Professional Documents
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Shutdown of Nuclear
Power Plants:
What to Do Next?
REPORT by Christian von Hirschhausen, Clemens Gerbaulet, Claudia Kemfert, Felix Reitz and Cornelia Ziehm
293
302
303
2015
12
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REPORT
2015
The DIW Economic Bulletin contains selected articles and interviews from
the DIW Wochenbericht in English. As the institutes flagship publication,
the DIW Wochenbericht provides an independent view on the economic
development in Germany and the world, addressing the media as well as
leaders in politics, business and society.
10
The DIW Economic Bulletin is published weekly and available as a free download from
DIW Berlins website.
Volume 5
June 3, 2015
ISSN 0012-1304
Publishers
Prof. Dr. Pio Baake
Prof. Dr. Tomaso Duso
Dr. Ferdinand Fichtner
Prof. Marcel Fratzscher, Ph.D.
Prof. Dr. Peter Haan
Prof. Dr. Claudia Kemfert
Dr. Kati Krhnert
Prof. Dr. Lukas Menkhoff
Prof. Karsten Neuhoff, Ph.D.
Prof. Dr. Jrgen Schupp
Prof. Dr. C. Katharina Spie
Prof. Dr. Gert G. Wagner
Reviewer
Prof Dr. Dorothea Schfer
Dr. Kerstin Bernoth
Editors in chief
Sylvie Ahrens-Urbanek
Dr. Kurt Geppert
Editorial staff
Renate Bogdanovic
Andreas Harasser
Sebastian Kollmann
Marie Kristin Marten
Dr. Wolf-Peter Schill
Dr. Vanessa von Schlippenbach
Translation
Miranda Siegel
Layout and Composition
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292
NUCLEAR POWER
1 Initially, the operating licenses were only withdrawn for three months; in
summer 2011 they were withdrawn permanently.
Figure1
Grafenrheinfeld
Gundremmingen B
Philippsburg 2
Grohnde
Gundremmingen C
Brokdorf
Isar 2
Emsland
Neckarwestheim 2
20
15
20
16
20
17
20
18
20
19
20
20
20
21
20
22
20
23
20
24
20
25
Source: DIW Berlin based on the Atomic Energy Act from 28 August 2013.
DIW Berlin 2015
The last nuclear power plant in Germany will shut down in 2022.
293
Nuclear Power
Figure2
Brunsbttel
Brokdorf
Lubmin
Stade
Unterweser
Interim Storage
North
Krmmel
Rheinsberg
Emsland
Interim Storage
Ahaus
Final Storage
Morsleben
Grohnde
age facilities close to the power plants themselves.3 However, the operating licenses of these plants will expire
by 2046, and even the intermediate storage containers
(CASTOR) for fuel elements have an operating license
of only 40years.
In addition to the technical aspects of the final disposal,
the economic challenges are increasingly coming into
focus. The costs of the entire process, which is expected to continue into the next century, are not only very
high, but also fraught with considerable uncertainties.
There is mention of 50 to 70billion EURwhich is
nearly twice the value of the provisions that have been
set up by the NPP operators. 4
Asse II Mine
Biblis
It is expected that the June 2015 shutdown of the Grafenrheinfeld nuclear power plant will create only minimal
consequences for the energy sector. Both in Germany
as well as in other European countries, there are sufficient reserves available on the electricity market to compensate for the loss of the 1,275-megawatt (MW) net output. Calculations show that around half of the reduced
annual electricity production in Germany can be compensated for with five terawatt hoursmainly by coal,
but also by lignite and natural gas. The difference will
be provided from abroad.5
Grafenrheinfeld
Philippsburg
Neckarwestheim
Gundremmingen
Isar
* Under construction
The nuclear power plant Grafenrheinfeld will shut down in June 2015.
2 The plants operator, E.ON, had originally scheduled May 31, 2015 as the
shutdown date, as staying in operation until the legally determined end date of
December 31, 2015 would have required the replacement of fuel elements and
the payment of the nuclear fuel tax. An unexpectedly low utilization in the
recent mild winter months has allowed E.ON to keep the plant in operation
longer, and thus the closure was postponed to June 20, 2015. See: Bavarian
Broadcasting (2015): AWK Grafenrheinfeld bleibt bis 20. Juni am Netz
(Grafenrheinfeld NPP to remain on the grid until June 20), http://www.br.de/
nachrichten/unterfranken/inhalt/akw-atomkraftwerk-grafenrheinfeldlaufzeit-100.html, retrieved May 13, 2015.
294
Nuclear Power
6 In DIW Berlins earlier model calculations, as well, it was shown that the
current electricity system can cope with the loss of nuclear capacity. See: Kunz,
Friedrich, et al. (2013): Mittelfristige Strombedarfsdeckung durch Kraftwerke
und Netze nicht gefhrdet (Medium-term electricity supply from power plants
and grids not at risk). DIW Berlin Weekly Report 48-2013, pp 2537. The
calculations carried out in that instance include a detailed network modeling.
A recent study conducted by the Central and Western European network
operators for the period of 2020/21 also came to the conclusion that there are
no bottlenecks in the German power grid. See: Pentalateral Energy Forum
(2015): Pentalateral Generation Adequacy Probabilistic Assessment. Support
Group Generation Adequacy Assessment, Final Report, March 5, 2015 online:
http://www.bmwi.de/BMWi/Redaktion/PDF/G/gemeinsamerversorgungssicherheitsbericht,property=pdf,bereich=bmwi2012,sprache=de,rwb
=true.pdf, retrieved May 13, 2015.
7 In an ordered price duration curve, all 8,760 hourly wholesale prices from
the course of one year are depicted in descending order.
8 This alternative scenario with reduced commodity prices assumes a price
of 10 EUR (instead of 21 EUR) for each ton of CO2 emitted and a natural gas
price of 20 EUR (instead of 27 EUR) per megawatt hour (thermal).
80
01
70
01
60
01
50
01
40
01
30
01
20
01
0
1
Figure3
10
01
1 In descending order.
Source: DIW Berlin.
DIW Berlin 2015
295
Nuclear Power
program. Although the commercial use of nuclear power has been permitted in the Federal Republic of Germany ever since the passage of the Atomic Energy Act
(AtG) in 1959, a safe option for the disposal of radioactive waste did not exist at that time. Only with the 1976
adoption of the Fourth Amendment to the Atomic Energy Act did the legislature establish a duty whereby the
waste producers were ordered to remove the radioactive
waste in an organized manner. Moreover, the law established henceforth the need for planning permission
for a nuclear repository.
For the final disposal, the Federal Ministry for the Environment, Nature Conservation, Building and Nuclear
Safety (BMUB) is expecting a volume of around 190,000
cubic meters of low- and mid-level radioactive waste
from German nuclear reactors. Along with other radioactive wastes, these are scheduled to be stored in the
Konrad repository, which is currently being constructed.11 Since the entire 303,000-cubic meter capacity of the
Konrad repository has already been completely allocated, there is no space for the waste that is envisaged to be
retrieved from the Asse II minean additional volume
of about 175,000 to 220,000 cubic meters, according to
Figure4
the BMUB. To accommodate this waste, another repository would be needed; alternatively, the Konrad repository would need to be expanded. At present, the Federal Office for Radiation Protection (BfS) is making plans
for an interim storage facility.
For the so-called heat-generating wastewhich refers
to the high-level radioactive waste that includes spent
fuel elements, as well as the radioactive waste that originates from the reprocessing of irradiated nuclear fuel
and is solidified in glass canistersthe BfS expects a
waste volume of 28,100 cubic meters.12 For this highlevel radioactive waste, there is still no final repository,
or even a planned repository site.13 The only attempt to
build such a repository for high-level waste took place
in Gorleben, where the investigations of a salt dome
to house such waste have been ongoing since 1979. A
certificate of suitability based on geoscientific investigations, however, does not exist for the Gorleben salt
dome. As well, no alternative locations have been examined more thoroughly thus far. The selection process of
the 1970s, which ended with the selection of Gorleben,
did not meet the necessary conditions.14 So far, the costs
of the Gorleben salt dome investigations have reached
1.6billion EUR.15
1 The begin of waste disposal in 2050 is an estimate. The actual timing is uncertain and might be delayed
significantly.
Source: Endlagerkommission (Commission for the Storage of Highly Radioactive Waste, 2015): Prozesswege
zu einer sicheren Lagerung hoch radioaktiver Abflle unter Aspekten der Rckholbarkeit/Bergbarkeit/
Reversibilitt, Papier der Vorsitzenden unter Einbeziehung von Kommentaren weiterer Mitglieder der AG 3,
Kommission Lagerung hoch radioaktiver Abfallstoffe gem Paragraf 3 Standortauswahlgesetz, K-Drs./
AG3-12, 11. April 2015.
DIW Berlin 2015
The waste disposal process will likely extend into the next century.
296
Nuclear Power
Table1
Provisions for decommissioning and dismantling of commercial nuclear power plants and final disposal of nuclear waste
in Germany1
In million Euro
Owner's declarations to
the BMWi
Provisions for nuclear
power 2013
Collection
by Becker/Bttner/Held
based on annual
financial statements
There of
Sum of
decommissioning
columns 2 and 3
and dismantling
There of
final disposal
E.ON
14,607
14,607
1,134
15,741
10,308
5,433
RWE
10,250
10,250
790
11,040
4,769
6,271
EnBW
7,664
7,664
570
8,234
4,515
3,719
Vattenfall
1,652
1,659
91
1,751
1,155
595
1,805
1,805
149
1,954
900
1,054
35,878
35,985
2,735
38,720
21,647
17,072
Total
1 As of 31.12.2013.
Source: Duper, O., Fouquet, D. (2014): Finanzielle Vorsorge im Kernenergiebereich297Etwaige Risiken des Status quo und mgliche Reformoptionen. Studie im Auftrag des Bundesministeriums
fr Wirtschaft und Energie. Berlin, 10. Dezember 2014, 25 f.
DIW Berlin 2015
For the tasks ahead 36billion euros were provisioned in Germany by the end of 2013.
297
Nuclear Power
298
Nuclear Power
Table2
Selected financing models for decommissioning and waste disposal in other European countries
Switzerland
Finland
Sweden
Costs to be covered
Decommissioning and Dismantling of commercial Decommisisoning and dismantling of commercial Decommisisoning and dismantling of commercial
reactors and intermediate storage, disposal of
and research reactors; disposal of nuclear waste and research reactors; disposal of nuclear waste
nuclear waste
CHF 20.65 bn
EUR 2.3 bn
SEK 123 bn
Financing
Volume
diversified portfolio
Source: DIW Berlin, based on Kchler, S. et al.(2014): Atomrckstellungen fr Stilllegung, Rckbau und Entsorgung Kostenrisiken und Reformvorschlge fr eine verursachergerechte Finanzierung,
Studie des Forums ko-soziale Marktwirtschaft im Auftrag des Bund fr Umwelt- und Naturschutz. Berlin, Oktober 2014.
DIW Berlin 2015
nuclear law and thus the cost of dismantling may ultimately be higher than expected. As well, the provisions
that have been set up most likely include no risk premiums to cover the potential costs of any necessary recoveries of radioactive waste, or redevelopments of the repositories after their closures.31 The costs of the site selection process as well are to be borne proportionally by
the waste producers. In particular, the investigation of
areas that come into consideration as well as the aboveand underground explorations of sites, including the respective safety investigations, have to be refinanced.32
Because the state of science and technology is continually developing, the requirements emanating from the
31 See: Meyer, B. (2012): Rckstellungen fr Rckbau und Entsorgung im
Atombereich Analyse und Reformkonzept. Zeitschrift fr neues Energierecht,
3/2012, 239.
29 See: Kchler, et al. (2014, p. 12).
30 For example, in 2012 the French Court of Auditors raised the original
estimate of the final disposal costs from 1416billion EUR to 35billion EUR; in
England, the cost estimates for the dismantling and cleanup of the nuclear
sites increased from 57billion British pounds (2004/05) to 104billion British
pounds (2012/13); see: Lnderberichte in Brunnengrber, et al., (2015, ibid).
32 Ziehm (ibid, p. 26) additionally criticizes the fact the total sum does not
include costs that the nuclear power plant operators would likewise have to
bear according to the polluter pays principle: This refers to the proportional
costs for the safe closures of the Morsleben repository (approximately
2.2billion EUR) and the Asse II repository, for which the total level of costs is
still unknown.
299
Nuclear Power
300
Nuclear Power
301
INTERVIEW
302
Since 2001, Germany has exhibited high current account surpluses, i.e., it has invested a lot more capital
abroad than foreign investors have invested in Germany.1 Germanys net foreign assets now constitute more
than 40% of its gross domestic product (see Figure1).
Since 2006, however, Germany has suffered accumulated valuation losses amounting to more than 20% of the
annual economic performance on its net foreign assets
(see box1). These losses have occurred even though Germanys nominal effective exchange rate changed very
little over this period. Other Eurozone countries such as
Belgium, Italy, or Austria saw profits in the same period
or, like France, were able to generally avoid losses. Even
countries outside the Eurozone, such as Japan or Switzerland, have seen profits since 2006. Germany is not,
however, an isolated case. Several other countries such
as Belgium, the Netherlands or Switzerland suffered
short-term or early losses that, in relation to GDP, were
similar to or even higher than Germanys recent losses.
The contrasting development of the USAs net foreign
assets is particularly noteworthy. In the past, the USA
has been able to achieve consistently high gains on valuations, with peak valuations between 2002 and 2007.
In this way, they have managed to contain their negative
net foreign asset position despite high current account
deficits since the beginning of the 1990s.
303
Figure 1
USA
60
40
Cumulated Current Accounts
40
20
-20
0
-40
Cumulated Current Accounts
-60
1991 1994 1997 2000 2003 2006 2009 2012
United Kingdom
10
France
5
0
-5
-10
-15
40
Belgium
20
Austria
0
-20
Japan
Switzerland
-40
Italy
-20
-60
Netherlands
-80
-100
304
Box 1
CVGT =
and value gain (VG t), which becomes negative in the case of
a loss of value.
t=T
(NFA NFA
t
t=0
t=T
t1
CAt)= NFAT
CA
t=0
CVGTFDIA =
(K
t=0
t=n
FDIA
t
FDI
t=0
A
t
bonds category. This makes a comparison between Germany and the US especially interesting. Third, all these
countries have a well-developed finance system with international finance centers. Their finance systems are,
however, not so significant in relation to GDP that they
themselves could cause substantial value fluctuations,
as in the case of the United Kingdom or Switzerland.
The following section will examine in which investment categories valuation losses occurred.2 For this
purpose, assets and liabilities are divided into foreign
direct investment, portfolio investments in equity securities (such as stocks and funds), portfolio investments in fixed-income securities (e.g., government
and corporate bonds), as well as other investments
(such as loans, including trade credit and savings deposits). Official reserves and financial derivatives (for
which data coverage is limited) are not considered. The
following discussion will concentrate on the period
between 2006 and 2012, because the losses on German net foreign assets occurred at this time. For op-
305
Figure 2
Figure 3
25
20
15
France
20
10
15
USA
5
10
0
-5
-10
Japan
Germany
5
0
-15
France
20
10
USA
0
-10
Germany
Japan
-20
1991 1994 1997 2000 2003 2006 2009 2012
France
Germany
15
10
5
0
Japan
-5
USA
hand, barely seen any losses on their investments in Germany since 2006, although these were subject to high
volatility. Among the countries under consideration, the
US once again shows high net valuation gains between
2002 and 2006. In subsequent years, however, the US
suffered losses in this category, while Japan and France
reported moderate gains.
306
Figure 4
Figure 5
Net
7.5
15
USA
10
5.0
USA
Germany
2.5
5
Japan
-2.5
Germany
-5
Japan
0.0
-5.0
France
-7.5
-10
France
-15
-10.0
1991 1994 1997 2000 2003 2006 2009 2012
Assets
Assets
25
25
USA
20
20
10
10
USA
Germany
5
France
Japan
0
-5
France
15
15
Japan
-5
Germany
-10
1991 1994 1997 2000 2003 2006 2009 2012
Liabilities
Liabilities
30
25
20
France
USA
15
France
20
10
10
USA
Germany
Japan
-10
Germany
Japan
-20
-5
1991 1994 1997 2000 2003 2006 2009 2012
behavior? This question will be addressed via a simulation. We will investigate whether Germany would have
been able to achieve a higher total return on foreign assets with the same foreign asset structure as the US.
From the analysis thus far, it is clear that Germanys performance since 2006, in all investment categories except direct investment, has generally been worse than
that of the other countries in the study, especially the
USA. Can Germany learn from the USAs investment
307
Figure 6
USA
10.0
7.5
France
5.0
Germany
2.5
0.0
-2.5
Japan
-5.0
1991 1994 1997 2000 2003 2006 2009 2012
Assets
As a matter of fact, a corresponding simulation for Germany (as well as for France and Japan) results in a markedly higher return for the last six years. According to the
results of the simulation, using the USAs investment
structure would have produced a yield of 5.8% (rather than a negative return of 1%). This would be almost
as high as the 8.7% yield the US was able to achieve in
the same period. This thought experiment illustrates
how keenly the US can profit from its role as safe hav-
20
15
France
10
5
Japan
0
USA
-5
Germany
-10
When the differences in total returns between receivables and liabilities are each summarized as six-year averages (Table1), we can see that Germany exhibits a negative total nominal return difference over all periods under consideration. Japan and France, however, also often
exhibit a negative or very small positive return over the
same periods. According to available data, only the US
was able to achieve a high return difference across the
whole period, which even increased over time. It would
be interesting to see if, given the same interest payable
on receivables and liabilities as in the past, but with the
same capital assets structure as in the US, Germany
would have been able to achieve a higher total return.
-15
1991 1994 1997 2000 2003 2006 2009 2012
Table
Liabilities
20
15
France
10
5
Actual Return
Differential
Japan
0
USA
-5
-10
Germany
-15
308
Simulated Return
Differential2
France
19931999
20002006
20072012
0.0
1.1
0.1
1.8
1.9
6.2
Germany
19931999
20002006
20072012
2.9
0.5
1.0
0.3
0.8
5.8
Japan
19931999
20002006
20072012
0.4
5.8
0.4
3.6
2.4
3.3
USA
19931999
20002006
20072012
4.3
5.8
8.7
4.3
5.8
8.7
Box 2
rtAj =
ItAj VG tAj Aj
i + vgtAj
+
A jt1 A jt1 t
Aj
Aj
1 See for instance Lane and Milesi-Ferretti, 2001, The External Wealth of
Nations Mark II, Journal of International Economics vol. 55(2), pages
263-294; also Habib, 2010, "Excess returns on net foreign assets: the
exorbitant privilege from a global perspective," Working Paper Series 1158,
European Central Bank.
Conclusion
309