Posted by Richard Todd
German government announced a moratorium on nuclear energy after the nuclear disaster in Fukushima in March. It subsequently made a dramatic U-turn on the policy it had announced last autumn to extend the lives of nuclear power stations into late 2020s and 2030s. It has now decided to close all nuclear power stations for the production of electricity by the end of 2022 (hooray I hear the masses singing!). The last plant was commissioned in the 1980s and the previous government (Red-Green) had already agreed to close them by 2022, a decision taken in 2000 and ratified by parliament in 2011. The 8 plants closed as part of the moratorium will remain closed for good.
N.B. nuclear power accounted for 23% of German electricity consumption in 2010.
German Renewable Energy Sources Act
In later decisions and ratification by parliament in summer, the government has adjusted again the German Renewable Energy Sources Act. This sets the tariffs for differing renewable energy technologies. Offshore wind will receive a major boost under the new tariffs, due to come into being on Jan 1, 2012. Developers will receive 15 cents / kwh for 12 years (previously 13 cents) or 19 cents / kwh compressed into 8 years for electricity from offshore wind. The tariff level after this period sinks back to basic level of 3.5 cents. In parallel the government also launched a new co-financing programme, managed by the KFW (Kreditanmstalt für Wiederaufbau) of € 5 billion. This is to help finance the next ten German offshore wind parks. Two developers have already taken advantage of this programme (Meerwind and Global Tech I) each receiving major loan sums from KfW to finance their € 1+ billion projects. This is a major breakthrough for the German offshore wind sector. The government has ambitious targets (it needs to replace nuclear don’t forget) of 10,000 MW of installed capacity by 2020 and 25,000 MW of installed capacity by 2030. It will only reach these targets if there is significant investment in port infrastructure, installation vessels, supply chain companies, development of skills and training, upgrading the transmission grid (it now has a ten year plan to do this part) etc.
It is a major challenge, but most are optimistic the long-term goal at least can be achieved. Low returns on investment and rather risky projects had deterred main investors from Germany (UK offers more attractive returns, or at least it did until now), but this looks set to change. Also, for the first time ever, renewable energy accounted for more than 20% of electricity consumption in H1 of 2011, up from 17% in 2010.