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    Germany replaces Russian gas with coal, prepares to rehabilitate nuclear power plants


    August 3, 2022 - CE Noticias Financieras

     

      The transition to renewable energies will have to wait in Germany. The government of Chancellor Olaf Scholz approved the rehabilitation of a coal plant to feed the power stations and to use the gas coming from Russia to increase the reserves, which currently exceed 68%. But the energy crisis is straining the ruling coalition and some of its members are speculating about the electoral cost of the pragmatic measures Scholz is considering these days.

      Christian Lindner, Minister of Finance and leader of the Free Democratic Party (FDP), does not rule out reactivating more coal-fired plants and is one of the main advocates of postponing the closure of the nuclear plants scheduled for the end of the year. He even suggested that those that have already been deactivated should be brought back into operation and thus supply gas for electricity production, which would mean a saving of around 10%. The Greens, the second largest coalition partner behind Scholz's Social Democrats, are opposed.

      Party co-chair Ricarda Lang said Sunday that Lindner will not have the Greens' support on nuclear, a logical position for a formation that was born in the early 1980s with a program that rejected the construction of nuclear power plants and the use of this energy: abandoning that banner, even for a limited period of time, would imply a kind of betrayal of party identity. However, the Lindner Liberals have the backing of the opposition and the business community.

      The Prime Minister of the Bavarian region, the conservative Markus Söder, went so far as to ask the federal government to resort to fracking to extract gas on German territory and proposed that nuclear power plants remain in operation until 2025 - Lindner's plan sets the deadline one year earlier - because there is "the risk of a cold winter and the impoverishment of the middle class". The Greens hold Söder's party, the Christian Social Union of Bavaria, responsible for having contributed to deepening dependence on Russian gas during Angela Merkel's 16 years as her government's main allies.

      Scholz is confident that he will reach November with gas reserves well above the 80% imposed by Brussels. Economy Minister Robert Habeck spoke of 95 percent. For some, this is too optimistic a scenario

      Scholz and the Greens are wary of the rapprochement between Lindner's Liberals and Söder's Bavarian Christians. Both lead their respective parties and now have the support of Stefan Wolf, the president of the metalworking employers' association Gesamtmetall, who has asked the government to keep the Isar 2, Neckarwestheim 2 and Emsland power plants in operation. Energy is essential for industry and thus for the economy as a whole. Wolf warned that "Germany's reputation is also at stake" and linked the total cut-off of Russian gas supplies to a national emergency scenario.

      Wolf seems equally concerned as the businessmen alluded to recently by Annalena Baerbock, the foreign minister, who declared that gas shortages could lead to "popular uprisings" in the country. Baerbock is the co-chair of the Greens and ruled out the nuclear option, saying that the only alternative is to save gas for the winter. Scholz is confident that he will reach November with gas reserves well above the 80% imposed by Brussels. Economy Minister Robert Habeck spoke of 95%. For some, this is too optimistic a scenario.

      Baerbock demanded an electrical safety stress test before assessing a possible rehabilitation of the still open nuclear power plants. The Greens and Scholz's Social Democrats supported Merkel's decision in the past to dispense with nuclear power in Germany after the accident at the Fukushima power plant in Japan. The country was then buying cheap and abundant gas from Russia and hardly questioned the deal. Were it not for the invasion of Ukraine, the Nord Stream 2 pipeline would now be fully operational. The German parties cannot look the other way after having ruled out a plan B for decades.

      Habeck, also number two in the Executive, is in a position to convince the leaders of the Greens about the possibility of a kind of nuclear amnesty, a gesture of pragmatism that the coalition might appreciate. Scholz has to balance between the liberals and the environmentalists to hold together the alliance that is about to complete eight months in power. The government debuted in December and war broke out at the end of February. The energy issue generates differences as did the delivery of armaments to Ukraine and the corporate windfall profits tax.

      The project is encouraged by Habeck and nuclear power plants could be the bargaining chip, but Lindner opposes the tax and disagreements surface at any challenge to the coalition. The agreement between all the governing parties is to counteract the impact of the crisis on German incomes, and energy is a central issue that is forcing each of the formations to review the pacts that made it possible to inaugurate the post-Merkel era. Scholz fears that the exceptional war scenario will become the rule and set the course for the Executive in the remaining years.

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