Germany’s Energy Crisis Dispels Several Myths

Germany is undergoing an energy crisis now as severely reduced gas flows from Russia threaten to leave it with a cold, dark winter. Much of its problem is self-inflicted and demonstrates the perils of populist but irrational energy policy.

Many eyebrows were raised when Greenpeace announced that, given the seriousness of the current situation, they would not oppose more coal fired power being brought on-line, although they insisted that hard coal, not lignite, be used. (Greenhouse gas emissions are slightly higher for anthracite, but other pollutants, including sulfur, tend to be much lower.) This serves as an important lesson about climate change policy and public attitudes towards higher-cost but cleaner energy supply.

The first myth that needs to be dispelled is, as I have written before, that ‘cheap’ Russian gas fueled Germany’s industrial success in recent years. Russian gas was never cheap, it was sold at market prices, as in the rest of Europe, and at levels close to oil prices (as the result of price indices in the gas contracts). European gas prices have almost always been well above U.S. gas prices because of the uncompetitive nature of Europe’s gas market, where Russia, Algeria and Norway accounted for 2/3s of imported amounts in 2021.

Renewable energy use has grown rapidly, without question as the figure below shows. But it is clear that coal usage has only shrunk slightly, down about one-third since 2011. Which is the salient date: after the great tsunami in Japan and the Fukushima accident, Germany decided to close its nuclear power plants.

But also, the incoherence of abandoning nuclear power while striving to become ‘green’ is abundantly highlighted in the figure below. Prior to 2011, nuclear power had been providing a bit less than half as much energy as coal in Germany (albeit some coal is used in industry). Renewables grew rapidly under the policy of Energiewende policy adopted 20 years ago, rising to 2.3 Exajoules in 2021 (excluding hydro). Coal use would have almost been squeezed out, as the next figure shows.

It’s worth noting that, despite the many anti-nuclear proclamations that nuclear is too expensive and renewables are the cheapest source of power, Germany has electricity prices that are roughly 50% higher than France’s, whose power system is heavily dependent on nuclear. Nuclear power opponents say it is expensive because they look at recent projects constructing of designs, where cost overruns have elevated the prices—for those plants, not nuclear power in general. Also, while wind and solar have gotten cheaper, much of Germany’s renewable capacity was installed when costs were still high, but even so the expansion of renewable power has not lowered electricity prices at all.

A final note involves the anti-scientific nature of nuclear power opposition. Many have noted that the opposition to nuclear power is grounded in fears, not facts. Germany’s 2011 decision to close its nuclear power plants after the Fukushima accident was astoundingly illogical. The great 2011 earthquake did not cause the Fukushima plants to shut down, the subsequent tsunami did. Germany is not prone to major earthquakes and certainly not tsunamis, so that justification for the closure is absurd.

Further, as has been documented by notable scientists like James Hansen, global nuclear power production, by displacing coal power, has saved an estimated 75,000 deaths per year.[i] If it could be used to provide electricity to the energy-impoverished, whose use of noncommercial energy like wood and dung causes an estimated 3 million deaths per year worldwide, that number would be multiplied many times.

Replacing Germany’s remaining nuclear power with renewables is technically achievable, given that in 2021, German nuclear power was only as large as 25% of renewable energy supply. However, it took more than 5 years to add that much renewable energy and it required a significant reliance on, ta-da!, backup power plants fueled by natural gas. Which brings us back to your friendly neighborhood gas supplier, Vladmir Putin!

WhoHousehold air pollution and health

[i] Kharecha, A Pushker and James E. Hansen, “Prevented Mortality and Greenhouse Gas Emissions from Global Nuclear Power,” Environmental Science and Technology, 2013.