ELECTRICITY producers in Germany are in disarray. The cause of the chaos is the government: in June it decided to shut all the country’s nuclear power stations by 2022, after Japan’s struggles to contain radiation leaks from its reactors following an earthquake and tsunami in March.
A study commissioned by the economics ministry has estimated the cost of that decision, in lost jobs and higher energy and carbon prices, at around €32 billion ($46 billion). The government had planned to extend the life of nuclear plants by an average of 12 years.
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More disturbing, perhaps, is that the disarray extends to the renewables industry, which is supposed to benefit from the nuclear closures and fill the gap. Germany’s solar industry, once the world leader, has been eclipsed by Asian producers and the country’s onshore wind-power specialists are being buffeted by a move to offshore wind farms. The technology for capturing and storing carbon emitted by hard-coal and lignite plants is still not commercially proven. The nuclear gap, says a study prepared jointly by the Institute of Energy Economics at Cologne University, and two consultancies, GWS in Osnabrück and Prognos in Basel, Switzerland, is more likely to be filled by new gas-fired power plants and electricity imports. Both will be expensive and increase Germany’s dependence on foreign and sometimes fickle gas suppliers. Prolonged use of coal and lignite plants, without carbon capture, will drive up the price of carbon-emission certificates and hence the cost of electricity, not only for Germany but across the European carbon-trading area.
A bleak picture indeed, without much sunlight from the solar industry. It was, though, always an artificial market, says Wolfgang Hummel, an energy expert at the University of Applied Sciences in Berlin. Solar-panel producers flourished, especially in eastern Germany, mainly because of the guaranteed premiums, known as feed-in tariffs, that solar-power suppliers can get for electricity sold to the grid. The government-guaranteed premiums have been sharply reduced, while those for wind farms have been kept high—higher still for offshore ones. Now investors in solar arrays have to compete with fewer subsidies. That has sent the share prices of Germany’s solar champions, such as Phoenix, SMA Solar and Solarworld, spiralling downwards.
http://www.economist.com/node/21526366Almost $50 Billion down the drain
and increased harm to the environment. What a plan!
That has sent the share prices of Germany’s solar champions, such as Phoenix, SMA Solar and Solarworld, spiralling downwardsIndeed. SolarWorld down from a high in the mid 60s just a few years ago to a new low under $6 today. Phoenix is doing a little better (only down 80%) while SMA is still getting by (but IIRC they're more in the inverter business, which China hasn't buried - yet).
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