Energy Change Plans in Germany

Germany passed a plan last year to shut down all nuclear plants by 2022.  Not that Germany had built a new plant in many years; like the U.S. the nuclear plants are older.  There has been a strong anti-nuclear movement in Germany since Chernobyl.  But, plans for the change are behind schedule. Part of the reason may be that the euro crisis has consumed so much time of the government leaders.

The plans include a much greater reliance on renewable energy. The goal is 50% of energy produced by renewable sources by 2030.  This is mostly wind power generated mostly by turbines in the North Sea.  But much of industry is in the southern part of Germany so a new network of power lines are needed.  This will requires an investment of $25 billion over the next decade.  This process has been slowed by paperwork and regulations in the various German states.  Also, farmers are demanding more money for the land taken for the power lines. As a spokesman for the German Farmers Federation notes--land is limited.

For those who are concerned about global climate change, nuclear power is a good option to replace coal plants, but the Green Party in Germany is also very anti nuclear.  But relying so heavily on wind power presents problems too.  Since electricity cannot be stored, what happens when the wnds are down?  Another problem is that there is power loss as the electricity flows through power lines, so the further the power has to travel, the greater the loss.

After the earthquake and tsunami in Japan hit last year, Warrren Buffet said that many died in the tsunami and few will die from the troubles at the nuclear power plants. But, people will still build homes on the coast but nucelar power will be killed.  At the time I heard him say this, I thought he was right. I still do.

Energy in Germany

There are two interesting articles in today's business section of the German newspaper, DIE WELT. One concerns the high price of gasoline and that the antitrust division (Bundeskartellamt) is looking into collusion among the top five firms in Germany. The price of a liter of gasoline is 1.62 euros. With an exchange rate of a little more than $1.40 per euro and with 3.785 liters per gallon, it works out to $8.60 a gallon. Now, this is for premium and not regular. According to the article, this is the highest price ever in Germany.

The second article concerns a warning from electric utility firms that there may be blackouts in southern Germany this winter. The winter is prime time for electricity for a variety of reasons--short hours of daylight, cold weather, and southern Germany is highly industrialized so large demand from industry. Why this winter? After the problems with the nuclear power plant in Japan, Germany has put its older nuclear plants off line and are giving stress tests of some kind on others. The utility companies are saying that too much capacity will be off line if all this happens, and blackouts could result. An option that some think is possible is to import electricty from France, but France is a net importer in the winter.

Representatives of the Green Party dismiss the concerns. One represtative said that there are no bottlenecks and another that it is their view that there is not a problem. The article also reports that Alcoa has recently announed that they will not expand production facilities in Germany because they consider Germany's energy policy to be too risky.