Hans-Werner Sinn

Nationalökonomie & Finanzwissenschaft

Ifo Viewpoint

Ifo Viewpoint No. 98: Nuclear Power: Wrong-Way Driver Germany

Munich, 22 July 2008

Driving along the motorway, Michel is listening to the radio. A speaker interrupts to say: “Attention, a wrong-way driver is coming your way.” Annoyed, Michel proclaims: “Just one? There are lots of them!” Michel is Germany, and the motorway is nuclear power.

Except for Germany no single country is keeping to its nuclear power phase-out plans. In Sweden, which had propagated a nuclear phase-out already in 1980 and in fact closed two nuclear power plants in 1999 and 2005, further closings have been moved into the distant future. The ten still existing plants have been modernized so extensively that a systematic phase-out is virtually impossible. 80 percent of the Swedish population accepts nuclear power. In Belgium it was decided in 2005 to annul the phase-out decision of 1999. The Netherlands also reversed a 1994 phase-out decision in 2005 and four new nuclear power plants are scheduled to be built by 2015. Italy closed down its reactors in 1990 but now wants to build four new ones. Finland, which many often regard as a nuclear-power opponent, is currently building the largest nuclear power plant of all times with a total capacity of 1600 megawatts near Olkiluoto. The UK intends to take four nuclear power plants from the grid but at the same time to build six new ones. China is planning 24, the US 12 and Japan 11 new reactors. Even India wants to build 10 new nuclear power stations. The Czech Republic wants to construct a second reactor right across the German border at Temelin, and Switzerland is also planning a new nuclear reactor on Germany’s southern boundary. Fortunately, we still have the Austrians, our “wrong-way” neighbours in the south. Austria does not want nuclear power. But Austria cannot phase it out because it already did so twenty years ago.

Going the wrong way has never bothered Germany’s idealists. With no common sense and always deeply convinced that the world should follow Germany’s lead, we often run full steam ahead until we fetch a bloody nose for ourselves. The country suffered from the excesses of patriotism and socialism, and now it is suffering from the excesses of Green idealism. We always want to offer the world another opinion, and we are always in the right and all the others are wrong.

28 percent of the world’s wind energy is produced in Germany, 48 percent of photovoltaic energy and 45 percent of biodiesel. In all of these categories Germany is far in the lead over all the other countries of this earth. We are once again showing them the way.

Green stubbornness is now costing us an enormous amount of money. Photovoltaics has already cost us 26 billion euros in public subsidies and would have cost us 120 billion up to 2015 if the Bundestag hadn’t decided to reduce the subsidy rate by ten cents. However, this electricity is still ten times more expensive than normal electricity and many more billions of euros in costs will still be spent. Currently, photovoltaics covers about half a percent of Germany’s electricity supply whereas a good quarter of its electricity comes from nuclear reactors. In France the atomic industry supplies about 80 percent of the country’s electricity.

Most people have realised in the meantime that bioenergy is a flop. The Greens will never manage to convince the needy of this world that food belongs in the tank instead of on the plate. The political battle has been lost even before it began.

What remains are the wind propellers. Wind energy is getting closer to becoming competitive, but although it only supplies slightly more than a twentieth of Germany’s electricity, our landscapes have been sufficiently ruined and the off-shore locations have already been sold to the oil companies. Where are the new ones to be built? Not in my garden, thank you very much, and also not next to the idyllic farmhouses of my boyhood home!

And what about liquefying, under high pressure, the carbon dioxide that arises from burning coal and pumping it into the earth? Fabulous idea! Liquid carbon dioxide needs about 5.4 as much space as the anthracite coal that is burned or 1.35 times as much room as lignite coal, and for the production of liquid carbon dioxide we need about a third more energy. And where should it be sequestered? The empty gas storehouses are already used as temporary storage for natural gas. In order to sequester the fluid carbon dioxide arising annually from a lignite coal power plant with the same net capacity as the one at Biblis, Germany’s best known reactor, we would need a storage space of approximately 37 million cubic meters or approximately 11,000 freight trains a year. In order to carry away the spent fuel rods of the Biblis nuclear power plant, one single castor transport with four containers is necessary. And who would want to live above a carbon dioxide storage? Carbon dioxide is heavier than air. Whoever lives above it when it is released might just as well lie down to sleep in a wine cellar.

Illusions and a lack of pragmatism wherever one looks. That is the Green idealist republic of Germany. How about letting the citizens themselves decide on how they want to save the world’s climate. Let the power stations sell the different types of CO2-free electricity at prices that are justified by the costs. My bet is that atomic electricity would easily win the race.

Hans-Werner Sinn
Professor of Economics and Finance, University of Munich
President of the Ifo Institute

Published as “Geisterfahrer Deutschland”, WirtschaftsWoche, no. 30, July 21, 2008, p. 35.