Introduction

Nuclear energy has been reliably providing a quarter of Germany's base load electricity for many years but in 2001 the government legislated the phasing out of nuclear power by 2021. A newly elected government vowed to reverse this decision and has now in September 2010 agreed a highly controversial deal with four big energy companies to extend the lifetime of Germany's nuclear plants again.

Scope

* The background details of the German energy market including insights into the contribution made by Germany's 17 nuclear energy plants
* An in-depth guide to the details, benefits and disadvantages of the latest agreement reached by the government and the nuclear plant operators
* A balanced and informed opinion on the likely implications of the deal in light of Germany's environmental, economic, and political circumstances

Highlights

Although Germans are very concerned about environmental degradation and climate change, 13.5% ranked the impact and legacy of toxic nuclear waste as their top environmental issue. Nuclear energy policy in Germany has therefore been dominated by consensus and compromise - a trend that is likely to continue.

As an energy intensive country Germany has been trying hard to reduce its carbon emissions and has set itself ambitious targets above EU mandated levels. Similarly, the use of renewable energy has grown at impressive rates, and Germany aims to further develop this much more strongly in the coming years by using nuclear as a bridge technology.

In return for continuing to operate nuclear plants its operators will have to pay large amounts of levies and taxes, but they will also benefit from huge profits. The deal will guarantee that the government satisfies its many goals of achieving emissions targets, affordability and energy security, but it may come at a high political price.

Reasons to Purchase

* Increase your understanding of the facts surrounding the decision to extend nuclear energy in Germany
* Develop your opinion on the likely impact of the agreement on the German energy market including its future outlook
* Formulate arguments for lobbying and campaigning

Report Highlights
Although Germans are very concerned about environmental degradation and climate change, 13.5% ranked the impact and legacy of toxic nuclear waste as their top environmental issue. Nuclear energy policy in Germany has therefore been dominated by consensus and compromise - a trend that is likely to continue.

As an energy intensive country Germany has been trying hard to reduce its carbon emissions and has set itself ambitious targets above EU mandated levels. Similarly, the use of renewable energy has grown at impressive rates, and Germany aims to further develop this much more strongly in the coming years by using nuclear as a bridge technology.

In return for continuing to operate nuclear plants its operators will have to pay large amounts of levies and taxes, but they will also benefit from huge profits. The deal will guarantee that the government satisfies its many goals of achieving emissions targets, affordability and energy security, but it may come at a high political price.
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DATAMONITOR VIEW 2
Catalyst 2
Summary 2
ANALYSIS 3
Energy-intensive Germany draws its electricity from a range of fuels 3
Devoid of plentiful indigenous resources, Germany's energy is still mainly generated from coal 3
Germany is keen to reduce its carbon emissions and has made enviable progress towards installing renewable energy capacity 3
Nuclear power makes a safe and reliable contribution to energy generation in Germany 4
Electricity produced from nuclear energy remains a contentious issue in the German public domain 7
Although Germans are concerned about environmental degradation and climate change, 13.5% ranked the impact and legacy of toxic nuclear waste as the top environmental issue 7
Public opinion towards nuclear power in Germany is polarized, with strong opposition to nuclear energy 8
German nuclear energy policy is characterized by consensus and compromise 9
Changes in the political landscape allowed the German government to limit the lifecycles of nuclear plants 9
A new government promised to review the nuclear exit law and national energy strategy by the end of 2010 9
In return for longer running times nuclear plant owners will have to pay large sums of taxes and levies 10
However, the agreement does not extend as far as both sides might have hoped 11
Germany's long-term energy strategy requires ensuring energy security, emissions reductions and affordability 12
Energy demand is likely to grow in the future 12
Phasing out nuclear energy reduces the supply-demand balance to critical levels and will require greater electricity imports 13
The German government has consulted widely to inform its long-term energy strategy 14
Many stakeholders are deeply concerned about the potentially negative side effects of the latest nuclear extension 15
To many people, the aggressive and public lobbying by the big four utilities has invigorated the belief that politicians are corrupt and that the government has given in to the demands of a powerful nuclear lobby. 15
Nuclear plant owners will initially have to pay for the extensions granted, but they are also likely to benefit from substantial profits in the long term 16
Nuclear power in Germany will be necessary to ease the transition to a low-carbon age 16
APPENDIX 18
Methodology 18
Ask the analyst 18
Datamonitor consulting 18
Disclaimer 18
List of Tables
Table 1: Nuclear plants in Germany 4
Table 2: German nuclear plant lifetime extensions and voluntary payments 11

List of Figures
Figure 1: German nuclear plants safety record by INES categories 5
Figure 2: Electricity generation in Germany, by fuel type, 1991-2009 6
Figure 3: Opinions about environmental issues in Germany, 2010 7
Figure 4: Important environmental issues in Germany, 2010 8
Figure 5: Germany power demand forecast, 2008-30 12
Figure 6: Germany power supply and demand forecast (as per 2001 nuclear exit law), 2008-30 13
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