The German government, supported by strong transversal parliamentary support (a rare event), has recently approved the shut-down of its nuclear plants by 2020, a mere 9 year from now.
Is this decision driven by the Fukushima incident or by a more solid business case? Fukushima demonstrated that far beyond any reasonable doubt, the risk level of any nuclear plant is independent from external risks, such as an earthquake or a tsunami, but is intrinsic in the project design itself and there is nothing anybody can do to diminish or even control similar risks. An engineering-flawed project cannot be corrected easily.
The economic side of the question is: who will pay for the damages? The Japanese Government and hence taxpayers who are already financing the supposedly lower cost of nuclear energy which they have never, however, enjoyed.
Most nuclear plants are anticipating higher tariffs in order to recover the enormous financial exposure they have accrued, far before the 30-60 years of a plant’s potential life cycle.
In the entire world, no insurance company has ever contracted protection against nuclear risk, and this will create an unacceptable financial exposure to any potential investor.
Another major drawback to be faced is that not one single country has come up with a viable solution to the nuclear waste issue. Hence, even this high risk business is still dispersed and unmanaged, nor accounted for into the energy cost. But these are not the only notable reasons which have convinced Frau Angela Merkel and the entire German parliament to come to this ruling!
The real reason is that the production cost of electricity by nuclear plants is already higher than that of electricity produced by solar systems and the balance is fast shifting even more in favour of solar panels, not to mention energy efficiency, thermal solar and co-generation.
Germany has already matured a significant competitive advantage in both research and production of sustainable energy. Angela Merkel’s decision is moving the pendulum even more toward guaranteeing her country’s strong competitive position in the industry of the future centuries.
The close deadline imposed by Frau Merkel in 2020 is feasible. By that deadline, Germany will be the first and only country in the world to be energetically self-sufficient and in a fantastic competitive and unique position. While all the other countries will continue to pay a ruinous toll to the oil and gas Arabian and Russian companies of the world, the exploding cost of uranium was only partially postponed by the USA-Russia agreement to re-utilize 5000 dismissed bombs: this will delay the price crisis by only 8-10 years.
China and India will need to embark in costly wars (military or commercial) to sustain the welfare of their population through the supply of affordable energy.
Germany will be the only country to be out of oil and nuclear dependence (it is expected that uranium will end before oil). Being the first, the most advanced as well as 100% self sufficient, Germany will have acquired the immense advantage of having the biggest internal market to drive this business evolution.
Frau Merkel seems to be one of the few to have read the Pentagon’s inspired Study “Winning the oil-end-game” R.M.I. 2005. In that study, the Pentagon wisely accounted for the cost of fighting for oil, gas and uranium. It concluded that it would be unsustainable for any country and for the USA in particular.
The entire defense budget is currently experiencing enormous financial abatements, because the immense government debt of the USA is already making the US army unsustainable today. On the other hand, both China and India are capitalizing on this trend in order to expand their global influence.
Today, it can be stated that there is only one solution to the global future of the production of energy. It must be switched and driven toward renewable sources and private companies will profit; this project must start soon, to avoid the detonation of the oil end-game that will be driven and won by the Arab and African countries and Russia.
Germany is the best positioned country in the world to win this war and by 2020, which means 30 years before any other country. This is the principal reason why Frau Merkel did not obstruct the entire German parliament and decided to begin the big-shift campaign immediately.
Pure and good business logic, supported by sound experience and evident success in the early stages, complemented by the stupid and dumb position of competitors who are still indulging on nuclear and other fossil problems.
Why are all the other politicians of the world not moving in the same direction but are continuing to wait for Germany’s accounts to augment? We will see a rush that will subvert the stocks of many companies and the debt position of many countries. Keep a look out for Germany’s data; it will be in the position to buy out the debt of almost the entire world by 2022 (this is pure arithmetic)!
The only sustainable competitor will be China which, with its recent energy decision, is embarking in a blended and accelerated evolution and in the same direction as Germany, but with an expected postponement of 5 to 7 years.
Almost all the solar panels in the world are produced in China by over 250 companies who are cumulating learning curves and investment capacity that are totally un-rivaled. China continues to generate energy through fossil and nuclear means, but the speed of development toward sustainable sources has no comparison.
China has investment capacities and technological knowledge but is lacking only in the modern network needed to partially distribute the new energy-producing systems. But, their plans are well designed even in this direction.
China has another advantage, the considerable number of Chinese engineers who graduate every year from their world-renowned colleges and universities. They are the ones who will conquer the world, not the graduates in literature, law or history .
As Sun Tzu said 2600 years ago, the best way to win a war is by strategy, not battle. The other great German/Austrian strategist Von Clausevitz strongly agreed – will history repeat itself?
Western politicians and economists do not capture this significance and do not deserve any trust. They are either ignorant, corrupted or both.