SHARE
COPY LINK

ENERGY

Nuclear power is only cheap for the industry

The atomic energy industry is pushing to delay Germany’s phase-out of nuclear power. But Marcus Gatzke from ZEIT ONLINE warns doing so could hurt the country’s switch to renewable energy – and consumers’ pocketbooks.

Nuclear power is only cheap for the industry
Photo: DPA

Atomic energy = cheap power!

That pretty much sums up the mantra of proponents of extending the lifespan of Germany’s nuclear reactors. They claim consumers will end up footing the bill if the country’s ageing atomic power plants are phased out as planned. “Energy cannot become a luxury item,” says Economy Minister Rainer Brüderle from the pro-business Free Democrats (FDP).

It’s an argument that’s easy to sell to the public. It speaks directly to average citizens, seems pretty plausible and is easy to explain: Renewable energy is expensive and has to be subsidised, whereas nuclear power doesn’t.

But that’s the thing with such political debates – the argument doesn’t hold up under closer scrutiny. Electricity in Germany isn’t particularly cheap. In theory, the German power market has been liberalised since 1998, but there is little true competition. The four large atomic energy firms produce around 80 percent of Germany’s power. This market dominance keeps consumers from profiting from economically produced nuclear power.

If the lifespan of reactors is extended, it will merely cement this dominance – likely leading to higher prices. On the other hand, systematically taking nuclear power plants off the grid would provide openings for potential competitors. Many municipal utilities have already prepared for the nuclear phase-out by investing in renewable energy. Keeping reactors running longer will snuff out their chances before they even get started.

A rapid conversion to renewable energy would have the added benefit of hindering a market-dominating concentration of power production. In the future, electricity creation will be more decentralised and there will be a greater number of providers. Proper competition ensures lower prices and hinders companies from developing a market monopoly.

Opponents of subsidising renewable energy should also realise that the atomic energy industry received €165 billion in support from 1950 to 2008 – including €65 billion in tax breaks alone. This is the only reason nuclear power can be produced so cheaply. But virtually none of this huge subsidy has been passed on to consumers.

Surely executives at EON and RWE, unhappy with the government’s plans to make them pony up for renewable energy, can explain the reasons for this to Chancellor Angela Merkel.

This commentary was published with the kind permission of ZEIT ONLINE, where it originally appeared in German. Translation by The Local.

Member comments

Log in here to leave a comment.
Become a Member to leave a comment.

ENERGY

German government announces fresh relief package for high energy costs

With Russia's invasion in Ukraine exacerbating high energy and petrol prices, Germany is set to introduce a second relief package to limit the impact on consumers.

German government announces fresh relief package for high energy costs

The additional package of measures was announced by Economy and Climate Protection Minister Robert Habeck (Greens) on Sunday.

Speaking to DPA, Habeck said the wave of price increases throughout the energy sector were becoming increasingly difficult for households to bear.

“Extremely high heating costs, extremely high electricity prices, and extremely high fuel prices are putting a strain on households, and the lower the income, the more so,” he said. “The German government will therefore launch another relief package.”

The costs of heating and electricity have hit record highs in the past few months due to post-pandemic supply issues. 

This dramatic rise in prices has already prompted the government to introduce a range of measures to ease the burden on households, including abolishing the Renewable Energy Act (EEG) levy earlier than planned, offering grants to low-income households and increasing the commuter allowance. 

READ ALSO: EXPLAINED: What Germany’s relief package against rising prices means for you

But since Russia invaded neighbouring Ukraine on February 24th, the attack has been driving up energy prices further, Habeck explained.

He added that fears of supply shortages and speculation on the market were currently making the situation worse. 

How will the package work?

When defining the new relief measures, the Economics Ministry will use three criteria, Habeck revealed. 

Firstly, the measures must span all areas of the energy market, including heating costs, electricity and mobility. 

Heating is the area where households are under the most pressure. The ministry estimates that the gas bill for an average family in an unrenovated one-family house will rise by about €2,000 this year. 

Secondly, the package should include measures to help save energy, such as reducing car emissions or replacing gas heating systems.

Thirdly, market-based incentives should be used to ensure that people who use less energy also have lower costs. 

“The government will now put together the entire package quickly and constructively in a working process,” said Habeck.

Fuel subsidy

The three-point plan outlined by the Green Party politician are not the only relief proposals being considered by the government.

According to reports in German daily Bild, Finance Minister Christian Lindner (FPD) is allegedly considering introducing a state fuel subsidy for car drivers.

The amount of the subsidy – which hasn’t yet been defined – would be deducted from a driver’s bill when paying at the petrol station. 

The operator of the petrol station would then have to submit the receipts to the tax authorities later in order to claim the money back. 

Since the start of the war in Ukraine, fuel prices have risen dramatically in Germany: diesel has gone up by around 66 cents per litre, while a litre of E10 has gone up by around 45 cents.

READ ALSO: EXPLAINED: The everyday products getting more expensive in Germany

As well as support for consumers, the government is currently working on a credit assistance programme to assist German companies that have been hit hard by the EU sanctions against Russia.

As reported by Bild on Saturday, bridging aid is also being discussed for companies that can no longer manage the sharp rise in raw material prices.

In addition, an extension of the shorter working hours (Kurzarbeit) scheme beyond June 30th is allegedly being examined, as well as a further increase in the commuter allowance.

SHOW COMMENTS