May 14, 2013
Germany’s ‘Energiewende’ Shows Why We Need Nuclear
Renewables Can't Go It Alone
There’s little doubt that Germany’s impressive ‘Energiewende’ has been instrumental in driving down balance-of-system costs and promoting innovation across the electric power sector. But the successful lowering of costs of its renewables program does not prove that wind and solar are fully scalable and disruptive as some environmentalists claim. We still need to consider the full range of low-carbon energy sources, including nuclear power.
Germany’s massive investment in distributed and renewable electricity, known as the Energiewende (energy transition), is often heralded as the shining example for climate change action. Many use it as evidence that wind and solar photovoltaics are mature, scalable, off-the-shelf, cost-effective, and market disruptive technologies. Germany's impressive wind and solar deployment in recent years has been used by activists in the environmental community, as well as governments, to argue against the need for investment in other zero carbon energy sources, particularly nuclear and other centralized forms of energy.
There’s little doubt that Germany’s renewables programs have been instrumental in driving down balance-of-system costs and promoting innovation across the electric power sector. The cost of installed solar PV in Germany is less than half that in the US because of greater efficiencies in the supply chain, labor, and permitting processes. The rapid deployment of variable electricity has encouraged Germany’s largest electric power utility to invest in electricity storage innovation. Germany should be commended for these achievements.
But the success of Germany’s Energiewende at lowering costs and promoting innovation does not prove that wind and solar are fully scalable and disruptive, as Bill McKibben, Amory Lovins, other climate activists, and even government representatives have claimed.
Nor do Germany’s achievements mean that we can rely primarily on wind and solar to decarbonize the electricity supply in a timely manner. In a world that just shot past 400 parts per million CO2 and is fast approaching 450, we need to consider the full range of low-carbon energy sources, including nuclear power, one of the only commercial, cost-effective, emissions-free, and baseload technologies available.
For starters, despite what some have argued, nuclear power remains one of the least expensive low-carbon energy options available – comparable to large hydroelectric, geothermal, and biomass on a levelized cost basis without subsidies, and far cheaper than solar PV and offshore wind.
According to an analysis by the Breakthrough Institute, Germany’s current installed solar panels will end up costing ratepayers $130 billion over the next 20 years through above-market-rate feed-in tariff contracts, compared to $15 billion for a state-of-the-art nuclear reactor that will generate over half the electricity of Germany’s entire solar fleet over a similar 20-year period.
The Breakthrough Institute’s analysis considers an advanced reactor that’s under construction in Finland by the French company Areva. The new design, known as a European Pressurized Reactor (EPR), is the first of its kind and dramatically safer, more reliable, and more efficient than most existing nuclear reactors around the world. But like many new reactors, Areva’s EPR has been labeled as an uneconomical boondoggle and a massive subsidy for a dead-end technology.
As the analysis finds, even with the construction delays and huge cost overruns, the reactor in Finland will still provide electricity to the grid at a fraction of the cost of Germany’s current solar fleet. And while the Areva project is over-budget and behind schedule, the second, third, and fourth builds in France and China have so far been more successful, learning from the first build and allowing for more predictable costs and construction timelines.
Solar and wind power will continue to come down in price, thanks in no small part to Germany’s ambitious Energiewende and other policies which support the continued manufacture and deployment of renewable energy. But it will be some time before a technology like solar PV can compete on a per-kWh basis with nuclear power.
The largest advantage of nuclear power is its ability to provide reliable, baseload power year-round 24 hours a day. Solar and wind can be economical as distributed energy resources, whose greatest value is suppressing demand load on the grid. But nuclear power provides baseload power and will therefore be the most technically optimal replacement for large fossil-fueled power stations like coal plants.
By taking low carbon baseload electricity off the table, Germany has restricted its options to replace its fossil fueled fleet, which currently supplies 70 percent of its electricity needs.
The case for nuclear is even stronger in developing economies like India and China, which have plans to build one thousand coal plants in coming years, where urban energy demand could double or triple by mid-century, and where there may not be a high willingness-to-pay for costly solar and other renewables. It would be foolish – and likely very expensive – to limit the options to renewables alone and not to include nuclear power.
In the late 1970s and 1980s France made a strategic decision to meet growing energy demand by expanding its nuclear power industry. In the 1980s France’s CO2 emissions declined by some 30 percent and have remained low ever since, marking one of the fastest low carbon energy transitions in history. France relies on nuclear power for 80 percent of its electricity demand and has lower per capita CO2 emissions than most industrialized nations, including Germany (by about 30%).
Therefore it is strange that the President of Germany’s Federal Environment Agency recently expressed bewilderment at the expansion of nuclear in other countries around the globe, arguing that Germany’s Energiewende proves that nuclear is unnecessary.
In a post on the Rocky Mountain Institute website, activist Amory Lovins writes that “simply repeating [Germany’s] 2011 renewable installations for three additional years, through 2014, would displace Germany’s entire pre-Fukushima nuclear output.” But Lovins makes a basic mistake of not accounting for the fact that solar and wind only operate when the sun is shining and the wind blowing. Some basic math shows that it would take at least 10 years to replace the output of Germany’s pre-Fukushima nuclear fleet with wind and solar, but even then you would still need fossil-fueled plants for back-up power.
Hitting 400 parts per million atmospheric CO2 could have been a rallying call for climate activists to embrace a diverse range of technologies in the fight against climate change. Instead we’ve seen a doubling down of technology tribalism, embodied in statements like the one above from Amory Lovins. Germany’s energy transition has been used by activists and governments as evidence that we can solve climate change with wind and solar, and that we don’t need nuclear power. But in a world fast approaching the dangerous climate threshold, we can’t afford to make such misinformed assumptions, nor leave nuclear power off the table.
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IN THE NEWS
Editorial, "Don't Give Up on Nuclear Just Yet," September 5, 2013
Ashutosh Jogalekar, "Nuclear vs. Renewables: A Tale of Disparaties," August 22, 2013
Editorial, "The End of Clean Energy Subsidies?" May 5, 2012