Stupidity is not always painful. Often it can be laughed away with some embarrassment and minimal injury to the victims, allowing life to trundle on. But deep, cavernous stupidity on a national scale is something else. Everyone suffers.
Germany comes to mind – yes, the same country admired for its industrial prowess, green environmental policies and generally rational corporate and political management style.
Specifically, the country’s energy policy has gone from dubious, before Russia invaded Ukraine, to outright ruinous in the half-year since the war started. On Friday, one-year-forward electricity prices in Germany hit €840 ($1,089) per megawatt hour (MWh), up by half in a week and tenfold since this time last year.
How do you say “ouch” in German?
Yet – get this – Germany, the European Union’s biggest economy and electricity user, is still bent on closing its remaining nuclear reactors. Only three of the once-vast fleet of 17 remain and they are to wave auf wiedersehen to the energy markets in December, though the public outcry against their closing could see them endure for a few more months to lessen the chances that Germans freeze in the dark at Christmas.
There is no sound reason to close the last operating reactors, other than to please the anti-nuke Green Party. Doing so will raise electricity prices again, and the reactors’ output will have to be replaced by another fuel. Since there is not enough renewable energy around, that new fuel will have to be some form of grubby hydrocarbon – natural gas or coal.
Guess what? Virtually no new supplies of gas are to be had, as least not quickly, since both Russia and Europe are using the fuel as a weapon against one another.
German Chancellor Olaf Scholz closed the Nord Stream 2 gas pipeline that goes from Russia to Germany just before the start of the war. The pipeline was ready to open and would have doubled Russia’s gas exports to Germany. In apparent retaliation, Russian President Vladimir Putin cut gas deliveries flowing through the older, parallel Nord Stream 1 pipeline by 80 per cent.
Gas prices in Europe have now reached insane levels. This week, the future gas price at the TTF gas landing site in the Netherlands, the continent’s top gas trading hub, reached €292 per MWh. A year ago, it was less than a tenth that price. The gas squeeze has been felt throughout Europe. On Friday, French electricity for next year rose above €1,000 per MWh. In the U.K., the energy regulator just announced an 80-per-cent increase that will take prices in the fall to more than triple their level last summer.
With gas unaffordable, that leaves coal. Germany is busy reopening some of its coal burners, virtually ensuring to make a fiction of its commitment to reach net-zero emissions by 2045.
Partly owing to the decision to phase out the nuclear plants, Germany now has some of the most expensive electricity in the world, ensuring that tens of millions of businesses and families, some of which face fuel poverty – having to choose between filling the car to get to work and feeding the kids – are angry. At the same time, the reopening of the coal-fired plants will unleash more planet-warming CO2 emissions, soot and other nasty bits of pollution into the atmosphere.
Which makes you wonder if the designers of Germany’s energy policy – they would be former chancellors Gerhard Schroeder and Angela Merkel – had room-temperature (Celsius) IQs.
Mr. Schroeder, who led the country from 1998 to 2005, was a fan of Mr. Putin. He devised a plan to make Germany dependent on cheap Russian gas and backed the Nord Stream 1 pipeline. Mrs. Merkel was less of a fan of the Russian President, but not to the point that she would diversify Germany’s energy supply. She endorsed the Nord Stream 2 pipeline and vowed to end the use of coal to help Germany meet its net-zero goal.
She went further than that. Her fatal decision came in 2011, after the Fukushima nuclear catastrophe in Japan. Her government pledged to close all the nuclear reactors by 2022, even though they had operated safely for decades and had been supplying almost a third of the country’s electricity without spewing out greenhouse gases. Never mind that the reactors were fairly modern and that Germany, unlike Japan, was not prone to massive earthquakes.
Today, with electricity and gas prices at atrocious levels, inflation rates high and Germany facing a potentially dire recession induced by energy shortages that could bring power rationing and factory closings, Mr. Scholz is under political pressure to keep the last three nuclear plants going.
His government is sending out mixed messages about that possibility. To keep them open, and to possibly reopen several mothballed plants, new fuel rods would have to be procured. Legislation would have to be changed to reverse the closings, and new safety and nuclear-waste disposal certificates obtained.
This would not be easy, fast or cheap. But the alternative would be a nightmare, potentially leading to a voter revolt and collapsing support for Ukraine in its war against Russia. It could also see China producing items that German factories could no longer afford to manufacture. Germany is a tech powerhouse. It can find ways to extend the life of its nuclear plants. Shutting them permanently would be not just stupid but insane.
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