Germany's move away from nuclear power could potentially increase electricity bills by 20%
Shares of major uranium miner Cameco doubled from June 2010 to February 2011. Uranium juniors like UEX Corp. performed even better. UEX's shares rose 298% from May 2010 to February 2011.
In the wake of the Fukushima Daiichi accident in Japan 10 months ago, Germany decided to shut down its nuclear power plants. Specifically, German legislators voted last May to decommission all of Germany’s nuclear reactors, 17 of which were built by Siemens and which provided up to one quarter of the country’s electricity. Four months later in September, Siemens announced its withdrawal from the nuclear power industry, citing “the clear positioning of German society and politics” for its pullout.
The decommissioning of nuclear plants is not cheap especially considering the potential cost of replacing the lost energy capacity with renewables. Earlier this week Michael Suess, executive of Siemens’ energy sector confirmed this thought. He stated that moving away from nuclear power to focus on renewable options of equivalent generation capacity could cost EUR 1.7 trillion by 2030. He added that this amount equates to approximately two-thirds of Germany’s 2011 GDP. He went on to note that a more cost effective option would be to replace the lost energy capacity with natural gas at a cost of EUR 1.4 billion.
From the consumer perspective, Germany’s Energy Agency (Dena) recently estimated that the country’s move away from nuclear power could potentially increase electricity bills by 20% by 2020. Suess also remained critical of the renewable energy option citing that feed-in-tariffs paid by utility companies to renewable generators and the costs of investing in new transmission infrastructure will also contribute to the high estimated costs of the plan’s implementation. Critics of the plan have also questioned current pricing incentives by the German government for renewable energy, saying that generators have no incentive to improve their systems.
