Germany has been on a mission to undermine its own energy security for a while now, and the final culmination of one portion of that mission occurred this past weekend. On April 15th, the country’s last three remaining reactors, Emsland, Neckarwestheim II and Isar II, began their final shutdown. 

The German exit from nuclear power has been part of the countries’ “Energiewende,” its energy transition policy that centers renewable energy and began in 2010. Following the Japanese earthquake in 2011 and the nuclear accident at Fukushima, Germany decided to shutter its 17 nuclear power plants despite a full safety review that found nothing amiss, and the German Reactor Safety Commission (RSK) found that the German nuclear facilities did not face the same risks for external flooding events as those in Japan. The other component of the decision was a review by the Ethics Commission, the conclusions of which were both fascinating and infuriating. It found that “although the risks associated with nuclear energy may not have changed owing to the events in Fukushima, the way these risks were perceived had.” Essentially, the commission determined to allow an issue of practicality, the continuance of a reliable and affordable energy supply, to be superseded by an issue of perception.  

Since then, the country has embarked on an energy strategy that centered on the closure of all 17 of its nuclear power plants that once accounted for a quarter of the country’s electricity output. 

German electricity prices have risen dramatically in recent years, with an average monthly wholesale price of €135.9 per Mwh in January of 2023 compared to a price of €34.98 in January of 2020. That is a more than 288% increase in three years. Prices last summer were even more extreme, with a high of €469.5 per Mwh in August of 2022. 

In December of that year, the government instituted a price cap on gas and electricity for households and businesses of a certain size. The cap came into effect on March 1st and will last until April of 2024, and will also work retroactively on prices from January of this year. Electricity prices will be capped at 40 cents per Kwh (€40 per Mwh) on 80 percent of last year’s usage. The new policy’s cost has been estimated at 100 billion euros.

It is almost shocking that the German government would work to exacerbate the energy crisis by removing Emsland’s 1,335 MW net capacity, Neckarwestheim II’s 1310 MW net capacity, and  Isar II’s 1,410 MW net capacity. 

One might expect that price increases so extreme that they lead to intervention on this scale would cause a country to rethink the closure of so much reliable baseload sources of electricity; and it did cause pause within the government. In fact, these three units were originally slated for closure in December, and the only reason that they continued to operate as long as they did is because of a three and a half month extension granted by the Prime Minister in order to shore up supply over the winter. 

But, the fact that a year remains in the price cap shows that this government is far from through its energy crisis. The insulation that the cap creates between Germans and the reality of their electricity crisis will only serve to ensure that decisions like this one continue not only to be made, but remain politically popular. 

Watching the German energy crisis is increasingly frustrating both to watch and explain. Whenever I describe the situation to someone they inevitably ask me to explain why they would do that, and I’m left without a good answer beyond the one provided by the Ethics Commission: that all that matters is the perceived risk, not the reality of the technology, nor the economic and other damage wrought by these closures.

This piece was produced by Paige Lambermont, a Catalyst Fellow and Policy Associate at IER