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German Aid to Ukraine Signals a Shift in its Energy Outlook

Despite its reliance on Russian fossil fuels, Germany has decided to pursue a more energy independent future

This winter, energy markets in Europe have been tight. This is felt most acutely in countries like Germany that import a large portion of their energy needs. In the lead-up to the Russian invasion of Ukraine, it was widely thought that Germany, which relies heavily on imports of Russian natural gas, would avoid involving itself in the conflict in order to preserve its access to the resource. The country’s lack of energy independence has been a looming problem for years, but with this crisis it has escalated to a point where it must be acknowledged. That is why the German government now finds itself scrambling to alter its energy policy.

Fortunately, Germany has taken more action in aid of Ukraine than many experts had originally predicted given German reliance on Russian natural gas. Germany has canceled the Nordstream 2 pipeline, and is sending weapons including surface-to-air missiles and anti-tank weapons to Ukraine.

These actions have been a major departure from the country’s previous foreign policy, but the phaseout of reliable nuclear capacity has put the country on a poorer geopolitical footing than would otherwise have been the case. 

Since 2011, Germany has phased out the majority of the nuclear units that once supplied approximately 20 percent of its electricity. The country’s last three operating reactors are set to close by the end of this year. Germany is scrambling to find alternative energy sources. 

Because of this, German leaders were asked about plans to extend the lives of the three remaining reactors. In response to this question at the end of February, German Economy Minister Robert Habeck said that “It is part of my ministry’s tasks to answer this question. I would not reject it on ideological grounds—but the preliminary examination has shown that it does not help us.” According to Habeck, the shutdowns are already far enough underway that keeping the reactors open longer than planned would be difficult as it would require new fuel sourcing among other limitations. But the fact that a politician from the German Green Party is even considering keeping these units open is remarkable. Even a week ago, it would have been a major surprise to hear high-level German officials say they weren’t opposed to an idea like this. Last week, it became clear that the reactors would not be kept open because the government is instead opting to attempt a quick build-up of renewables capacity and new LNG facilities. 

Another point that was also raised is the reopening of already-shut-down units, but this is a thorny problem, and it is a course that will not ultimately be taken. Once reactors have been permanently shut down, whether in the United States or abroad, that capacity is gone forever. It’s not as simple as just restarting the plant. Because of this, nuclear shutdown decisions cannot be taken lightly. Once capacity has been decommissioned, it can’t be simply brought back into service. When an energy crisis arises five or ten years down the road, there is no going back. U.S. regulators and grid operators should learn from the German example and work to keep reactors operational for the full length of their safe operating lifespans. With reactor closures like that of the Indian Point in New York, and the one planned for Diablo Canyon in California, we shut the door permanently on reliable baseload capacity that is already built and has already incurred the vast majority of the costs that it will generate. The best way out of a crisis is to not create one in the first place, and those who point to extra capacity as unnecessary when carbon-free nuclear plants are being shut down will be the first to complain when it’s replaced by gas or coal in a few years because the grid requires the capacity. 

The German government is exploring ways in which it can replace the energy it had hoped to get from Nordstream 2, as well as limit its reliance on imports of Russian gas from other pipelines as much as possible.  

In a Sunday speech, German Chancellor Olaf Scholz expressed how big a change the country must make in its energy policy: “We must change course to overcome our dependence on imports from individual energy suppliers.”

There are several ways in which Germany will attempt to do this. The country has doubled down on its renewables policy, moving the target date for a fully renewable electric grid to 2035, fifteen years earlier than the original target of 2050. Germany also plans to build two new Liquified Natural Gas (LNG) terminals in Brunsbuettel and Wilhelmshaven. This is a realistic way to move the country’s gas consumption away from dependence on Russia, but the timeline on construction of this kind means that it has little to offer in the near term. 

The Germans will also likely extend their use of coal-fired generation in order to offset reliance on Russian gas. Foreign Minister Annalena Baerbock said that the extension of the country’s coal use is, “the price that we all have to pay for this war.”

It’s clear that this conflict has forced the country to reckon with many of the flaws in its energy policy that had been lurking below the surface since the Energiwende policy was embarked upon more than a decade ago. Further details on the course that Germany will take in the wake of the war in Ukraine will certainly be developing in the coming weeks and months, and as the situation evolves it will be worth following closely.

Paige Lambermont is a Research Fellow at the Competitive Enterprise Institute in the Center for Energy and Environment. She covers the electrical grid, energy regulation, nuclear power issues, and other free-market energy topics. Paige has a Bachelor’s Degree in Political Science from American University and a Master’s Degree in Public Administration from the University of Idaho. She is also a Columnist Fellow at Catalyst.
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