Germany Strengthens Nuclear Future by Extending Lives of Power Plants

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Written by Martin Lynch, European News Editor for Industrial Info (Galway, Ireland)--Germany's coalition government has approved a new national energy plan that includes extending the lives of the country's nuclear power plants.

The ambitious plan also calls for increased government support for the rollout of offshore windfarms; upgrading the electricity grid; and a pledge that Germany will generate 80% of its electricity from renewable sources by 2050. In 2009, that figure stood at 16%.

"I admit, our targets are ambitious," said Chancellor Angela Merkel, announcing the plan. "The most important element is that we will invest more in renewable energy than any other federal government in the past."

The final version of the energy plan, proposed at the beginning of September, has been agreed upon and will see 17 nuclear power plants receive an average lifetime extension of 12 years. Energy companies will pay heavily for the extension, however, through a nuclear fuel-rod tax, which will see them pay 2.3 billion euros ($2.9 billion) per year between 2011 and 2016. They also will pay an additional 300 million euros ($381 million) each for two years, followed by 200 million euros ($254 million) a year until 2016, for the government to spend on renewable energy projects. For additional information, see September 12, 2010, article - Germany Throws 14-Year Lifeline to Nuclear Power Plants.

Germany's 17 plants, which generate approximately 23% of its electricity, were due to be closed by 2021 following an anti-nuclear phase-out law imposed by a previous government in 2002. The plants are owned and operated by E.ON AG (OTC:EONGY) (Dusseldorf, Germany), RWE AG (OTC:RWEOY) (Essen, Germany), Vattenfall AB (Stockholm, Sweden) and Energie Baden-Württemberg AG (EnBW) (Karlsruhe, Germany).

E.ON supports the plan, despite the high price that it will have to pay on the nuclear front.

"The energy plan outlines a step-by-step transition from today's mainly fossil-fuelled energy supply to a low-carbon future, based mainly on renewables," said Johannes Teyssen, Chairman of E.ON. "This is extremely ambitious, and the German government has rightly pointed out that this can only be achieved with a stable global and European framework. Changing our energy model will not take place automatically, and it will not be free of charge."

However, Teyssen believes the energy plan has undervalued the role of natural gas in heating and gas-fired power plants.

"The future projections on which the plan is based significantly underestimate the role of natural gas," he argued. "There is scarcely any energy source so well-positioned to keep a balance between reliability, economics and environmental, and climate protection as natural gas. The significance of natural gas in the German energy mix will not decline, but continue to grow over the coming decades."

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