Germany Likely to Rely on Nuclear to Avert Winter Shortage




  • In Business
  • 2022-09-27 14:30:23Z
  • By Bloomberg
 

(Bloomberg) -- Germany is more likely to prolong its use of nuclear power into next year to help prevent the risk of blackouts in Europe's biggest economy this winter.

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Chancellor Olaf Scholz's ruling coalition agreed this month to make two of Germany's three remaining nuclear plants available beyond the end of this year if needed, reversing a long-planned shutdown of the facilities. The government came under intense pressure to delay the final step in the phaseout after Russia's invasion of Ukraine triggered a dramatic surge in energy prices.

"We are already in a situation now where the stress test says it could become necessary to use nuclear power for the security of the grid," Economy Minister Robert Habeck said Tuesday at a climate conference in Berlin organized by Der Spiegel magazine.

German power prices for next year fell after the comments, reversing an earlier gain to trade down as much as 2.6% to 465 euros per megawatt-hour.

Habeck cited difficulties with nuclear facilities in neighboring France -- which is normally a power exporter -- as one reason Germany may have to keep its reactors running to address a potential shortage in the south of the country.

After commissioning a "stress test" of Germany's energy security, the government decided to extend the operating life of EON SE's Isar-2 plant in Bavaria and Neckarwestheim in Baden-Wuerttemberg, which belongs to EnBW AG, until the middle of April.

Habeck, who is a member of the Greens party, agreed to the plan only reluctantly, while Finance Minister Christian Lindner, who heads the pro-business Free Democrats, continues to lobby for all three plants to be retained given the potential scale of the energy crisis.

Habeck's ministry has also come under fire for apparently failing to adequately address the technical challenges involved in delaying the nuclear exit.

EON said last week that Isar-2 requires a total shutdown in the next month in order to fix a valve issue so it's safe to extend operations, a detail the government says it wasn't aware of when laying out its plans.

Isar-2's operator has already flagged that it isn't feasible to ramp nuclear facilities up and down in the way the government had envisaged.

Nuclear power accounted for 6% of electricity generation in Germany in the first quarter, compared with more than 30% from coal, 13% from gas and almost half from renewables including wind and solar, according to Federal Statistics Office data published in June.

(Updates with power price move in fourth paragraph.)

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