No nukes: A government meltdown in Europe

Here are the facts: After the earthquake and the tsunami in Japan, which hit Fukushima and caused the worst-case scenario in a technically top end nuclear power nation, Germany pulled the plug. Sure, there had been worst-case scenarios before. Like there was in 1986 in Chernobyl, Ukraine. Even the United States had already faced a severe accident in one of its nuclear power plants located at Harrisburg, Pennsylvania, in 1979.

But those plants were different. It was only after Fukushima that the argument which used to be upheld in Europe’s largest member state, that nothing could go wrong due to Germany’s high technical standards in nuclear energy, was no more valid. Fukushima was a high-end technology plant. This was kind of a German reactor. And it blew up. Nothing more to say.

Actually, Fukushima only speeded up an ongoing process in Germany and other parts of the EU. A nuclear phase-out law had already been passed by the former German center-left Social Democrat-Greens government of Gerhard Schroeder in 2002. The law stated that all German nuclear power plants were to be shut down in 2021. Back then the opposition, especially the current governmental Christian-Democratic-Union Party, announced it would reverse this law as soon as it gets to take over governmental responsibility after the next election. Consequently, last August, German Chancellor Angela Merkel then spoke out her plans of extending the use of nuclear power plants, saying it would be reasonable if they could run for another 10 to 15 years.

Then came Fukushima. And a swing in the Merkel government’s position. But knowing Merkel’s politics means no more believing in any higher motivation for that. In fact, it was pure election analytics and populism: The nuclear energy issue had helped boost the German Greens to an all time high. They even captured control of one of the CDU’s German stronghold states, Baden-Wuerttemberg, in an election in March. The CDU lost this state for the first time after the Second World War. Merkel’s majority in the “Bundesrat” upper house vanished last year after the CDU lost the election in North Rhine-Westphalia, Germany’s most populous state. And now a Socialist-Green coalition could easily win an absolute majority in Germany by tomorrow. All this is a damage to Merkel’s authority. And the only political interest of Merkel is Merkel.

But sometimes in politics the right things happen for the wrong reasons. It might well be that the selfish “Merkelism” is doing good without wanting to. Ending the age of nuclear energy security will give a world leading technology nation like Germany the kick-start for a new energy future. Probably the renewable energy targets Obama announced for the US will rather become a German reality now. And there is also a business plan in that, since as a market leader and trendsetter the new German technology will create a sales hype in all the other countries which will follow – either because those governments see the economic and environmental benefits, or are being forced by their peoples to end the “age of nukes”.

However, it is not clear how Germany wants to compensate its energy shortfall after shutting down its nuclear plants. Germany might be one of the world’s leading solar photovoltaic (PV) energy producers, with a solar capacity of almost 17GW, 40,000 employees and a 2% electricity market share. In 2010, the country set a world record for installations of solar PV in one year. But since resources like wind and solar are intermittent it can’t be a complete replacement for nuclear energy or fossil fuels yet.

European energy traders report that Germany is already making up for its energy shortfall by importing lignite coal from Poland and nuclear power from France. According to the EU’s Energy Commissioner, German Guenther Oettinger, Germany also needs more gas. Apart from that, Germany might be running into trouble with the EU’s CO2 emmission targets. Those calculations were largely based on CO2 free nuclear energy.

The decision to shut down also faces strong opposition from RWE, E.ON, Vattenfall and EnBW, the utility companies that run the 17 German nuclear plants. RWE already brought a lawsuit against the 3 months suspension of the power plant in Biblis in the state of Hessen saying the suspension was done without any legal basis. Furthermore, the shut down creates a problem for the state budget. The nuclear energy tax was expected to raise 2.3 billion euros (US$3.29 billion) a year. With the current immediate shutdown of eight plants, however, it will raise less than envisaged. And if this means higher taxes for German taxpayers all the populistic games of Merkel might prove useless in the end. That’s how voters are.

So, Fukushima might bring along a couple more government meltdowns in the EU.

Dr. Andreas Geiger is managing partner of Alber & Geiger, a leading European Union government relations law firm in Brussels and Berlin.