German Nuclear Utility Stocks Rise; Solar-Related Companies Fall on German Election Results

MarketWatch.com posted a article titled Nuclear power plant operators rise on center-right win. Here is the article lede:

FRANKFURT (MarketWatch) — German stocks and nuclear power plant operators in particular rose, while solar-related companies dropped Monday after election results indicated that a center-right coalition will be formed.

The September 27 German election provided Angela Merkel with the opportunity to form a coalition with the increasingly popular Free Democratic Party (FDP) rather than the fading Social Democratic Party (SDP). One of the main results of the election will be an effort to abandon the deal that the Social Democratic Party negotiated under the leadership of Gerhard Schroeder. That deal legislated a requirement to shut down the 17 nuclear power plants that currently provide approximately a quarter of Germany’s electrical power well before those power plants have reached the end of their useful service lives.

Here is another interesting quote from the MarketWatch article:

“As a nuclear power plant has very little variable cost, a transfer to other fuel sources or power purchases could have led to a massive decline in cash flows on the magnitude of several billion euros for all four operators, depending on future power prices,” Kleindienst said.

I would have said it differently. Shutting down the operating nuclear plants before the end of their useful service lives would have provided a massive increase in cash flows – on the order of several billion euros – to other fuel and power suppliers. It would have resulted in a decline in cash flow to the current low cost power plant operators. The customers who supply the cash and the taxpayers who provide subsidies for politically popular energy sources would have seen an increase in their cost of living and/or operating their businesses.

Since it costs almost as much to operate a nuclear power plant as it does to own the plant without operating it, the power from an existing plant is “too cheap to meter”. The competition HATES that aspect of nuclear energy systems.

Perhaps that way of stating the case will help people understand why combustion turbine engineers like Mirko Bothien would give the following comment to a UPI reporter:

“The CDU and the FDP bank on cheap energy production to help the German industry. Let’s hope this does not go at the expense of climate protection,” Bothien told UPI in an interview.

The physicist gave his vote to the Greens, “because their party program is the most ambitious when it comes to supporting renewable energy sources.”

No wonder the reporter’s main impression from the interview is that Bothien “is not too excited by the new government’s plans for the future German energy mix.”

I did a little Googling on Mr. Bothien; he produces a lot of published papers on combustion turbines in addition to working for a large Switzerland-based energy company. Suppliers of natural gas or distillate fuel burning turbines would have been beneficiaries of the nuclear plant phaseout. They hoped to gain additional sales volume from the need to replace the electrical power produced by the 17 emission-free nuclear power plants that the government had planned to force to shut down.

Now all of those carefully laid plans are at risk. Darn – got to hate that “cheap energy production” that the CDU and FDP “bank on”. I wonder if Mr. Bothien understands that retaining nuclear power plants in operation cannot possibly be at the “expense of climate protection”? Maybe he should stick to engineering instead of political commentary.