[cdn-nucl-l] Germany and the WEC on nuclear power

["Jim Muckerheide" <jmuckerheide@cnts.wpi.edu>]

Friends,

This report is from the Frankfurter Allgemeine Zeitung, Sept 10, 2004

Regards, Jim Muckerheide
========================

Not enough juice to keep German industry growing

World Energy Council says government's energy policy may come up short when
competition for resources heats up

By Elise Kissling

In 20 years, windmills may generate more electricity than nuclear power
plants, but Germany may not have access to the energy it needs for its
industrialized economy, according to Gerhard Ott, chairman of the World
Energy Council's German committee. That, he says, is because the government
is pursuing a misguided policy that focuses one-sidedly on conservation in
an environment where rising demand will intensify the competition for scarce
natural resources.

Chancellor Gerhard Schröder's Social Democrat-Greens coalition was swept to
power in 1998 on the promise to phase out nuclear energy, limit consumption
of fossil fuels and subsidize alternative energy sources. For businesses and
private customers, this recipe has spelled stifling energy prices. But
beyond high prices, which are choking the domestic economy, the World Energy
Council says the government's strategy will not guarantee Germany the energy
it needs to keep growing.

Germany ranks No. 5 in energy use behind the United States, China, Russia
and Japan. Like most EU countries, Germany is highly dependent upon energy
imports, especially of oil and natural gas. This dependency on imports, 61
percent in 2001, will increase in the future, with Russia as the main
source. “Security of supply, therefore, is a serious concern and a
challenge, for which the answer can only be diversification of supply
sources,“ says the WEC's Ott. His motto: “Keep all energy options open!“

Germany has done just the opposite. It began phasing out nuclear energy, a
clean and cheap source, shortly after it took office in 1998. And it is
pumping taxpayer euros into wind power and other “alternative“ energy
sources, artificially boosting demand for these expensive forms of power.

At the same time, energy taxes are high. They account for 41 percent of the
price for electricity and 47 percent of the price for gasoline. And the
market is distorted, especially through subsidies and quotas favoring
renewable energies. As the Green party gains strength and the Social
Democrats fall out of favor, these tendencies will become even stronger. Ott
says that this is putting at risk “the principal task of any energy policy,
namely to secure and to maintain balance among the three elementary factors
of security of supply, environmental acceptability and competitiveness.“

The World Energy Council forecasts a strong jump in energy demand in
fast-growing Asia for decades to come. This means that Asian countries will
be competing for the same resources as Germany and other European Union
countries. Although the share of fossil energy sources is expected to fall
in the coming decades to 70 percent from 80 percent, energy consumption will
almost double from today's level, according to the WEC. During this period,
the share of gas in German energy consumption will rise to 33 percent from
23 percent today. 

While the United States is working hard to secure access to cheap natural
resources, Germany is promoting the expansion of non-fossil energy sources
such as windmills and biogas to compensate for the phasing out of nuclear
energy. But the WEC said atomic energy is the only source that will allow
Germany to reduce its dependence on fossil fuels. It is also the cheapest.
Alternative energy, in contrast, will never account for more than 10 percent
of Germany's energy use, according to the WEC.

When the electricity market was liberalized in 1998, the government marked
the decision as the beginning of falling prices. For almost two years,
prices fell for businesses. But consumers continue to pay the same high
prices, and energy-intensive industries are now paying close to what they
paid in 1998. Rather than let businesses profit from sinking prices, the
government has increased its share of the profit. 

On every kilowatt of electricity, the government collects electricity tax
and other fees. It also forces consumers to subsidize every kilowatt hour of
energy generated by non-fossil fuels and other regenerative energy sources.
In total, the government collected EUR12.3 billion in 2003 compared to
EUR2.3 billion in 1998. The government's bite of the electricity price
jumped to 40 percent last year from 25 percent in 2003.

Sep. 10

Frankfurter Allgemeine Zeitung 2004