Can Germany Afford To Turn Its Back On Nuclear And Still Meet Its Co2 Emission Reduction Promises

Since Fukushima Germany made the decision to move away from nuclear energy and reduce its nuclear capacity. It has powered down eight out of its 17 nuclear reactors reducing its total nuclear capacity by 41%.

Furthermore in April this year German cut the subsidies to solar power plants. Previously the economics of investing in these plants brought returns of between 10-13% and as such resulted in the rapid expansion of solar capacity. The guaranteed price solar power producers receive for their electricity is funded by a renewable energy surcharge paid by the electricity users. This implies that the more capacity that is built the more solar energy has to be bought and the more customers will have to pay. This renewable energy surcharge already adds as much as 3.5 cents per KWh to a German electricity price that is already one of the highest in Europe. These planned subsidy cuts are to hold growth in capacity to less than 3,500 MW a year. This again would appear to reduce Germany's ability to meet its CO2 emissions targets.

Added to this when we looking at Europe as a whole we see there has been a drop in electricity demand due to a cut in output at many industrial facilities and this has had an interesting effect on the EU Emissions Trading Scheme (ETS). The recession has pushed down emissions in the sectors covered by the ETS resulting in a glut of emission permits. This glut has caused the permit price to slump as low as 7 Euros per metric ton of CO2 emitted. This in turn has increased the profitability of coal-burning power stations and a resultant increase in power generation from these. This is particularly true in Germany where coal fired power generation in 2012 is expected to be 13.5% higher than 2011 levels.

So what does this mean for Germany's planned CO2 emissions reduction? This reduction in nuclear capacity could have helped reduce the countries emissions by as much as 21% from the 2008 level. While coal remains the most profitable option the German emissions could increase by about 6% from 2008 levels.

Reference: energy-saving-technologies.blogspot.com