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As a general rule, the most successful man in life is the man who has the best
information
The
International Energy Agency (IEA) has recently warned us the world will face higher energy costs, higher carbon emissions and greater uncertainty over security of energy supply if it turns its
back on nuclear power.
The IEA believes the future for nuclear
power, and a subsequent reduction in carbon emissions, will be show cased in China, India and Russia. Out of the 62
reactors currently under construction, 48 – or 77% of the total
– are being built
in China, India, South Korea
and Russia, another 82 reactors are planned and 210
are proposed for these
four markets.
China is the world’s largest consumer of coal, India produces more than 70 per cent of its electricity by burning coal and Russia mainly uses natural gas for electricity generation. A reduction in all three countries carbon footprints could be reached by switching a lot of fossil fuel generated power to nuclear as nuclear power's life-cycle emissions range from 2 to 59
gram-equivalents of carbon
dioxide per kilowatt-hour
while emissions from natural gas fired plants range from 389 to 511 grams and coal produces 790 to 1,182 grams of carbon dioxide equivalents per
kilowatt hour.
In 2002, Germany enacted a law to phase out nuclear power, but the current government, led by Chancellor
Angela Merkel decided (just last autumn) to extend the lifetimes of the country's reactors by an average of 12 years. This was based on the judgment that Germany would not be able to meet its power demand using only natural energy sources - wind and solar power - and would not be able to meet the governments ambitious goals of
a 40% reduction in carbon
emissions by 2020 burning
more coal and natural gas.
Merkel has consistently
said that Germany has to remain a net exporter of energy, repeatedly stressing that there is no point closing German nuclear plants only to import nuclear power.
In 2010 Germany was a net exporter of power to
France, sending 16.1 terawatt
hours to the country compared
with imports of 9.4 terawatt
hours.
Then, playing
populist politics and
over reacting to the partial meltdowns
in Japan’s Fukushima Daiichi
nuclear complex Merkels government immediately shut down almost half of the countries nuclear power and is closing the remainder in stages
- the last reactor is to be closed in
2022. Germany, overnight, decided
40 percent of its nuclear
power capacity will be shut down and removed 8,800 megawatts (MW) from the grid, the remaining 12,700 MW of nuclear supplied electricity will be gone by 2022.
Before the Merkel
government shut down 40
percent of Germany’s nuclear
power plants Germany had been an energy exporter. Not anymore,
DIE WELT reports:
”Before and after
the moratorium – as is usual
for this time of the year
– between 70 and 150 gigawatt-hours were exported.
After switching off the German nuclear plants, that surplus disappeared. Since then 50 gigawatt-hours have been imported. The
power coming in from
France and the Czech Republic
has doubled and exports to Holland have been cut in half”
In April 2011,
France was a net exporter
of power to Germany for the first time since the summer months of June, July and August 2010.
This author would like to suggest the real proving grounds for nuclear
power will not only be in China, India and Russia as the IEA predicts, but
will also - and give us much more immediate results - be in Germany and the European
Union.
The IEA says Germany faces a big
challenge to achieve its
goal of replacing a significant
part of its nuclear power
generation with wind and solar. The Breakthrough Institute says that renewable energy sources would have to generate 42 percent of Germanys
electricity in 2020 in order to replace 21,500MWs of nuclear
power.
Germanys Green Power Quick Start:
- The Federal
Electricity Feed Law
(StrEG) of 1991 compelled
public utilities to purchase renewable generated power from private producers on a yearly fixed basis
- The Market
Incentive Program (MAP) was
introduced in 1999.
MAP offered government
grants totaling 203
million Euro in 2003 for the commercialization and deployment
of renewable energy systems
- The Feed-in
Tariff was introduced into the solar industry - the tariff gives producers of solar electricity a guaranteed price for the energy they supply to the grid. The price is set for 20 years and that price is considerably higher than the price paid for fossil fuel electricity
(more than double). The Feed-in
Tariff is open to both commercial solar
providers and householders who
connect their own solar panels to the
national grid
Recently the German
government has been lowering
feed-in tariffs, and solar power, much pricier than wind, has seen steep cuts in incentives. Germany also plans
to slash subsidies paid to households
generating electricity by
up to 15 percent - six months earlier
than planned.
Germanys wind
power generation is concentrated in the northern
parts of the country. For Germany to supply its southern region with electricity
from wind power in the north the country would have to
build more of those giant offshore windmill parks in the North Sea and that means a massive financial commitment to not only upgrade the existing grid to handle such diverse, spread out power
but also building massive transmission lines to cross the country and deliver
that power.
Many green organizations are against the
transmission lines and offshore wind
park construction has been held
up for a year because of environmental issues.
In any event offshore power generated by windmills in the North Sea would
be much more expensive than French or Czech nuclear generated power which is readily available
to southern Germany (where
most of the shutdown reactors were located).
Chancellor Merkel has forsaken Germany’s much needed nuclear contribution
to developing a sustainable,
environmentally friendly energy policy. Unfortunately she’s created not just a German problem but a European one as well:
- Germany will
import more nuclear generated
electricity from its neighbors, France and
the Czech Republic
(and more coal and oil)
and will also have
to import more natural gas
from Russia, which makes the country even more dependent on
Moscow for its energy
supply
- Germany’s new need
for NG, coal and oil
will push up energy prices for the rest of the
EU - higher electricity
costs will also project into the prices of
consumer products. German
and other EU consumers
will see sharp increases in their energy bills as
Germany is forced to
import more electricity and pay for fossil fuels to generate electricity
in-country while already
built nuclear reactors sit idle and are decommissioned
- Germany’s unilateral
decision will impact
the competitiveness of not only
German industry but
of the rest of Europe’s
as well - which is already under pressure from an overvalued currency
- Germany’s unilateral
decision shows a glaring
weakness of Europe - the absence of a common energy policy
- Donald Tusk,
Poland’s prime minister
announced Germany has put coal
fired power “back on the agenda.” European financial analysts estimate that Germany’s move will result in about 400
million tons of extra carbon emissions by 2020
- Germany has just
demonstrated that their EU leadership role takes a backseat to domestic populist politics
Conclusion
A team of German academics, led by physicist Manuel Frondel, in a 2009 report concluded
the following regarding Germany’s record with renewable energies:
Germany’s conversion to green energy imposed “high costs without any of the alleged positive impacts on emission
reductions, employment, energy security, or technological innovation...The government’s
[subsidies] have in many respects subverted these incentives, resulting in
massive expenditures that
show little long-term
promise for stimulating the economy,
protecting the environment,
or increasing energy security.”
The Frondel report also found that far from creating the much publicized tens of thousands of jobs -
“the net employment balance is zero.”
Why such
a huge gap between the blue sky green promise of renewable energy and the
reality of performance? Germany’s table pounding champions of green energy
didn’t calculate
the lost opportunity costs of the massive subsidies that
are handed out and guaranteed
for 20 years to the solar
and wind energy sectors - by 2008, Germany’s
worker subsidies had reached the incredible amount of US$254,000 per solar energy job.
While Europe’s
carbon trading system was pricing carbon
at $19 a ton, the subsidy
inflated cost to the German public stood at $80 a ton for wind energy and a staggering $1,000
a ton for solar.
“Although Germany’s
promotion of renewable energies
is commonly portrayed in the media as a ‘shining
example’ ... for the world, we should instead
regard the country’s experience
as a cautionary tale of massively
expensive environmental
and energy policy that is devoid
of economic or environmental
benefits.” Frondel
report
Renewable energy
now provides 15 per cent
of the Germany’s electricity
– the question Germans should
be asking their government, and themselves, is: Can we afford to increase our production of
green energy electricity from 15 per cent to over 40 per cent in just 11 years while we phase out nuclear power?
The path the country will be compelled to take is to import more and more
electricity – either
in the form of nuclear
power from France and the Czech
Republic, coal from Poland or natural gas from
Russia. Going down this path has consequences that reach, as we have seen, far beyond Germany’s borders.
“It’s hard to see
how they will replace the
energy. I’m not
sure there is enough Polish coal, and it creates carbon problems. Alternative energy
sources are intermittent sources. I think they will do what Austria did in its time: import nuclear electricity from neighboring countries.”
Anne Lauvergeon, chief executive officer Areva SA
This is a truly interesting
drama being played out in real time on the world stage for all to see. It should be on everyone’s radar screen. Is it on yours?
If not, maybe it should
be.
Richard Mills
Aheadoftheherd.com
If you're
interested in learning more about the junior resource market please come and
visit Richard at www.aheadoftheherd.com. Membership is free, no credit card or personal
information is asked for.
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