price benefit from the installations, essentially erasing the savings for ratepayers:

Installations of solar panels have boomed due to feed-in tariffs, generous subsidies which have mounted into a growing burden passed on to energy consumers.

Clearly the economics of solar power have gone haywire, but how?

Here’s the beginnings of an answer, from Morningstar:

Looking forward, we expect module pricing will begin falling within the next month, and reiterate our projection that module prices will be in the mid-$0.80s by summer. At such pricing levels, even a company with best-in-class production costs will not be able to turn a net profit this year. We reiterate our belief that for now long-term investors should steer clear of the space.

That’ll help, won’t it? Other financial gurus take equally dire views. The prediction is that there will be a wave of bankruptcies followed by a retrenchment. Here’s the bankruptcy part.

That will inevitably lead to more bankruptcies in a sector already laboring under 100 percent or more over-capacity and where leading names have filed for insolvency, including U.S.-based Evergreen Solar and Solyndra, and debt restructurings such as the one at Germany's Q-Cells.

And the retrenchment part.

But further cost cuts across the supply chain - and in particular the upstream manufacturers of raw solar-grade silicon - will sharpen the technology's competitiveness and see it mount a serious attack on offshore wind, shaking up the relative outlook for emerging technologies.

I’d add here that this shakeout holds the potential to strangle the solar panel business in Germany in the face of competition from China – what those protestors are rightly worried about - and losing a nascent business sector in a nascent technology would be an unquestionably poor outcome. But what about that serious attack on offshore wind?

If solar economics can leapfrog those of offshore wind, this poses the question: why invest in such a complex, moving piece of machinery as an offshore turbine, stationed in an unpredictable weather environment with massive servicing costs, rather than a simpler, static and more proven solar panel array?

One answer is that there may be more limited space for solar panels in the best, south-facing spots compared with the available coastlines suited for offshore turbines.

So – maybe. Note that Germany is far from being a sun-and-fun kind of place – this argument for solar is actually more solid for the United States.

I may be wrong, but this sounds like an instance where a business gambled that it would have a substantial product to sell but has ended up with the equivalent of a widget – and what company, especially one with considerable worker needs, can survive with a single widget as its product line?

This will shake out. Watching it do so is likely to be incredibly painful, especially in Germany, and a real blow to the solar energy business just when, ironically, it is gaining traction. In the meantime, chaos – Germany has blown a giant hole into its energy outlook.

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You win some, you lose some:

Kuwait has decided to abandon civilian nuclear power production.

Abandon in this case means not build. Kuwait thought it might build four reactors by 2020 but has changed its mind.

We wrote about Kuwait’s plans two summers ago, based on this bit of news:

Kuwait is experiencing almost emergency conditions after power consumption hit an all-time high for the third day in a row at 10,921 megawatts at 2:30 pm, which is around 30 megawatts short of maximum production capacity. The record consumption was triggered by record temperatures that reached 51 degrees Celsius at Kuwait Airport, 50 degrees in Kuwait City and as high as 53 degrees at the Abdali border post with Iraq.

53 degrees Celsius is 127 degrees Fahrenheit. Kuwait asked its neighbors for help but didn’t get much.

So, this is Kuwait:

About a quarter of Kuwait's power is generated from gas. The rest is from oil. Besides the exorbitant cost, the use of fuel oil has a major environmental impact and Kuwait City is often shrouded in a brown haze.

I’ve lost track of who lost what here.

Neighborhood as solar array in Germany.

Germany and the Nuclear Self-Trap Conundrum

Nuclear energy isn’t a trap for the unwary. When a country decides to invest in nuclear energy, it does so knowing the risks and benefits. If it invests heavily in nuclear energy – think France, Germany, Russia, China, The U.S. - it has done a good deal of study over many years to determine the value of the decision.

Public support for nuclear energy certainly took a significant hit after the accident at  Japans’ Fukushima Daiichi plant, but even that has begun to moderate.

Public support for nuclear power appears to have bounced back in the UK after falling sharply in the aftermath of the Fukushima disaster, a survey showed today.

The Ipsos MORI poll of almost 1,000 adults across Britain revealed half of those questioned (50%) supported the building of new nuclear plants in the UK to replace the current generation of reactors which are being shut down.

That’s what makes Germany’s decision to close its nuclear energy facilities so fascinating. Of course, you’d expect nuclear energy advocates to consider it a bad move – we’ve had considerable fun with it on this blog – but with most other countries moving forward, after a pause, with their plans (From the above story: “The UK Government plans to build a series of new reactors on or next to existing nuclear sites to replace plants being phased out over the next few years, as part of plans to ensure secure electricity supplies and to help cut carbon emissions.”), what has become clearer is that Germany’s decision was quite precipitous, even radically so.

What made it also seem cynical was that it was overseen by Chancellor Angela Merkel, who had previously recognized that exiting nuclear energy without a viable replacement plan in place was bad policy. In response to the accident at Japan’s Fukushima Daiichi plant but as likely motivated by a tough election, she pivoted by doubling down on a policy she considered bad.

But in doing so, did she make a trap of nuclear energy?

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Before the decision to close the plants, Germany was already in a pickle due to its decision to move heavily into renewable energy so it could exit nuclear energy by 2025, as this Economist article from late 2010 describes:

Renewables in Germany are growing more quickly than in almost any other EU state, but that is only because consumers pay a large subsidy, some €10 billion ($12.8 billion) last year. Energy taxes, already high, may be about to rise. In August energy companies and their supporters took out full-page newspaper advertisements arguing against tax rises and for a dismantling of bureaucratic barriers to investment. To secure cheap, climate-friendly power, the signers argued, nuclear and coal would have to remain part of the mix. 

[…]

Yet to withdraw on schedule from nuclear power, which produces more than a fifth of Germany’s electricity, would be risky. The CDU [Christian Democratic Party, Merkel’s party] is divided, but leans towards extending the deadline. Many in the party see the decision as a test for a chancellor who prefers messy compromises to clear leadership. “It would be fatal to give up” a source of energy that is cheap, domestic and emits little carbon, says Joachim Pfeiffer, a CDU member of the Bundestag.

Between late 2010 time and the Japan accident, the government decided to extend the life of the plants to provide more time to put renewables in place. So nuclear energy need not be a trap, even when you want to do something else. (The Greens in this article make a really funny argument, though – because nuclear energy runs full tilt all the time, it’s tough to ramp it down to accommodate the intermittent nature of solar and wind energy. It’s really flips relative strength and weakness on their heads.)

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The response to Germany’s post-Fukushima decision has been – what you’d expect:

Utilities are less keen. They say high natural gas costs, still mostly tied to oil with its inbuilt geopolitical price premiums, and low power prices make gas plants an unprofitable business.

"The goals is very ambitious -- this will not be easy," said Juergen Grossmann, chief executive of Germany's No.2 utility RWE.

So there’s that.

One of the top priorities is the expansion of transport and distribution networks for power from renewables sources including wind and solar, Germany's new favored form of energy.

The task is being delayed by protests and overly long procedures to approve new grids and existing grid revamps, which in some cases take more than 10 years.

And that.

Siemens estimates that Germany's energy shift will cost up to 1.7 trillion euros ($2.17 trillion) by 2030, most of which will be borne by taxpayers and power consumers.

And – hey, ouch!

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Some of this might have been inevitable – nuclear plants have exceptionally low running costs – but other aspects are a function of flipping the off switch too quickly. All other factors being equal, Germany would be foolish not to consider all options.

The German government's 180-degree turn in nuclear policy has helped breathe new life into Europe's energy industry -- though not always to Germany's benefit. The country has gone from being an energy exporter to an energy importer practically overnight, which brings along with it a number of negative consequences for its economy, consumers and security.

And that can cause a grim, tight smile. Why?

Germany's decision to phase out its nuclear power plants by 2022 has rapidly transformed it from power exporter to importer. Despite Berlin's pledge to move away from nuclear, the country is now merely buying atomic energy from neighbors like the Czech Republic and France.

That may seem a case of reaping what you sow , but it also raises the specter of hypocrisy.

So has nuclear energy trapped Germany into a costly, self-defeating  energy policy? Not a bit – Germany self-trapped, so to speak, letting panic, short-sightedness and cynicism trump sound policy making – whether that policy would or would not have included nuclear energy.

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Speaking of other countries not following Germany’s course:

Ma Ying-jeou won 51.6 percent of the total votes to Tsai Ing-wen’s 45.63 percent, while voter turnout, at 74.38 percent, was less that the 76.33 turnout in the previous presidential election in 2008, though all the numbers won’t be finalized until a Central Election Commission meeting on Thursday.

Ma supports the expansion of nuclear energy in Taiwan. His opponent, Tsai Ing-wen, wanted to close all the plants. Nuclear energy was not a big issue in the election – economic ties to mainland China, which Ma initiated, was the determinative factor.

Still, no complaints here.

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Our Japan updates continue every Monday over on the Safety First web site. The site has more too, including, most recently, a great interactive graphic showing how American nuclear facilities weathered various natural hullabaloos surrounding them this year. Great to share with friends. Well worth a visit for more than just the Japan updates.

German Chancellor Angela Merkel.

In Age of Austerity, France Stays with Nuclear Power

First, an additional tidbit on our coverage of IEA’s World Energy Outlook 2011, where we learned that the rumors of nuclear energy’s demise are greatly exaggerated. Just consider this chart from page two of the “Key Graphs” part of the report. 

As you can see, the IEA sees nuclear’s future more in line with the measured growth of renewables rather than coal or oil’s steady decline.

In its report, the IEA imagines a world without (or actually, with very little) nuclear power. It’s called the “Low Nuclear Case” scenario. And surprise! It’s not the utopia some would have you believe.

The net result would be to put additional upward pressure on energy prices, raise additional concerns about energy security and make it harder and more expensive to combat climate change.

Of course, it’s a projection, so it has to be taken with a grain of salt. But the data coming in from countries that have scaled back their nuclear energy plans show that the IEA is onto something.

First, there’s Germany. As we’ve covered before, their nuclear moratorium has led to higher cost electricity, lost jobs and more emissions.

There’s some evidence that Japan’s shutdown of most of its reactors may be having a negative effect on Japan’s export-based economy. [Financial Times, subscript req’d. “Japan restarts first nuclear reactor since disaster,” Nov. 1, 2011.]

Concerns about stable supply of electricity are prompting some [Japanese] companies to shift production overseas. A rise in fuel costs for utilities to make up for a lack of nuclear power, leading to bigger electricity bills for consumers, is another factor undermining the economy.

A full nuclear shutdown would have a huge annual bill as Japan turns to more expensive fossil fuels.  

Using gas and oil to make up for the loss of all nuclear power reactors will cost more than 3,000 bn yen ($38bn) a year, based on imported fuel prices and utilisation rates in 2009, the government has estimated.

Another country has considered the pros and cons of nuclear power, but when asked about shutting down its reactors replied with an emphatic “Non, merci!”

The French government's fiscal belt-tightening effort won't touch the country's ambitious nuclear energy program, France's energy minister said Wednesday, as he also dismissed any need for France to reduce its nuclear dependency...French energy and industry minister Eric Besson said Flamanville, the follow-up Penly reactor and other French nuclear investments won't be affected "at all" by the country's austerity package.

"The plan is designed to reduce deficits, yet growth engines aren't touched, budgets for the future haven't been dented," Mr. Besson said two days after the government unveiled a €7 billion austerity package.

In fact, it turns out nuclear energy can be especially helpful in times of austerity. First nuclear energy creates jobs—not only in the industry itself—but in wholly unrelated fields.

Mr. [Henri] Proglio [chief executive of Electricité de France] said that 400,000 jobs, direct and indirect, in the nuclear industry would be threatened [if France shut down its reactors] as well as another 100,000 future jobs dependent on nuclear exports. Another 500,000 jobs in energy-intensive sectors like aluminum production could be outsourced to other countries as a result of higher energy costs, he predicted.

Lower cost electricity (generated thanks to nuclear energy) also leaves ratepayers/consumers with more money in their pockets, too. Money they can spend on other goods and services, spreading the wealth.

The French pay, on average, about 30 percent less for their electricity than their neighbors do, he said, ‘‘thanks to our nuclear establishment and hydropower.’’

Of course there is a way out. Something akin to the IEA’s Low Nuclear Case: build more fossil fuel plants.

Mr. Proglio told the paper that it was his ‘‘conviction’’ that France…would need to invest somewhere in the vicinity of $544 billion to build new fossil fuel power plants to replace lost generating capacity if it shut down its reactors.

That, he said, would have to be financed by a doubling of the price of electricity and would bring a 50 percent increase in France’s greenhouse gas emissions.

A doubling of electricity prices, hundreds of thousands of jobs lost and (lest we forget!) higher emissions. Sounds like the IEA is onto something in its projections of a world without nuclear power. And sounds like France has the right idea to not scale back nuclear energy during tough times. Something to keep in mind as more nations, including our own, face budget cuts.

Germany Nuclear Phase Out Same as Putting 4.4 Million Cars on the Road

We return, once more, to Germany where details are starting to emerge on the real costs of their nuclear phase out.

Let’s start with emissions. According to an estimate by Laszlo Varro, the head of the gas, coal, and power markets division at the International Energy Agency emissions will rise significantly.

Varro estimates that the nuclear phase out in Germany has caused a 25-million-ton annual increase in carbon dioxide emissions. The culprit, in large part, is the new coal power that has come online to meet the shortfall.

25 million tons is sort of abstract, but EPA has a pretty cool tool: the Greenhouse Gas Equivalencies Calculator. It finds more concrete alternatives to “tons of carbon dioxide” like “emissions from passenger vehicles.” Turns out 25 million tons of CO₂ emissions per year is equal to (pick your favorite one of the following):

• Annual greenhouse gas emissions from 4,446,984 passenger vehicles or
• CO₂ emissions from 52,743,297 barrels of oil.
• CO₂ emissions from the electricity use of 2,827,882 homes.
• CO₂ emissions from burning 123,494 railcars’ worth of coal.
• Annual CO₂ emissions of 5.4 coal-fired power plants.

Imagine adding emissions from 4.4 million cars in a country of 80 million. Or the emissions from almost 3 million homes. That’s essentially what Germany’s done with its phase out of nuclear power.

Don’t forget jobs. Obviously, the European economy isn’t doing too well. While Germany seems to be weathering the storm fairly well, losing 11,000 jobs can’t help.

E.ON, the world's largest utility by sales, joined peers in posting weak half-year results as Germany's decision to abandon nuclear power forced it to slash its profit outlook, its dividend and up to 11,000 jobs.

There are also concerns over the nuclear phase out’s long-term drag on Germany’s export-oriented economy. One estimate has energy bills up 20%.

Christian Schulz, senior European economist at Berenberg Bank, said estimates suggested the nuclear shutdown would increase Germany's energy bill by a fifth, which will hit the country especially hard since its economy relies heavily on its energy-intensive manufacturing industry to propel growth.

This sort of things makes you understand German manufacturers’ concerns about competitiveness. But the phase out isn’t sparing consumers either.

German households pay twice as much for power than in France, where 80% of energy is generated by nuclear plants. Klaus Abberger, senior economist at the Ifo institute for economic research at the University of Munich, said energy prices had already gone up since plans to end nuclear power generation and would stay at high for at least the next five years [emphasis added].

So much for “expensive nuclear power.” Perhaps this is behind Belgium’s qualified rethink on nuclear power.

The plan for a shutdown of the three oldest reactors by 2015 and a complete exit by 2025 is conditional on finding enough energy from alternative sources to prevent any shortages.

"If it turns out we won't face shortages and prices would not skyrocket, we intend to stick to the nuclear exit law of 2003," a spokeswoman for Belgium's energy and climate ministry said.

That’s a fair share of caveats. At least this gives  Belgium a face-saving out if they can’t find cost effective “alternative sources” scalable enough to prevent blackouts. Renewables and natural gas may just fit the bill. Or not. Renewables are hard to scale up. Natural gas prices are hard to predict. But Belgium, unlike Germany, at least has given itself time to consider the alternatives.

Will Europe Struggle to Keep the Lights On?

A new study from consulting company Capgemini said that Europe may have trouble “keeping the lights on” this winter thanks to the nuclear phase-out in Germany.

Following its reactor shutdowns, Germany began to import electricity from its neighbors, including more than 2,000 MW per day from France. During the winter electricity peak, France mainly imports electricity from Germany and this will no longer be possible in coming years. This represents a real threat to some countries “keeping the lights on” for winter 2011/2012 and future winters.

The report sums it up well: without German nuclear generation, energy security is down, emissions are up. First, security. The Europeans better cozy up to the Russians because they will be more dependent on them than ever.

In 2010, the EU imported 113 bcm of gas by pipeline from Russia, representing 33% of total gas imports. In 2030, gas flowing through Gazprom pipelines is expected to represent 50% of all European gas supplies.

That’s right, 50 percent, half of all European gas. But Gazprom’s dependable, right? Sure, most of the time. Just ask Ukraine, Belarus and Lithuania. But Nord Stream should end all that, right? Sure, no problem.

Then, there’s emissions: the nuclear phase-out is taking Germany further away from its climate goals. The Breakthrough Institute had this to say in its analysis of the German government plan to phase out nuclear.  

The plan indicates that--in the absence of nuclear power--Germany will continue to be heavily reliant on fossil-fuel generation for the bulk of its electricity supply. The report calls for the construction of 5 GW of new natural gas power plants, in addition to 11 GW of new coal-fired power plants currently under construction in the country. This will leave the country with a net increase of 5 GW in coal-fired electricity capacity...this planned uptick in fossil fuel generation would cause the country's overall carbon emissions to rise by as much as 14% of the country's 2008 total carbon emissions.

But there’s hope. Some of Germany’s neighbors see an opening here. Why not sell the Germans low-cost, low-carbon electricity generated by nuclear power plants? [WSJ, subscription req’d] The Czech Republic seems particularly well placed.

On Monday, the country's government-controlled CEZ AS  [electrical utility] will issue technical specifications for a $25 billion project to build up to five new nuclear reactors, with the first two scheduled to go online by 2025.

What’s more, the Czechs are old hands at exporting energy. 

Vaclav Bartuska, the Czech government's special energy envoy, said the Czech Republic wants to increase the proportion of its electric power generated by nuclear reactors to 50% from the current 30%…CEZ, which is operating six reactors now, has long been one of Europe's largest power exporters, sending electricity to neighboring Germany and elsewhere.

Poland may be getting into the act and Hungary is toying with the idea. What’s not to like? It’s probably more secure than Russian gas and will help Germany meet those emissions goals. We’ll give the Czechs the last word, as it’s Czech National Day today.

"There is antinuclear sentiment in some countries," Mr. Bartuska added. But until alternate energy sources make economic sense, "we see nuclear as the solution."

For more on American and Czech cooperation in  nuclear energy, see this fact sheet from the White House.

“We cannot keep the lights on without nuclear energy.”

From Mohamed ElBaradei, the former head of the International Atomic Energy Agency:

"There will be, in the short term, a slowdown in some countries. But others like France, India or China [won't see] an impact on their [nuclear] programs," he says.

A little more:

"For example, China and India are expanding by five to eight times their use of nuclear energy by 2020 or 2022. Brazil is expanding its nuclear-power program. South Africa is looking seriously to do so," he says. "All these large emerging countries, with large populations and development challenges, have to rely on nuclear energy.

Lots more at the link. The article says the ElBaradei has political ambitions in his native Egypt, but I’ve read in various other places that his international profile might make that difficult because Egyptian voters might not think he is attuned to homeland issues. Well, we’ll see.
I make no bones about finding ElBaradei an altogether admirable figure. He gathered enough authority around himself to balance the imperatives of small countries against the conflicting priorities of larger, pushier neighbors. This gave the IAEA a tremendous moral force even if it did not always impact the course of events practically. But it’s what the United Nations, of which IAEA is a part, should do.
The BBC article includes this: “In the words of Greenpeace International, Mr. ElBaradei (at the IAEA) is both ‘nuclear policeman and nuclear salesman’”. This is because the agency dealt with both non-proliferation issues and domestic nuclear energy development. Actually, the subjects fit together pretty snugly. See here for more on that.
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We’ve been happy to snark at Germany’s decision to close its nuclear plants. But it’s nice to see the non-snarky weight in:

Public fears about atomic energy after the accident at Japan's Fukushima Daiichi power plant prompted Japan, Italy and Germany to cancel plans for new reactors or accelerate the shutdown of existing ones. The IEA [International Energy Agency] says that poses a danger to plans to keep emissions in check, particularly for member countries of the Organization for Economic Co-operation and Development, where nuclear power accounts for more than half of all low-carbon power.

Oh, does it pose a danger? Well:

Germany has said that it may need to extend the life of its ageing coal-fired plants to make up for the loss of nuclear energy. This week, Miguel Sebastian, the industry and trade minister of Spain, said his country needed to develop the coal resources inside its borders.

Indeed. Visit the International Energy Agency here. Lot and lots of useful data.
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Interesting piece on the United Kingdom’s energy profile at the Independent:

In the post Fukushima era we should still have confidence that nuclear energy can be a safe secure affordable form of energy for the 21st century and that the new modern plants available today should be a significant component of the UK’s energy mix for the foreseeable future. In the very cold days of last winter, nuclear energy was our main source of low carbon electricity. It provided ~18% of the UK’s requirements; 16% from our own stations and a further 2% imported from France. Almost all the rest was provided from power stations burning fossil fuel.

The conclusion of writer Dame Sue Ion (what a great name!):

We cannot keep the lights on without nuclear energy.

Yup.
Mohamed ElBaradei

Germany Counts Cost of Nuclear Shutdown

Nuclear energy. It’s expensive, right? That’s what a lot of our friends at the Union of Concerned Scientists and Greenpeace keep saying.

Alright, then let’s shut down some plants and start saving money, right? Surely, just on a cost basis alone, it makes sense. To be fair, let’s replace the electrons generated using fission with a mix of (more expensive) renewables and (relatively cheaper) fossil fuels. We can use more domestic coal, maybe import some natural gas and use local renewables to drive down electricity prices. That should save ratepayers real money every month. But wait. Something quite similar is happening in Germany and electricity prices have gone up, not down [FT, subscription req’d. Original article: “Electricity Prices Jump in Europe,” March 15.]. Just after the Fukushima accident, as Germany announced it was shutting down several nuclear power plants, the FT reported:

The cost of electricity in Germany, the European benchmark, immediately rose as utilities are likely to burn more expensive natural gas and thermal coal to bridge the shortfall in electricity.

Then, there are even more expensive options like renewables.

Increasing the share of renewables in electricity and heat is likely to be expensive for some time to come. Onshore wind is currently about 50% more expensive per unit of energy than conventional power sources, while offshore wind is about 250% more expensive.

And now, according to VIX, a German trade group, electricity prices for industrial users are expected to rise next year. It’s particularly poor timing:

Germany's big electricity consumers said on Wednesday they expected their power bills to rise by an average 9 percent for 2012, burdening industry amid a weakening economy and rising finance costs.

Not only that, but cutting nuclear energy out of the mix may be reducing not only the quantity, but the quality of electricity available. The knock-on effect? Horror of horrors! A decline in German manufacturing and export prowess.

…[VIK Chairman Volker Schwich] also said that network frequency changes have become more evident since the withdrawal of the huge nuclear facilities, which had ensured stability. This could hit sensitive industrial production, even if it is not noticeable by household customers.

‘It's not about a candle-lit dinner but complex production processes whose stability, long before a publicly noticeable network black-out, can be threatened,’ he said.

…He said this was unacceptable for an export nation.

There are many cost/benefit trade-offs to consider in energy choices. But here’s hoping that Germany’s rush to ditch nuclear power finally ends one enduring myth: that nuclear energy is just too expensive. As we pointed out before, done right over the long term, it’s one of the cheapest baseload generating options.

Finally, a side note on current prices. While it is true that German electricity prices (to be precise, contracts for baseload electricity in 2012) are down lately, this seems more due to the anticipation that European growth will remain slow this year, as this article notes. I.e., it’s not due to the German nuclear shutdown, which had the opposite effect on prices. 

Also, the press release from VIX, in German, is here. I found Google Translate got me pretty close to the original.

Having a Future

Even after the Fukushima Daiichi facility achieves a cold shutdown and even if no one becomes sick or dies as a result of the accident – no one has so far – the impact to the nuclear energy industry on a global basis is not yet in full focus.

This lack of focus became, um, clearer after I read an interesting story in the New York Times that aims to address this issue – it’s here, called “After Fukushima, Does Nuclear Energy Have a Future?,” that does a reasonable job of surveying what different countries are doing with nuclear energy in the shadow of Fukushima. The story tilts toward what one might call the worst case scenario, but it’s not unrealistic and it points out inconvenient counter-facts, always a plus in my book.

Despite this relatively dismal outlook for nuclear energy, the London-based World Nuclear Association predicts a 30 percent increase in global nuclear generating capacity over the next decade; it foresees 79 more reactors online by 2020, for a total of 514, even taking Fukushima into account. And it sees a 66 percent increase by 2030, with capacity additions in China, India, South Korea and Russia outnumbering projected declines in Germany, France, the United Kingdom and the United States.

May not portend titanic growth but it doesn’t suggest a “dismal outlook,” either. Maybe writer Stephanie Cook even had to rush a bit to get the U.K. into her panoply of gloom before the country’s apparent decision to move forward – she does go for the worst case.

But really, so what? As the selection of stories included here indicates, things are happening in the nuclear sphere and people are saying encouraging things. Here in the U.S., there have been plentiful opportunities for big protests and hijacking public meetings, but there hasn’t really been any of that.

Now, I’ll gladly admit that some countries are trying to ensure nothing happens in the nuclear sphere and saying discouraging things – maybe I’ll round up a few of those later on – but this strikes me as the time where things will get said on all sides and energy policies will be formed and reformed accordingly. Nuclear energy may lose some ground but may well make up a lot of it – the point is, we don’t yet seem to be on the leaf of the calendar where that tale can be told fully and honestly.

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Meanwhile, however, there are bits of the story to be told. Consider:

The U.K.'s chief nuclear inspector said Tuesday he saw no reason to curtail operations at existing nuclear power plants or change siting strategies for new reactors following the Fukushima disaster, effectively giving the green light for investments in new nuclear reactors to move forward.

And over to China:

Chinese regulators performed a four-month review of safety at all existing nuclear reactors and reactors under construction after the Fukushima meltdowns and declared them safe. Safety reviews continue at reactors where construction had not yet started at the time of the Fukushima accident.

And:

Mr. Jiang [Kejun, a director of the Energy Research Institute at the National Development and Reform Commission], said in an interview that nuclear power construction targets for 2020 had not yet been set and might end up slightly lower than they would have been without the meltdowns in Fukushima. But he and other Chinese officials say that China’s rapidly rising electricity consumption makes nuclear power essential.

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Also from the New York Times:

For instance, Germany’s decision to shut down its nuclear facilities would raise wholesale prices for utilities’ power by as much as €7, or close to $10, per megawatt hour in Germany, on average over the next decade, and by up to €5 per megawatt hour in France and the Netherlands, according to Fabien Roques, the director of European power for IHS Cera, a research and consulting firm.

“In some places we have a common market for energy, but we don’t have common procedures for generating energy that we can actually rely on,” said Mr. Roques. “You can see how this situation creates friction between countries.”

That’s a lot. It must be fantastically annoying for France, which will likely be shoveling some of its nuclear-generated electricity Germany’s way. Call it the unintended consequences of a high-minded stand.

The British nuclear fleet – from Centrica. Click for larger.

A Running Debate on Nuclear Energy

We suppose you could call it a running debate:

Stating that the country's atomic energy program is self-sufficient in terms of human resources, advisor to Indian Space Research Organization (ISRO), Prof MGK Menon on Monday said, "In the past two decades, the country has successfully been able to generate trained people to carry out nuclear energy programs on its own."

Menon goes further:

Menon, a former ISRO chairman, said, "We need nuclear energy because it is a source that does not leave carbon footprint. The development of the country rests upon nuclear energy and hence we need it in abundance."

But do we need it? Switzerland has studies:

Over the past few months, a group of researchers at the Energy Science Center (ESC) of ETH Zurich have carried out an intensive examination of whether the available options will enable Switzerland to scope out a medium-term energy future without nuclear power, as decided by the Swiss Federal Council in May. Their answer was yes.

Well, okay. How?

If the remaining 40 TWh [not supplied by hydro, which is tapped] is to be provided without nuclear energy, this will need a major expansion in new renewable energy sources, mainly photovoltaic, followed by the localized utilization of biomass and finally geothermal energy.

That sounds a little – implausible.

According to the ETH Zurich researchers, flexible gas-fired power stations or electricity imports will be indispensable to cover demand peaks, at least in the short term.

Ah, there we go. Maybe they can import it from France. If this sounds as though the ESC is struggling a bit, just wait:

[F]oreseeable technological development should enable, from 2020 to 2025 onwards, the construction of combined gas-fired power stations in which the CO2 produced can be captured and stored.

Or not. Do read the whole thing, though, for the full perspective. Energy efficiency will also play a big part.

Or ESC could just look next door, at Germany:

The upshot [of keeping eight nuclear facilities closed]: so far, Germany has lost about 10 percent of its power-generation capacity, officials said.

But surely things will improve:

The phase-out was hasty, some say. And by some measures, it has backfired. Despite extensive support for renewable energy, Germany is now producing more carbon emissions. At a time when its economy is already slowing down, businesses are bracing for brown-outs and higher energy prices.

Perhaps Germany can right the energy boat with some imports from France.

I guess one could say that tough decisions lead to tough choices. But let’s let the debate play out:

Helen Caldicott, M.D., will speak at 7 p.m. Oct. 10 on “Lessons from Fukushima: What role should nuclear energy and natural gas extraction play in our energy future?” The free event, which begins with a concert by recording artist Janet Burgan at 6:30 p.m., will be held in Binghamton University’s Mandela room in the Student Union.

I’m sure Dr. Caldicott will find some kind of a place for nuclear energy and natural gas extraction, don’t you? But at least Ms. Burgan, whose tune “No Fracking Way” is catchy if over-earnest, will provide a little leavening to the dough.

Janet Burgan. From No Fracking Way: “Landsmen came to me one day; No,no, no fracking way; Want to lease my land for pay; No, no, no fracking way; What about the waterway?; No, no, no fracking way; Where our brother fishes play; No, no, no fracking way.” Ms. Burgan’s work doesn’t seem as committed as this generally, though there are titles such as Range War and Trouble in the Fields in her songbook. We looked for a nuclear-themed song by her, but came up dry.

The Latte Fallacy: German Nuclear Shut Down Proving Expensive

One of the big arguments against nuclear is that it simply costs too much. Well, if the latest reports from Germany are anything to go by, consumers are going to have to pay more without it.

As reported here earlier, Germany has decided to phase out nuclear power and is hoping to shut down all of its plants by 2022. What has been the result? Rising electricity prices.

Since the first nuclear power plant was shut down, the price of electricity on the European Energy Exchange in Leipzig has increased by about 12 percent.

Not only that, Germany has lost  some energy independence too:

Germany has gone from being a net exporter to a net importer of electricity. According to the European Network of Transmission System Operators for Electricity (ENTSOE) in Brussels, Germany now imports several million kilowatt hours of electricity from abroad every day.

This wasn’t the way things were supposed to go.

"According to our calculations, the cost of a kilowatt hour of electricity will go up by only one cent," says Economics Minister Philipp Rösler, head of Merkel's junior coalition partner, the Free Democrats (FDP). For an average household, this would correspond to the price of only one latte a month, says Environment Minister Norbert Röttgen, of Merkel's Christian Democrats.

One latte a month. Doesn’t sound so bad. Well, the real price increase could be five times as much according to a study by the Rhenish-Westphalian Institute for Economic Research (RWI).

…the politicians' estimate of the costs of expanding renewable sources of energy is far too low…RWI experts estimate that the cost of electricity could increase by as much as five times the government's estimate of one cent per kilowatt hour.

Another study by the “semi-governmental” German Energy Agency anticipates an increase of four to five cents, in line with the RWI estimate. Finally, a third estimate from the Economics Ministry sees more than a “latte a month” increase. 

An internal estimate making the rounds at the Economics Ministry also exceeds the official announcements. It concludes that an average three-person household will pay an additional 0.5 to 1.5 cents per kilowatt hour, and up to five cents more in the mid-term [emphasis added]. This would come to an additional cost of €175 ($250) a year. "Not exactly the price of a latte," says Manuel Frondel of the RWI.

It’s just more evidence that when it’s done right, nuclear energy is one of the most cost effective ways of generating electricity. 

Jordan – Gates – Germany - NuScale

A couple of days ago, I expressed a little disappointment that Bahrain was not joining the nuclear family – well, maybe it will, but it doesn’t seem to be on its radar right now. So let’s replace that bit of grimness:

Like many others, Jordan is not giving up on its nuclear program, which it considers an essential part of its energy plan. The country has plans to build two reactors in the next decade, and two additional reactors are planned for the next 25 years.

Jordan is at the stage where it is scoping out vendors:

The country’s atomic commission has pre-selected possible technologies from Atomic Energy of Canada, Russia’s ZAO Atomstroyexport and Atmea, a joint venture between France’s Areva and Japan’s Mitsubishi Heavy Industries.

Rolling right along.

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Bill Gates has been enough a fan of nuclear energy to invest money in it. Have events in Japan changed his mind? Wired thought it would find out:

The good news about nuclear is that there’s hardly been any innovation in the past three decades, so the room to do things differently is quite dramatic. The difference between today’s designs and one from the 1960s is night and day. We understand heat pipes a lot better today. We understand what the decay of heat looks like. There’s this company, TerraPower, which former Microsoft CTO Nathan Myrhvold and I have spun out of his invention group, Intellectual Ventures. We’ve got a new nuclear design, a generation four. On paper it’s quite amazing.

Well, I can’t say I agree with everything here, but Gates is on the hunt for the next big thing (as he often is) and he’s decided that TerraPower is it. That makes everything else, in his mind, rather outmoded – out with DOS, in with OS/2.

You can read the rest at Wired. A lot of his views on energy are counterintuitive, but that makes them challenging even when you find yourself disagreeing with him most of the time.

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Economist Ferdinand Banks takes a look at the German decision to close its nuclear plants. The piece is a little dense in style, but easily comprehensible and even amusing. A taste:

Here it needs to be appreciated that if the German nuclear retreat were a reality instead of a politically motivated and bizarre fantasy, the French nuclear sector might have already started to expand in order to receive the hundreds of billions in export income that would become available when German nuclear facilities begin to close their doors.

Not completely fair, I’m sure, but love it anyway.

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NuScale, a prospective designer of a small reactor design, recently found itself the negative beneficiary of an investment firm heavily involved in a Ponzi scheme. NuScale had nothing to do with the bad business, but of course, suffered a stark reversal of fortune and almost collapsed. Better days ahead:

NuScale Power has been quietly recalling laid-off employees over the past two months as it slowly recovers from a financial crisis that very nearly proved catastrophic.

That’s good news.

NuScale's modular reactor technology has continued to attract attention in the nuclear industry, however, and some modest outside investment. Landrey declined to say how much new backing NuScale has raised so far, but said his company is increasingly confident about its future.

That’s chief marketing officer Bruce Landrey and that’s about what you’d expect him to say. Some of the vendors working on small reactors likely won’t last – it’s just how business works – but it would have been a shame to see NuScale go pear shaped due to the bad behavior of others.

Bill Gates

Grist’s Anti-Nuclear Campaign Distorts Reality (Part 2 of 3)

Continuing on with our analysis of Grist’s anti-nuclear campaign, the following is what we think about Mr. Jungjohann’s third and fourth pieces.

Grist’s Part Three - States fight back against nuclear power, even as the feds remain in its thrall

In his third piece, Mr. Jungjohann claims, with little evidence, that states are turning against nuclear. Of the five states he mentions, only one of them is actually fighting against nuclear and that’s Vermont, which has been fighting for years.

In New York, a new, ambitious governor who wants to shut down Indian Point may not speak for the majority. As an example, former Mayor Rudy Giuliani supports nuclear and the folks up in Oswego County have been working hard for a long time to bring a new reactor to the state.

In California, just because activists are going after the state’s two nuclear plants doesn’t mean the state is fighting nuclear.

And in Maryland and Texas, the decision to suspend the process for new plants was made by the sponsoring companies for competitive and business reasons. The state governments were not involved.

Based on our count (pdf), Mr. Jungjohann may be interested to know that there are 19 states with legislation and regulations that encourage and support the expansion of nuclear electricity to power their economies.

Further, here’s what New Jersey (not in our count of 19) said in its draft energy plan (pdf) released last week:

While the prospect of new nuclear generation to replace Oyster Creek is not achievable by the end of the decade, New Jersey should remain committed to the objective assessment of how nuclear power fits into the diversified resource mix to meet economic, reliability and environmental goals [p. 5]. … The State cannot achieve its 2050 greenhouse gas reduction goal without a significant portion of the energy supply coming from nuclear technology [p. 79].

‘Nuff said about the states.

Grist’s Part Four - Is pro-nuke enthusiasm in the U.S. waning?

Mr. Jungjohann’s fourth and final piece is conjecture and speculation barren of factual or evidentiary support. He asks and answers:

Can we then look forward to a new renaissance of nuclear power in the United States, as its supporters like to claim? Unlikely, for the nuclear revival is on financially shaky ground. Exploding costs and cheap competition from natural gas are grave problems for the industry. The Wall Street banks see the new construction plans as too expensive and too risky. Even with billions in federal guarantees, American businesses can't afford the price of nuclear power. Only a handful of new nuclear projects have moved ahead in recent years, primarily at existing nuclear plant sites in the southeastern United States.

One question, if businesses can’t afford nuclear, how does he explain “the new nuclear projects [that] have moved ahead”?

As we’ve said for a number of years now (pdf), building new nuclear plants would unfold slowly and that “we expect four to eight new reactors on-line in the 2016-2020 timeframe.” We also said that “yes, the price of gas is low, but we’ve seen four major periods of volatility in gas prices since 2000. At no time during that period did we have any concern about gas supply or resource base. So at least in the past, gas price volatility has not been correlated to resource base.” Here’s a slide from page 19 in our Wall Street presentation earlier this year looking at the long-term fundamentals for nuclear in the electricity market:

Utilities take a long-term view on nuclear since building and operating plants will provide electricity for 40 to 60 years. Looking at the data, as described in pages 9 and 10, the long-term fundamentals have not really changed. The US will continue to consume more and more electricity, half of all power plants are more than 30 years old and will eventually need to be replaced, and gas prices have historically shown volatility regardless of how much is known to be in the ground. Sounds like there’s still a big niche that nuclear can fill.

Here’s Mr. Jungjohann’s last line in his series:

In the best case, nuclear will be an unnecessary delay for a transition toward a renewable energy-based economy.

I guess we’ll see. Many people in the US and across the world, however, believe Germany’s making a mistake. Below are a number of affirmations of nuclear power from the many countries that have decided on a course starkly different than the German one.

Malcom Grimston, Chatham House research fellow and advisor to the UK government on nuclear policy said this about the shutdown:

To have a major European economy inevitably saddling itself with more greenhouse gas emissions - the German Greens are openly talking about building more gas-powered plants and supporting the new coal-fired plants that are being brought online - is, I think, going to be a tragedy for the environment, and I don't think it's going to be good for the German economy.

The Washington Post’s editorial board said this:

Panicked overreaction isn’t the right response to the partial meltdowns in Japan’s Fukushima Daiichi nuclear complex. Instead, countries aiming to provide their citizens with reliable, low-carbon electricity should ask how to minimize inevitable, if small, risks — making their nuclear facilities safer, more reliable and more efficient.

Daniel Poneman, U.S. Deputy Secretary of Energy reaffirmed the American commitment to nuclear. 

Senate Energy and Natural Resources Committee Chairman Jeff Bingaman (D-New Mexico) called Germany’s decision a “mistake.”

Francois Fillon, Prime Minister of France said this:

“there’s no way” for the European Union to meet its emission-cutting targets without at least some nuclear power.

Donald Tusk, Prime Minister of Poland said this: 

If nuclear power isn’t good enough for the Germans and others, it raises the question of what type of energy is good enough … With all due respect, windmills will not replace the nuclear power plants that exist in Germany. And despite Nord Stream, there won’t be enough gas to build enough [gas-fired] power plants to replace nuclear ones.

Darja Radic, Slovenia’s Economy Minister, said they won’t “give up its nuclear plans because of the accident.”

And the global sustainable electricity partnership of utilities from 12 countries just made this statement:

Top executives of many of the world's largest electricity companies today offered a collective statement on nuclear energy, saying its limitation threatens to raise the cost of electricity significantly, reduce the world's ability to lessen greenhouse gas emissions and undermine the reliability of power supplies.

Perhaps maybe Mr. Jungjohann and other German folks should think a little bit harder about a decision that could seriously affect their economy and environment. Sweden voted in 1980 to phase out the nation’s 12 reactors by 2010; ten of them still operate today. Time will tell.

In the meantime, look out for our last response to Grist’s anti-nuclear campaign later this week. It will delve into Paul Gipe’s post that claims “nuclear power is expensive and uninsurable.” 

The Return of Yucca Mountain

Color us surprised. The House Appropriations Committee unveiled yesterday its version of the Fiscal Year 2012 budget for the Energy Department with an unexpected line item. We’ll have more on the nuclear energy-specific aspects of the House budget tomorrow or Monday – there’s a markup of the bill later today that might shift some of the numbers around. It’s worth waiting to see how that turns out.

Anyway, here’s the surprising part:

The subcommittee's bill would increase funding in one area that DOE did not request. The Obama administration has sought to kill the long-planned Yucca Mountain nuclear waste repository in Nevada, and proposed no funding for the project. But that move has been attacked by Republicans in Congress, and the subcommittee proposed $35 million to continue work on the project, and would forbid DOE from using funds to close the project.

$10 million of this would be used to continue the NRC review of the license for Yucca Mountain submitted to it by DOE – the committee did not explain what the other $25 million covered – that might be up to DOE.

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But the decision to revive the used fuel repository might explain, at least in part, what occurred at a House Energy and Commerce Subcommittee hearing yesterday :

Chu didn’t testify, but one of his top aides did -- Acting Assistant Secretary for Nuclear Energy Peter Lyons -- and he got an earful from virtually every member who questioned him.

“Regardless of who the administration is, the abject failure to follow federal law here is most disturbing, and it’s unacceptable,” Representative Jay Inslee (D-Wash.) bellowed at an Energy and Commerce subcommittee hearing. “It’s unacceptable by any administration of any party.”

“Bellowed” is rather colorful for a news story, but it’s certainly true that Inslee was far from pleased. Inslee’s view is that stopping work on Yucca Mountain broke a provision in the Nuclear Waste Policy Act that specifically charges DOE with developing the Nevada mound as a national used fuel repository. Most of the other committee numbers who quizzed Lyons on Yucca Mountain agreed with Inslee.

Are they right? Decide for yourself. You can read the entire Act here. The provisions about Yucca Mountain begin on page 13 (20 on your pdf page counter).

So, at least for now, Yucca Mountain is back. This is literally the first step in the budget process following the President’s presentation of his Fiscal Year 2012 budget proposal, so there’s much more to come.

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We’ve had way too much fun scoring Germany for its ill-considered decision to shutter all its nuclear plants by 2022. Of course, that’s pretty much what you’d expect from any nuclear energy advocate – even if the case against closing the plants is very strong however you look at it. See, for example, the Washington Post:

The international Energy Agency reported on Monday that global energy-related carbon emissions last year were the highest ever, and that the world is far off track if it wants to keep temperatures from rising more than 2 degrees Celsius, after which the results could be very dangerous.

So what does Germany’s government decide to do? Shut down terawatts of low-carbon electric capacity in the middle of Europe. Bowing to misguided political pressure from Germany’s Green Party, Chancellor Angela Merkel endorsed a plan to close all of the country’s nuclear power plants by 2022.

The Post makes a list of why this is an awful outcome (I’ve adapted these – see the editorial for the full context):

• Renewables would have to generate an incredible 42.4 percent of the country’s electricity in 2020 to displace nuclear
• Germany’s move will result in about 400 million tons of extra carbon emissions by 2020, as the country relies more on fossil fuels
• Germany will likely import more power from its neighbors
• Germans will end up buying electricity generated in nuclear plants in nations such as France. [I guess we could call that the hypocrisy line item, but it would actually be helpful rather than hurtful.]

The conclusion:

Instead of providing a model for greening a post-industrial economy, Germany’s overreaching greens are showing the rest of the world just how difficult it is to contemplate big cuts in carbon emissions without keeping nuclear power on the table.

Indeed. The happiest face one can put on Germany’s decision is that cooler heads will prevail and keep at least some of the plants open – and that could happen - Germany has gone back and forth on this issue several times already. I wouldn’t be too surprised to see a few more hairpin turns in this story.

Ah, Yucca Mountain. It’s been awhile, hasn’t it? You look great!

Closing Up Shop in Germany

Here’s one way of looking at Germany’s decision to accelerate the retirement of nuclear energy facilities:

Shares in German power utilities E.ON and RWE AG fell sharply Monday after the government last night said it will accelerate the gradual phase-out of all nuclear power production by 2022 and keep a tax on nuclear fuel rods.

Though a drastic u-turn from a previous German policy settled in 2010, the 2022 phase-out was largely expected given the strong anti-nuclear shift in German politics after Fukushima. However, the decision to keep the nuclear tax in place and not give relief to the utilities was noteworthy after comments last week from some politicians that suggested the Germany might withdraw the tax.

Especially as the tax was considered an exchange for not closing the nuclear facilities early. But if there is a loss, there is a gain:

Meanwhile, shares in solar energy and wind power equipment makers gained sharply as investors anticipated the accelerated nuclear phase-out will result in faster expansion of alternative and greener energy sources. Shares in solar cell makers Q-Cells SE and SolarWorld AG, as well as wind turbine maker Nordex SE, closed the trading session sharply higher, posting gains of 8.5%, 8.8% and 13.3% respectively.

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A Wall Street Journal interview with AREVA’s Anne Lauvergeon gives her a chance to make a salient point:

Ms. Lauvergeon calls Germany's decision "political" and says the landscape can change "between now and 2022," when the last plant in Germany is scheduled to go offline. Germany last year accounted for around 10% of Areva's EUR9.1 billion in revenue. She says she is confident that emerging nations with booming energy needs, particular China, India and South Africa, will continue to invest in nuclear power.

Maybe Germany will change its mind - let's hope - but maybe not; in any event AREVA hasn’t really all that much to worry about:

The reaction to the Japanese nuclear disaster has varied. While Switzerland and Germany have decided to phase out nuclear power, countries such as Britain and Poland [not to mention the home territory of France] are sticking by the energy source. "The industry's future remains relatively healthy in growth markets," such as China, India and Brazil, wrote Will Pearson, an energy analyst at the Eurasia Group, in a report published Monday.

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But never let it be said that the decision doesn’t leave room for opportunity even within the nuclear sphere even if the impact on actual people is less than ideal:

[Jorma Aurela, top engineer at the Energy Department of the Finnish Ministry of Employment and the Economy and Mikael Ohlström, the leading energy expert at the Confederation of Finnish Industry,] say that Germany’s decision could lead to higher electricity prices in Finland.
      “The use of fossil fuels will increase in Germany at least temporarily. Germany will need more emission credits, whose price will rise when shortages emerge. This will raise the price in the whole EU”, Ohlström says.
      Aurela expects that Germany will have to buy electricity from other European countries, which will also raise prices.
      “Germany is a huge European country. Nordic players could be tempted to export electricity there at a good price”, Aurela says.

I would count this as vagrant musing – hard to know what’s going to happen in 2022 and beyond – but you can almost hear the Finns licking their chops.

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This is what the Finns are talking about, via Reuters:

Germany's plan to shut all its nuclear power plants by 2022 will add up to 40 million tons of carbon dioxide emissions annually as the country turns to fossil fuels, analysts said on Tuesday.

Well, remember, 2022, who really knows for sure. But what a political culture that aims to bring about this result.

Closing up shop: Herties Department Store in Berlin announces it end(e).

"A Sad Story for Climate Change"

This is from the sub-only Climate Wire:

"I think CO2 emissions will increase tremendously in the next decades because more and more countries will use more coal like Germany. And that's a sad story [for] climate change," she said.
 

She is Claudia Kemfert, an energy economist at the German Institute of Economic Research in Berlin, so she knows her lumps of coal from lumps of uranium.

Another germane quote:

"We lack the necessary power lines to transmit wind-generated electricity from the north," said Johannes Teyssen, CEO of energy company E.ON. "This could lead to massive problems in the grid, even power outages."

Just gets better and better in Germany, doesn't it?

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Meanwhile:

The Point Beach nuclear plant will be allowed to expand its power output by 17% this year, the Nuclear Regulatory Commission announced Tuesday.

Point Beach is in Wisconsin.

NextEra spokeswoman Sara Cassidy said Tuesday the expansion will increase total output by 170 megawatts, or enough to supply an additional 85,000 homes.

Or a bunch of hybrid cars.

The environmentalist in this story, Katie Nekola of Clean Wisconsin, tries a novel approach.

"It makes no sense that NRC rushed to approve the Point Beach expansion before completing their Fukushima safety review, especially when Wisconsin doesn't need the power,"

Odd argument, as environmentalist are usually pretty concerned about the future - and it's hard to deny we'll need more electricity generation sooner rather than later. Getting ready for it scarcely seems a bad idea.

Maybe Germany would like some of it in the meantime (if that were possible, of course.)

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And:

Standard & Poor's expects new nuclear projects being planned by Georgia Power and South Carolina Electric & Gas to proceed with "few material delays," the ratings agency said in a report released Tuesday.

Read the whole thing for more. This is about Vogtle (in Georgia) and Virgil C. Summer (in South Carolina).  I was a little puzzled by the timing of this report, but it seems recent enough to take account of Japan and the NRC's subsequent safety review:

The "primary challenge" for the utilities will likely be any design changes mandated by the US Nuclear Regulatory Commission following a review of lessons learned from Fukushima, S&P said.

Fair enough.

Point Beach by moonlight.

Exelon and Constellation Merge; E.ON; Japan

Here's the news, via World Nuclear News:

Exelon and Constellation Energy have announced a $7.9 billion merger. Under the name Exelon, the resulting firm will be America's largest generator of nuclear power by an even greater margin. 

A definitive agreement posted today will see a stock-for-stock transaction combine the two companies. The new firm wants to take advantage of Exelon's large low-carbon generation fleet and Constellation's customer-facing business. 

The CEO's of the two company's, John Rowe of Exelon and Mayo Shattuck of Constellation, and Exelon's COO Chris Crane, held a press conference about this a little earlier today, so there'll be more on this later. 

Exelon is headquartered in Chicago and Constellation in Baltimore; the former has full or majority share in 17 nuclear reactors at 10 sites while Constellation Energy nuclear Group operates operates five reactors at three power stations - Maryland's Calvert Cliffs and New York's R.E. Ginna and Nine Mile Point.

Stay tuned.

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Over in Germany, E.ON's chief Johannes Teyssen tries to make the case for nuclear energy while not getting sticks thrown at him:

Speaking at a televised session of a commission to evaluate ethical questions related to atomic power generation, Teyssen said nuclear energy should be regarded as a "bridge technology" to help the country's transformation to a low-carbon, renewable energy supply.

"Germany unconditionally...needs to retain its ability the achieve its internationally binding climate protection commitments," Teyssen told a panel of energy experts from industrial companies, utilities, scientists, energy associations and non-governmental groups.

Meeting Germany's climate protection goals--which include a 40% reduction of carbon dioxide emission by 2020 compared with 1990 levels--will be impossible if all of Germany's 17 nuclear reactors "were to be switched off by the end of this decade," Teyssen said.

So true. E.ON has energy interests throughout Europe, though it is headquartered in Dusseldorf. 
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Some news about Fukushima Daiichi, via NHK:

The operator of the troubled Fukushima Daiichi nuclear plant in northeastern Japan has reassessed its estimates of fuel damage in reactors No.1 to No.3.

Tokyo Electric Power Company on Wednesday announced new estimates of damage after the country's nuclear safety agency questioned the accuracy of the initial assessments. The utility has revised the estimated fuel damage in the No.1 reactor from 70 percent to 55 percent, saying radiation levels were not correct.

TEPCO also says that it acted inappropriately in excluding fuel damage of less than 5 percent in calculating total damage ratios for the No.2 and No.3 reactors.

E.On's Johannes Teyssen. The company color is orange, so you'll often see him posed against this kind of backdrop.