Germany’s nuclear U-turn may well empower France

During a visit last month to the Gravelines nuclear power plant in northern France – the fifth-largest in the world – President Nicolas Sarkozy renewed his country’s commitment to the industry and described post-Fukushima fears over nuclear safety as “medieval” and “irrational”. He did not name anyone in particular, but it was hardly difficult to guess who he had in mind.

It was by no means the first time he has fired a salvo over nuclear power at Germany and its chancellor, Angela Merkel. Remember when he refused a request by Siemens to take a stake in Areva, the French nuclear group, simply because Germany had imposed a moratorium on nuclear power.

Ms Merkel has now decided to go even further. This week she abruptly decided to scrap all nuclear power by 2022. This is a reversal of her previous decision just nine months ago to delay the closure of the country’s 17 plants. It has been greeted with dismay not just in France but in many other industrialised nations.

For all these countries, Ms Merkel’s move is surprising for several reasons. First, there seems little logical explanation for such a sudden about-turn except for populist politics. Second, it is obvious that there has been no reflection on what this all means for Germany’s longer-term prospects. It is easy to announce a doubling of renewable energy and claim that this will put you at the forefront of the green revolution. But in practice, getting there will be expensive, fraught with risk and highly uncertain.

Experts generally concur that this great drive towards renewables will push up costs for business given that renewables are not yet using mainstream technology. Consumers too are bound to see sharp increases in their energy bills as Germany is forced to import ever more electricity from its French neighbour while it waits for its green revolution to take hold. Already in April alone, Germany imported 43 per cent more electricity from France at an additional cost of about €60m ($86.6m), according to French officials.

So if Ms Merkel aimed to win short-term political gains with her U-turn on nuclear power, she may well find these could eventually turn into quite significant costs for herself, her party and her country.

To be fair to Ms Merkel, Germany is a special case. The Green party is particularly strong and public opinion has never been enthusiastic about nuclear power. Quite the opposite, in fact. There is clearly a limit to which an elected politician can go against the public will.

Yet Ms Merkel should also be aware of the potential dangers she faces by abandoning so quickly what was to have been Germany’s nuclear bridge to developing a more sustainable, environmentally friendly energy policy. For whatever the medium-term economic challenge Germany is likely to face as a result of this decision, the problems are even greater and more immediate for Europe.

Nobuo Tanaka, the veteran Japanese diplomat who is executive director of the Paris-based International Energy Agency, has warned that Germany’s lone-wolf policy may destabilise linked power grids throughout Europe. “It’s not German, it’s a European problem,” he says.

Germany will not simply end up importing nuclear-generated electricity from its neighbours. It will also have to import much more gas (presumably from Russia, making it even more dependent on Moscow), coal and oil. Inevitably this will push up prices for everyone else. Thus Germany’s unilateral decision could impact the competitiveness of not only German industry but of Europe as a whole already under pressure from an overvalued currency, at least against the US dollar.

It also shows a glaring weakness of Europe in the absence of a common energy policy. The fact that Germany could have made such a decision unilaterally when it has potentially such harmful implications for its European partners once again reveals the limits of the European project. Indeed, over the past year, time and time again, Germany has appeared to put its own interests over those of Europe as a whole.

In one sense, Germany is doing no more than taking its rightful place in the leadership of Europe. However, it seems with decisions such as this it is allowing domestic politics to cloud its European vision and leadership role.

On the other hand, there might be one small bright spot for France if it has the courage of its stated nuclear convictions and gives the go ahead to the construction of a second new-generation EPR reactor at Penly in north-eastern France. If France was ready to commit the huge financial resources and the political will for this project, it could build on its role as Europe’s nuclear factory, exporting its capacity to those countries that are not prepared to take on the atomic challenge.

Paul Betts is the FT's senior correspondent based in Paris

paul.betts@ft.com

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