CEI - Competitive Enterprise Institute

10/09/2024 | News release | Distributed by Public on 10/09/2024 07:54

Germany is smug about its energy errors

Photo Credit: Getty

A tweet last week from the German Foreign Office doubled down on the country's failing approach to energy.

Germany decided to shut down its 17 nuclear reactors after the Japanese earthquake and Fukushima nuclear accident in 2011. The first reactors were shut down that same year and the shutdown process culminated in the closure of the final three reactors last April.

The German government's continued attitude toward these shutdowns and their move away from fossil fuels is divorced from the problems that the decision has created. Electricity prices in Germany spiked during the height of the Ukraine war when the loss of access to Russian gas was fresh, and the peak price at the height of the spike was 469.35 euros per megawatt hours in August of 2022. Prices have settled down since but are still way up from a few years ago, with an average monthly wholesale price of 53.33 euros per megawatt in May of 2021, and a price of 77.28 euros per megawatt in May of 2024. This is a huge cost increase for both regular households and industry to bear. These price increases make sense given that Germany is producing less power than it was a few years ago.

Germany should be thoughtfully reconsidering the set of decisions that led them to this point. Instead, we get cheeky tweets like this one from the German Foreign Office following the US Presidential debate, "Like it or not: Germany's energy system is fully operational, with more than 50 percent renewables. And we are shutting down-not building-coal & nuclear plants. Coal will be off the grid by 2038 at the latest…"

At its peak, more than 22 percent of German electricity came from nuclear. The choice to shutter this generating capacity because of unscientific anti-nuclear sentiment has had and will continue to have consequences for the country's electrical grid.

As proud as the Foreign Office is about their "more than 50 percent renewable" electrical grid, those renewables are largely intermittent, and that intermittency requires backup generation from their much-hated gas and coal plants in order to provide power at the times that people need it.

But Germany's renewable energy is not what has buoyed the country through its nuclear phaseout. Much of that gap has been filled by imports from neighbors. Immediately following the closure of the country's last three nuclear units in April last year, imports shot up from just over 4,000 Gigawatt hours per month in March 2023 to nearly 7,000 Gigawatt hours that June, a significant jump.

Germany generated less power in the first half of 2024 than in the same period of 2023. This is despite the fact that 2023 represented a huge decrease in power production from 2019 (pre-pandemic and Ukraine war) and when the country produced 608 billion kWh, compared to 514 billion kWh in 2023.

Germany imports power from several of its neighbors. Among these, France provides the most significant imports with net imports standing at 6.3 Terawatt hours for the first half of 2024, but Germany also consumes net imports from Denmark, Switzerland, Norway, Belgium, and Sweden.

The greatest irony of Germany's nuclear phaseout is that it has been made possible by imports of power from its neighbors, including France which has a mostly nuclear electrical grid. Germany closed its own nuclear power plants out of misplaced fear but relies on France's to keep the lights on.

Overall, the bragging from Germany's Foreign Office is simply misplaced here, as the German power grid is a far cry from being the envy of the world. In this day and age, power production is a useful proxy for what a country is able to do. It is one of the resources that allows everything else to work. A country that is intentionally producing less electricity is one that is voluntarily harming its own economy. German citizens are the ones who will suffer from decreased power production, and they are continually being misled by policymakers about what the implications of that will be.

A version of this article first appeared on Catalyst.

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