Merkel’s decision to phase out nuclear power has been a huge mistake
Angela Merkel has long been admired as Europe’s most sure-footed politician, one who has helped Germany take its place as the EU’s economic powerhouse. But not all the German chancellor’s domestic policy decisions have been without fault. As her country’s economy shows signs of faltering, a spotlight should be thrown on what is arguably the most ill-judged decision of her eight years in office: the phasing out of nuclear power from Germany’s energy mix.
For decades, the German people have been among the world’s most environmentally conscious. The strongest sign of this has been the commitment of successive governments to Energiewende – or “energy change” – designed to make the economy predominantly dependent on renewable sources such as wind and solar power. Renewables today account for 23 per cent of electricity production, a figure set to rise to 65 per cent by 2035.
This emphasis places burdens on households and businesses. The cost of the subsidies offered by the German government to green energy producers is passed on to consumers. Domestic energy bills are 48 per cent higher in Germany than the European average. Germany’s Mittelstand companies are even worse off. Their costs are twice the level facing their US rivals, many of whom benefit from cheap shale gas. As the economy slows, this is a price that Germany can ill afford.
Scrapping the country’s nuclear power stations will make an already difficult situation even worse. Ms Merkel took the decision following the 2011 nuclear accident at Fukushima. Bowing to voters’ concerns, she abandoned her usual caution and acted hastily. But there have been two big costs for German energy policy.
First, the closure of those reactors means Germany is burning more coal to meet its energy needs. Because the electricity generated from solar and wind sources is intermittent, Germany would always have been forced to rely on fossil fuels to provide back-up. But removing nuclear power, which accounts for nearly a quarter of electricity generation, means coal consumption has soared. Germany will end up opening nine coal power plants between 2010 and 2015. Last year, its coal-based electricity production rose to its highest level since 1990.
Second, Germany’s anti-nuclear policy makes it ever more reliant on imports of Russian natural gas. Rising tensions with Russia over Ukraine makes this an uncomfortable position. If Germany and its allies are to stand up to President Vladimir Putin’s aggression they need to make themselves less dependent on Russian gas. By hollowing out nuclear energy production, Ms Merkel makes this harder to achieve.
Germany is unlikely to change this policy soon. Although the Green party does not form part of the ruling coalition, popular sentiment on environmental issues remains intense across the country. The recollection of the nuclear accident at Chernobyl in 1986 haunted many older German voters. But Germans need to engage in a more honest debate on the issue.
The paradoxes of Germany’s energy policy are impossible to ignore. This is a country committed to reducing CO2 emissions but which is building more coal power stations. It does not see much of the sun but has pinned much of its future on solar power. It is closing down its well-run nuclear power plants yet relies on nuclear energy imports from neighbouring France.
Ms Merkel may still be Europe’s most powerful politician. But on energy policy, she has saddled her country with a costly muddle and needs to rethink Germany’s approach.