Shares in German power utilities E.ON and RWE AG fell sharply Monday after the government last night said it will accelerate the gradual phase-out of all nuclear power production by 2022 and keep a tax on nuclear fuel rods.
Though a drastic u-turn from a previous German policy settled in 2010, the 2022 phase-out was largely expected given the strong anti-nuclear shift in German politics after Fukushima. However, the decision to keep the nuclear tax in place and not give relief to the utilities was noteworthy after comments last week from some politicians that suggested the Germany might withdraw the tax.
Especially as the tax was considered an exchange for not closing the nuclear facilities early. But if there is a loss, there is a gain:
Meanwhile, shares in solar energy and wind power equipment makers gained sharply as investors anticipated the accelerated nuclear phase-out will result in faster expansion of alternative and greener energy sources. Shares in solar cell makers Q-Cells SE and SolarWorld AG, as well as wind turbine maker Nordex SE, closed the trading session sharply higher, posting gains of 8.5%, 8.8% and 13.3% respectively.
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A Wall Street Journal interview with AREVA’s Anne Lauvergeon gives her a chance to make a salient point:
Ms. Lauvergeon calls Germany's decision "political" and says the landscape can change "between now and 2022," when the last plant in Germany is scheduled to go offline. Germany last year accounted for around 10% of Areva's EUR9.1 billion in revenue. She says she is confident that emerging nations with booming energy needs, particular China, India and South Africa, will continue to invest in nuclear power.
Maybe Germany will change its mind - let's hope - but maybe not; in any event AREVA hasn’t really all that much to worry about:
The reaction to the Japanese nuclear disaster has varied. While Switzerland and Germany have decided to phase out nuclear power, countries such as Britain and Poland [not to mention the home territory of France] are sticking by the energy source. "The industry's future remains relatively healthy in growth markets," such as China, India and Brazil, wrote Will Pearson, an energy analyst at the Eurasia Group, in a report published Monday.
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But never let it be said that the decision doesn’t leave room for opportunity even within the nuclear sphere even if the impact on actual people is less than ideal:
[Jorma Aurela, top engineer at the Energy Department of the Finnish Ministry of Employment and the Economy and Mikael Ohlström, the leading energy expert at the Confederation of Finnish Industry,] say that Germany’s decision could lead to higher electricity prices in Finland.
“The use of fossil fuels will increase in Germany at least temporarily. Germany will need more emission credits, whose price will rise when shortages emerge. This will raise the price in the whole EU”, Ohlström says.
Aurela expects that Germany will have to buy electricity from other European countries, which will also raise prices.
“Germany is a huge European country. Nordic players could be tempted to export electricity there at a good price”, Aurela says.
I would count this as vagrant musing – hard to know what’s going to happen in 2022 and beyond – but you can almost hear the Finns licking their chops.
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This is what the Finns are talking about, via Reuters:
Germany's plan to shut all its nuclear power plants by 2022 will add up to 40 million tons of carbon dioxide emissions annually as the country turns to fossil fuels, analysts said on Tuesday.
Well, remember, 2022, who really knows for sure. But what a political culture that aims to bring about this result.
Closing up shop: Herties Department Store in Berlin announces it end(e).
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