From opposite directions, France and Germany converge on climate change
By Umair Irfan
Across the Rhine, Europe’s two largest economies regard each other with a raised eyebrow as they take their energy systems in different directions, ostensibly to reach the same goal.
The biggest difference is nuclear power, to which the French said “bien sûr” and the Germans said “nein danke.”
But with an overlapping electrical grid and a shared currency, the two nations’ energy systems are inexorably linked and must work together if they hope to make meaningful progress to address climate change. In the process, France and Germany will serve as important case studies for countries like the United States that are embarking on their own energy transitions.
“The Germans are not like the French and vice versa,” said Mycle Schneider, an independent energy consultant.
Over the past 40 years, France built itself into a nuclear energy stalwart, generating 78 percent of its electricity from splitting atoms in a robust domestic industry. Though the country licensed its reactor designs from Westinghouse, an American firm, the nuclear sector — both energy and weapons — became a point of national pride in France.
Germans, however, were always more wary about nuclear energy. While split in half during the Cold War, Germany never developed a nuclear weapons program, building parallel nuclear energy sectors in the East and the West from scratch.
The vociferous green movement in Germany stridently opposed nuclear power and gained momentum after the 1986 Chernobyl disaster. Many Germans still recount injunctions against drinking milk and picking mushrooms in their gardens in the wake of the accident, a specter that haunts discourse around nuclear energy to this day.
Though German Chancellor Angela Merkel broached extending operating licenses for German nuclear plants when she took office, the Fukushima Daiichi accident in 2011 and the ensuing public revolt led her to reverse course, setting a goal of switching off all remaining nuclear generators by 2022.
German renewables vs. cheap French electricity
Germany currently gets 17 percent of its electricity from its nine remaining reactors.
While nuclear runs down, renewable energy is ramping up. The nuclear scale-down gave Germany’s Energiewende, or energy transition, a huge boost. The program set ambitious targets of 35 percent renewable energy on the grid by 2020 and 80 percent by 2050. Germany also wants to bring its carbon emissions down 80 percent below 1990 levels by 2050.
With policies like aggressive feed-in tariffs for wind and solar, Germany’s domestic renewable industry blossomed, employing 370,000 people, more than conventional power producers. Germany is also a net energy exporter.
Solar energy was a particularly bright spot: Germany leads the world with more than 38 gigawatts of solar power, mostly through rooftop installations, which provide 7 percent of the country’s electricity. In the process, Germany shifted the global solar industry, precipitously driving down solar panel prices around the world through deployment and economies of scale.
However, German households pay some of the highest retail electricity rates in Europe at $0.32 per kilowatt-hour (ClimateWire, Oct. 22, 2014). And countries like China took advantage of Germany’s generous subsidies and flooded the market with cheap photovoltaics, undercutting German producers.
Another important difference between France and Germany is that they use energy differently. For example, a report last year ranked Germany first in energy efficiency, with France coming in fourth (ClimateWire, July 18, 2014).
Meanwhile, France uses electric heating in one-third of existing homes and three-quarters of new homes because electricity is so cheap. During winter, every degree Celsius drop in temperatures increases demand by 2.3 GW.
“Efficiency is very bad in France. To a certain extent, waste has been encouraged for decades,” Schneider said. “The building codes were only recently made more stringent.”
Germans, on the other hand, tend to favor district heating and biomass and have led the way in developing passive house standards.
Per capita, France consumes 7,292 kWh and emits 5.6 metric tons of carbon dioxide while Germany consumes 7,081 kWh and emits 9.1 metric tons, according to the World Bank.
Natural gas struggles and declining utility sales
On the other hand, France and Germany have a lot in common when it comes to energy, perhaps more than either would like to admit.
Over the past decade, green parties have gained seats in national legislatures across Europe, but especially in France and Germany. These parties oppose nuclear power and support renewables.
Both countries also depend on natural gas for heating and for peaking power to meet demand spikes. However, natural gas is expensive in Europe, especially when compared with the United States, and Russia is the largest supplier, so many countries are desperately weaning themselves off the fuel for economic and geopolitical reasons.
This is a big part of why both France and Germany experienced an embarrassing increase in greenhouse gas emissions two years ago as natural-gas-fired generators yielded to cheaper but dirtier coal. The natural gas boom in the United States played a role, as well, because low natural gas prices forced American coal producers to sell abroad, further driving down prices for fossil fuels. Emissions have since declined in France and Germany.
The utility sectors in France and Germany are also struggling to cope with the economic downturn, rising regulatory costs and increasing competition from renewable energy. France’s main utility, EDF, reported a decline in power sales this year, and reactor builder Areva is on the brink of insolvency.
Utilities in Germany desperately held their ground as distributed intermittent renewables ate away sales from centralized coal, natural gas and nuclear power plants. Germany’s two largest utilities, E.ON and RWE, both saw income from their conventional generators fall by one-third since 2010, according to a report in The Economist.
Last year, E.ON decided to split its conventional generation from its renewable energy business. Rival RWE recently expressed interest in doing the same.
It’s a phenomenon repeating all over Europe: In 2008, European utilities were valued at $1.3 trillion but are now worth half that, in part due to building for growing energy demand that failed to materialize due to the global economic downturn.
In government, both countries are backing away from their signature policies. The French are drawing down on nuclear, proposing to bring it down to 50 percent, and the Germans scaled back their feed-in tariffs drastically last year.
“At the beginning it was mostly political, and now more and more it’s a problem of cost,” said Bernard Laponche, an energy policy analyst who worked for the French Nuclear Energy Agency.
Developing a mutually beneficial strategy
The question now is how to bend these trends to align with climate ambitions. The ultimate goal is to get rid of fossil fuels, and France with its nuclear power and Germany with its renewables could team up to lead the charge.
Last month, Chancellor Merkel and French President François Hollande backed long-term cuts in greenhouse gas emissions, echoed in a Group of Seven (G-7) communiqué this month that called for all countries to cut emissions by upward of 70 percent below 2010 levels by midcentury (ClimateWire, June 8).
Both France and Germany will still have to blend waves of wavering renewable power with nuclear baseload generation that prefers to run at full blast. “A problem you’re going to face globally is how you’re going to accommodate variable renewables,” said Antony Frogatt, a senior research fellow at Chatham House, an international affairs think tank. “System balancing is the challenge everyone is facing.”
Keith Crane, who leads the environment, energy and economic development program at the Rand Corp., explained that because France and Germany trade energy on the same grid, they could devise mutually beneficial energy strategies. “It doesn’t mean that France needs new generation,” Crane said. “There just has to be enough power.”
“I think France’s installed nuclear power capacity is very helpful in Europe,” he added.
Critics of Germany’s Energiewende love to point out that Germany buys French nuclear power on still, cloudy days, but the reverse is true as well, since German renewables are dirt cheap on the spot market and occasionally compensate for French reactors that are offline for maintenance or because their sources for cooling water get too hot during the summer. Better coordination across the Maginot line could help both countries cope with the changing energy landscape.
Over the Atlantic, the United States is at the precipice of changing its energy system as greenhouse gas restrictions get ready to go into effect and new approvals have put nuclear power back on the table. While new nuclear power plants are not in the cards anytime soon, the Nuclear Regulatory Commission in 2012 approved four new reactors at existing plants.
Meanwhile, China is operating 21 nuclear reactors and is building 28 more. Countries like the United Arab Emirates are also investing in nuclear power.
Everyone, however, will be watching whether pride and rigor will converge or collide in pursuit of a cleaner energy future in both countries.