Setting a lower bound for a realistic cost of Germany's "energiewende"
Introduction
Germany is possibly the world leader in the transition away from fossil-fuelled energy to renewable energy, their “energy transition” or energiewende. It is difficult to find exact amount, but all the reports I see suggest that, to date, they have spent in excess of half a trillion Euros (€) and are projecting spending double this amount by 2030. Here we find that between 2000 and 2023 a total of €381 billion has been spent on “renewable energy plants”. There are other expenses, such as expansion of the transmission grid which is here projected as costing at least €50 billion. There also an annual expenditure on subsidies - in this report there’s mention of concerns “focussed on Germany's broader plan to spend up to €200 billion in subsidies to shield consumers and businesses from soaring energy costs”. The last two amounts are clearly estimates but in this 2018 paper we find the estimate of €500 billion and in this we learn that a German Minister predicted a cost (by 2030) of a trillion euro.
The exchange rate from from euro, EUR, to US dollars, USD, hovers in the region of 1.06, so €500 converts to something like $531.
How much electricity does Germany consume in a year?
According to this, Germany’s electricity consumption peaked at 555.91 TWh in 2010, in the period 2000 to 2021. As the graph shows, contrary to other jurisdictions, Germany’s consumption has not increased but stayed more or less constant in the last 10 years of the period.
Barakah Nuclear Power Plant
Establishing an lower bound is best done using the technology which is universally declared to be more expensive than renewables. For example, here’s a report on a study claiming that a "renewables-led energy mix in SA will be cheaper than nuclear". One must then ask: Why is the price of electricity to consumers in Germany amongst the most expensive of industrialised country in the world? In this report, for September 2023, Ireland is first (it has never had nuclear power), Italy is second (it has no reactors operating currently) and Germany is fifth - and more than twice the cost of electricity in South Africa (0.4 US dollars and 0.18 USD, respectively). In this report (dated April 2023), Germany is second after Denmark amongst industrialised nations). Surely, if renewables are so cheap, consumers relying on renewables should be paying less than those not relying on renewables, right?
Nuclear is deemed more expensive than renewables because it costs more to build a nuclear power plant than it does to erect solar panels or wind turbines. In this post I will compare the cost of building nuclear to the cost of Germany’s energiewende. I can do this because nuclear does not require the supporting infrastructure renewables do. So, my intention is to calculate the cost of sufficient nuclear to satisfy Germany’s demand - and treat that as the minimum cost permissible for the energiewende.
How much does it cost to build a nuclear power plant? The short answer is that there is a does cost and a should cost answer. Too many take the cost of certain recent projects as indicative of the cost of nuclear power construction in all cases. It is well known
The Barakah NPP is now practically completed (the 4th unit became operational at the end of February 2024) in the United Arab Emirates. Apparently, each unit is rated at 1337 MW (so 5348 MW in total but it is still too early to decide on an appropriate Capacity Factor (CF). In South Africa, Koeberg’s two units are operated with lifetime CFs of 72% so, to be conservative, I’ll use that value. In a year Barakah would produce
5348 (MW) × 24 (hours in a day) × 365 (days in a year) × 0.72 (CF) = 33,730,906 MWh.
How many Barakahs would produce 556 TWh in a year?
556 ×1000 (TWh to GWh) × 1000 (GWh to MWh) ÷ 33,730,906 = 16.48,
which I’ll round up to 17. That’s 91 GW of nuclear power:
17 (my estimate) × 5348 (MW) ÷ 1000 (MW to GW) = 90.916 GW.
How much would 17 Barakahs cost? Well, if one costs $24.4 billion, 17 would cost
17 × 24.4 = $414.8 billion or (dividing by 1.06) €391.3 billion.
Please be reminded that Germany has spent roughly this amount on renewable generators by 2023 (€381 billion) and, apparently, are only half-way to their goal!
Put another way, if the amount Germany has spent so far (€500 billion, $531 billion) had been used to build Barakahs, the spend would have been enough for 21.76 Barakahs; 22 Barakahs would have cost $536.8 billion or €506.415 billion. This number of Barakahs would involve
22 × 5348 (MW) ÷ 1000 (MW to GW) = 117.656 GW of reactor
which would produce
117.656 (GW) ÷ 1000 (GW to TW) × 8760 (hours in a year) × 0.72 (CF) = 742.08 TWh
Given that Germany closed in excess of 20 GW of nuclear power (which, in 2011, was generating 25% if Germany’s electricity, 549.21 TWh, it is clear that four times that, 80 GW would be sufficient to generate all of Germany’s electricity - so 22 Barakahs would do even better!
Conclusion
We keep hearing how renewables are cheaper than nuclear. These reports are generated by experts processing predictions into costs. We also keep seeing numbers from real life where actual experience suggests that there’s a flaw in the methodology of the experts.
This post another example where two realities suggest a different conclusion to that reached by experts. The post does not propose replacing all of Germany’s generation with nuclear power. It merely indicates that doing so would be cheaper than doing what Germany has done to date.