Author: Zuzana Mjartanová (NRS FSV UK/Institut Energetické Ekonomie)

The European Union is heading towards a new 2030 energy and climate package. However, 7 years after the old one, national energy strategies still substantially diverge. If we look at the two largest member states in detail, we find that they have utterly different energy policies. This paper was written late 2012; however, it continues to serve its purpose. It assesses the situation in France and Germany and asks the question, whether it is even possible to have common European energy policy when the two main actors have such diverse strategies and goals.

To explain the difference between Germany and France, three indicators were chosen: historical background, consumers’ behavior and the position of nuclear/renewable energy on the market. First two chapters are devoted to the current energy policy and energy mix of both states, followed by an explanation of distinctions. It concludes with possible future scenarios. It omits the question of security of supply when not necessary, as it is not the main goal of this paper.

Energy profile: Germany

Energy issues in Germany continue to decidedly shape the political setting in the country, as demonstrated by the events of 2010 and 2011. In the autumn of 2010, government led by former nuclear physicist Angela Merkel decided to prolong the planned operating time of 17 remaining nuclear power plants by 12 years on average, due to the claimed good condition of the reactors and the contribution to Germany’s energy independence.[1] Only half a year ago, after the nuclear accident in Fukushima Daichii power plant, 8 of the 17 reactors were closed immediately. This inevitably led to a question why was the lifetime of some nuclear reactors prolonged just half a year ago. As a consequence, both governmental parties CDU-CSU (Christian democrats) and FDP (Liberals) were defeated in regional elections in Baden-Württemberg and Rheinland-Pfalz roughly two weeks after the Japan earthquake.[2] These events gave rise to a new policy, commonly known as Energiewende (translated as “a reversal in energy policy”).

A new energy package adopted on June 6, 2011 brought forth a new energy strategy of which the main goal was to bring a more secure and economically feasible energy supply.  The principal aim was to phase out nuclear power till 2022 and to replace it with renewable energy sources (proportion should be 80% in electricity generation by 2050). Moreover, greenhouse gas emissions (CO2) should be reduced by 80% in comparison with 1990 levels.[3] In 2020, the share of renewables should increase to 35% of the energy mix and CO2 emissions should be reduced by 40%. At the same time, energy prices should be reduced and so should consumption. New grids are to be built to bring electricity from the generation spots in the North to the consumption centers in the South. Also, import of primary energy to Germany should become more secure.[4]

Nuclear energy had a 17.6% share in the German energy mix in 2011. Fossil fuels (gas-fired and coal power plants) had a lion share of 62.6%; renewable energy sources amounted to 19.9%.[5] When one takes a closer look at the supply of these commodities, he finds that Germany is relatively dependent on certain countries and that this trend will have ascendant tendency. 40% of its oil is imported from Russia, 14 % from UK, Norway and Kazakhstan import 8% respectively. Russia is the main player in the gas sector with a 39% share of all the gas imported, followed closely by Norway with 35%.[6] Solid coal comes from domestic production, from Ruhr and Saar regions, but the mining is expected to continue declining until 2018, when all eight remaining coal mines are expected to be shut down. Germany is the largest producer of lignite in the world, but it generates great amounts of CO2 emissions what do not fit with the German reduction plan.[7]

Renewable energy sources are going to replace nuclear and fossil fuels in the future. Share of hydroelectric power is expected to remain stable – at a 3% level, because the most possible and cost-effective dam projects have already been built. Wind is seen as the main energy source to replace nuclear power. The problem with wind generated energy is a general resistance to it because of noise and possible environmental impacts (e.g. on migrating birds). Despite this, Germany is the world leader in wind energy generation (in 2009 it possessed 16 % of total global wind capacity) and most probably will further extend its wind parks on- and off-shore. Photovoltaic energy is considered as the second most important source replacing nuclear energy and its share till 2020 should rise to approximately 13%.[8]

Magrath-Wind-Farm-Szmurlo

When one takes current consumption patterns into consideration, he sees that the new energy policy is rather problematic for several reasons: how could Germany decrease greenhouse gas emissions while at the same time increase the proportion of gas-fired and coal-fired power plants (that will have to at least temporarily replace nuclear power plants)?  The intermittency and unreliability of renewable sources are the other problems. Solar energy is not an efficient source for Germany due to its geographic position and cannot cover demand during peak hours; the same applies to wind energy. Besides that, there is broad dissatisfaction with wind turbines in the society. Grid infrastructure to bring electricity from North to South is missing and to add the last missing piece, current electricity price does not allow combined gas and steam power plants to operate; these remain conserved and closed until the rise in price. But these cannot rise anymore as they already represent huge problems for energy-intensive industries operating in Germany. One could say the current situation is a kind of vicious circle.

Energy profile: France

Nuclear power plants account for nearly 75% of France’s total electricity generation. As a consequence, it is the world’s largest net exporter of electricity. The country has vast research in this field: it develops new reactors, fuel products and also exports services. Currently it is building its first Generation III reactor and planning to build a second.  17% of electricity already comes from recycled nuclear fuel and France has extremely low levels of CO2 emissions per capita thanks to nuclear power.[9]

France has quite a long history of the use of a nuclear power. After the first oil shock in 1974, a new program was launched, with the intention to increase the use of nuclear energy and to build 3 reactors per year. Nowadays it has 58 Generation II reactors, which amounts to a 16% share of nuclear power worldwide.[10] In 1999, parliamentary debate reaffirmed three main pillars of French energy policy: security of supply, respect for the environment and adequate attention to radioactive waste management. In 2005, the central role of nuclear power was re-established by law. After Fukushima, President Nicolas Sarkozy ordered a 6 month-long review of reactor safety. The result only reconfirmed the position of nuclear power.[11]  In 2012, mainly during the presidential election in June, debates aroused whether France would continue in its existing energy policy. Newly elected socialist president Francois Hollande announced plans to move up the planned closing of France’s oldest nuclear power plant in Fessenheim by about 6 months to the end of 2016, but at the same time endorsed the stability of nuclear power in the country. The only one “generous gift” for French Greens (in return for voting for Hollande) was the announcement of the goal to reduce France’s dependence on nuclear power to 50% by 2025. However, there is no official law on this and Arnaud Montebourg, minister for industrial recovery announced later that year that nuclear power is an industry of the future and a tremendous asset for the country.[12]

Renewables also have its place in the French energy market, although the position is considerably weaker than the one of nuclear energy. In 2010, the share amounted to 15 % of electricity generation. Despite apt natural conditions, photovoltaic energy represents less than 1% of total electricity production.[13] France has 5800 kilometers of coastline but no offshore wind turbines. If 40 000 wind turbines were installed in three rows along the entire French coast, all the 58 nuclear reactors currently operating in France could be replaced. The feasibility of this idea is the main issue. Initial investment represents one problem, not to mention the operating costs and the costs of electricity storage.[14] The structure of French electricity grid is another obstruction. It was built just after the Second World War with the aim to bring electricity elsewhere. The result was the construction of the grid as a top-down network conceived for a centralized production (from nuclear power plants). If the country used more renewable power from smaller power plants (households), it would have to be restructured so power could flow in both directions.[15]

Nuclear_Power_Plant_Cattenom

Hydropower is the second largest single source used for electricity generation. In the 1960s it generated more than 50% of electricity, with the growth of demand and the construction of new types of power plants it shrunk to current 11%. The capacity of France’s rivers and lakes is already fully exploited; further development is possible by run-of-the-river systems. Plant storage hydro plants are a great complement of intermittent renewable sources (such as photovoltaic or wind) as they allow to immediately balance generation and demand. But as was already said, the capacity of the country’s lakes is already fully utilized. Therefore the only convenient renewable sources left are biomass (which is currently used more for heating than for electricity generation) and geothermal power.[16]

Why both countries differ in their energy policy so much?

European Union has never focused too much on the energy policy of its member states – and therefore it was possible for France to be 75 % “nuclear” and for Germany to be 25 % “renewable”. Current plans for common European energy policy are loose – according to the communication from the Commission to the European Council and the European Parliament from 2007 the main aim is to establish an internal energy market.[17] This should include the separation of management of networks, production and sale, interconnection of European grids and pipelines and provide everyone with the same opportunity to choose a supplier at a fair and competitive price. Also, energy supply ought to become more secure and as everywhere else, EU should speak with one voice on energy issues. In 2008, under the French presidency, EU adopted an Energy-Climate package that aimed to combat climate change by cutting greenhouse gas emissions by 20%, achieving a 20% share of renewable energy sources in the energy mix and increasing energy efficiency by 20%.[18] All those targets are due by 2020; however, it is not explicitly mentioned how EU members should achieve this. For example, it is not clear whether the EU supports nuclear power generation or not. The communication states that nuclear energy has a benefit of being one of the low-carbon energy sources, offering the most stable costs and security of supply and that it is up to member states whether they will use it or not.[19] On the other hand, in the plenum of the European parliament, questions about its security arise time after time.

This lax approach has not changed after Fukushima and therefore Germany and France chose their own ways of how to achieve the goals stated in the Energy-Climate package. Germany opted for a phase-out, France for further development of nuclear technology. The cause for this lies in three reasons: different historical legacies, different consumption patterns and different positions of nuclear/renewable energy on the market.

Historical Legacies

As France has a long history of nuclear power, Germany has a long history of nuclear resistance. Already during the Cold War various allies hosted nuclear missiles within German borders – often pointing at each other. The generation that was educated in pacifist ideals after the Second World War gave rise to a strong pacifist and anti-nuclear movement in the 1960s (current Green Party has its roots in it). [20]  Chancellor Schröder declared phased withdrawal from nuclear energy back in 2002[21], but because of smart political lobbying under the government of Angela Merkel the policy was reversed in 2010. Administration declared that although the long term goal is to generate electricity from renewable sources, nuclear energy should serve as a bridge till the desired generation capacity is reached.[22] Half a year later, given these legacies, it was much easier to revert to the initial plan after the Fukushima accident and simply switch nuclear and coal.

Another reason lies in the close cultural proximity that Germans feel to Japan. It is as simple as to say that if an unexpected nuclear accident can happen in Japan, it can also happen in Germany.[23] Consensus-built decision-making (inherited from the experience of the Second World War) applies everywhere. Approximately 78% of Germans saw nuclear phase-out as a good thing (in France this number is 53%, which is also not insignificant). 45% of Germans said they are very satisfied with the country’s energy policy, with additional 31% being satisfied, on the other side of the borders the number laid at only 5% and 46% respectively. But in return, 64% of French believe that the decision to stay with nuclear power was a ‘good thing’, compared to only 19% of Germans.[24]

5706302297_47117cfdc7_z

France sees the reason for this policy change only in the context of the German historical development and strongly disagrees with it, mainly because of the possible dependency of Germany on outside sources of energy.[25] Another concern is that Germany will have to import electricity from France, which does not have enough capacity to replace the array of German nuclear power plants.[26] French government considers its preference of nuclear energy as a strategic (not ideological) choice, because it represents a continuation of a policy started in 1974 and because of the independence that nuclear generation provides (although energy mix of Germany is much more variable). Other advantages seen are low electricity prices and compliance with international commitments to reduce CO2 emissions.[27]

Different consumption patterns

Another reason for different positions of Germany and France lies in different consumption patterns of both states. Price is not the most important drive for citizens in Germany (albeit it matters for industry) – it is more important for the German society to have clean energy about which it actually decided. In Germany, half of the new renewable installations that have been constructed over the past 20 years belong directly to citizens.[28] In Frane, only two companies run the majority of the market.  First one is 90% state-owned Areva, the world’s largest nuclear company, the other one is EdF (Electricité de France, 85% state-owned), the largest nuclear electric utility.[29] This situation simply could not happen in Germany, the French on the other hand, do not complain at all as this partially caused that they have the lowest energy prices in Europe – approximately 30% under the European average.[30]

French households consume much more energy than German ones. Germans have more responsive consumption patterns, more efficient building insulation policies and more efficient electricity generation.[31] Consumption per resident in Germany is 20-30% lower compared to that of France. The reasons for this are electric heating (that consumes 10% of national electricity consumption each year) and an underdeveloped renewable market for households. For example there are ten times more solar water heaters in Germany than in France, although its potential is much greater.[32] In spite of all these hot spots, both sides are simply happy about their energy policies – Germans are happy to have a clean one; French are pleased not to pay too much.

Position on the Market

The last factor chosen to explain the different policies of the two neighbors is the different position of the nuclear and renewable energy on the market and the impact they have on respective country’s employment. Germany owned 16% of total global wind capacity in 2009.[33] On the other hand, France possessed 16% of global nuclear capacity.[34] According to the government[35], nuclear energy sector creates 100 000 direct and 100 000 indirect jobs across the country. Some scholars estimate even so many as 400 000 unionized workers are employed in the country’s nuclear sector.[36] On contrary, 370 000 workers in Germany were occupied in the renewable energy sector in 2010.[37] As French Areva is the world’s largest nuclear company, German has Enercon in the wind energy sector.[38] Not only employment but also the availability of natural resources plays a significant role. Germany has huge reserves of lignite and solid coal, even if highly polluting. France has substantial heavy engineering expertise but few indigenous energy resources.[39] There lies the reason why it relies on the nuclear power so much and why Germany is not afraid to phase out nuclear power.

Conclusions

I do assume that neither Germany nor France will re-think their national strategies in the near future. Germany is strongly committed to phase-out nuclear, even if it brings a lot of troubles. France, on the other hand, will not turn to generation from renewables, even if it employs as much as 100 000 people. Nuclear power will remain a national champion. This reluctance to reach some kind of compromise represents major clash in the common European Energy policy. It is commonly known that if Germany and France will not make a deal, Europe will not make a deal either. European debt-master has to struggle with the dilemma of high energy prices that already forced several heavy players in the industry to leave the country seeking for cheaper alternatives. It does not want to pay even more attention to comply with EU goals such as CO2 emissions decrease. Both countries are reluctant to cooperate in this field with each other (e.g. France refuses to supply Germany when there is a problem – Czech Republic does so). Therefore I do not think the strategy 2030 could make a difference. It will not create a common European market nor will it force countries to adopt some kind of common policy. It will look good on paper, but the real impact is yet to come with other measures and policy steps.

 


[1] Industry report: Energy in Germany (analysis of The Economist Intelligence Unit). Closing date March 13, 2012, available at www.eiu.com/energy.

[2] Bettina B. F. Wittneben. “The Impact of the Fukushima Nuclear Accident on European energy policy.” (short communication). Published online on November 20, 2011 for Elsevier. Doi:10.1016/j.envsci.2011.09.002

[3] Bundesministerium für Wirtschaft und Technologie, „Energiekonzept“. Accessed 26.12.2012, available at http://www.bmwi.de/DE/Themen/Energie/Energiepolitik/energiekonzept.html.

[4]Bundesministerium für Wirtschaft und Technologie, “Der Weg zur Energie der Zukunft – sicher, bezahlbar und umweltfreundlich.“ Eckpunkte für ein energiepolitisches Konzept. 6.6.2011, available at http://www.bmwi.de/DE/Themen/energie,did=405004.html.

[5] “Energiekonzept”, 2011.

[6] Industry report: Energy in Germany.

[7] Industry report: Energy in Germany.

[8] Ibid.

[9] World Nuclear Association: Nuclear Power in France. Updated in December 2012, available at http://www.world-nuclear.org/info/inf40.html.

[10] Foucault, Arnaud. “Is 100% Renewable Energy possible in France by 2020?” Global Energy Network Institute,  August 2011. Available from www.geni.org.

[11] World Nuclear Association: Nuclear Power in France.

[12] Nicola Clark. “Energy Policy in France Divides Governing Coalition of Socialists and Greens.” The New York Times, 14.9.2012, available at http://www.nytimes.com/2012/09/15/world/europe/energy-policy-divides-governing-coalition-in-france.html?pagewanted=all&_r=0.

[13] Foucault, Arnaud. “Is 100% Renewable Energy possible in France by 2020?”

[14] Foucault, Arnaud. “Is 100% Renewable Energy possible in France by 2020?”

[15] Marion Douet. “France needs more local power for green energy shift.” Reuters, 14.11.2012, available at http://www.reuters.com/article/2012/11/14/us-france-renewables-state-idUSBRE8AD0KB20121114.

[16] Arnaud Foucault. “Is 100% Renewable Energy possible in France by 2020?”

[17] Europa: Summaries of EU Legislation. “An Energy Policy for Europe.” Accessed December 27, 2012, available at http://europa.eu/legislation_summaries/energy/european_energy_policy/l27067_en.htm.

[18] Electrical Efficiency Magazine, “Energy efficiency to become overarching principle of French energy policy in 2050.” 31.10.2012, available at http://www.electrical-efficiency.com/2012/10/energy-efficiency-become-principle-french-energy-policy-2050/.

[19] Europa: Summaries of EU Legislation. “An Energy Policy for Europe.”

[20] Bettina B. F. Wittneben. “The Impact of the Fukushima Nuclear Accident on European energy policy.”

[21] Nuclear Power, a Pillar of France´s Energy Policy. Analysis of Ministry for Budget, Public Account, the Civil Service and State Reform, June 6, 2011. Available from http://www.ambafrance-au.org/IMG/pdf/Nucleaire-Focus_6_juin_2011_version_anglaise.pdf.

[22] Bundesministerium für Wirtschaft und Technologie: “Der Weg zur Energie der Zukunft – sicher, bezahlbar und umweltfreundlich. Eckpunkte für ein energiepolitisches Konzept.”

[23] Bettina B. F. Wittneben. “The Impact of the Fukushima Nuclear Accident on European energy policy.”

[24] The Renewables Magazine International, “The Franco-German Divide in energy policy“. 12.11.2012, available at http://www.renewablesinternational.net/the-franco-german-divide-in-energy-policy/150/537/58496/.

[25] Nuclear Power, a Pillar of France´s Energy Policy.

[26] Taylor Dinerman.  “German Energy Policy: The New Geopolitics of Central and Eastern Europe.” Gatestone Institute, 15.6.2011. Available at http://www.gatestoneinstitute.org/2194/german-energy-policy.

[27] Nuclear Power, a Pillar of France´s Energy Policy.

[28] The Renewables Magazine International, “The Franco-German Divide in energy policy.”

[29] World Nuclear Association: Nuclear Power in France.

[30] Arnaud Foucault. “Is 100% Renewable Energy possible in France by 2020?”

[31] Electrical Efficiency Magazine: “No coal, no nukes: Germany´s future energy mix.” June 15, 2012, available from http://www.electrical-efficiency.com/2012/06/no-coal-nukes-germany%E2%80%99s-future-energy-mix/.

[32] Arnaud Foucault. “Is 100% Renewable Energy possible in France by 2020?”

[33] Industry report: Energy in Germany.

[34] Arnaud Foucault. “Is 100% Renewable Energy possible in France by 2020?”

[35] Nuclear Power, a Pillar of France´s Energy Policy.

[36] Nicola Clark, “Energy Policy in France Divides Governing Coalition of Socialists and Greens.”

[37] Electrical Efficiency Magazine: “No coal, no nukes: Germany´s future energy mix.”

[38] Arnaud Foucault. “Is 100% Renewable Energy possible in France by 2020?”

[39] World Nuclear Association: Nuclear Power in France.