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Germany U-turns on nuclear in scramble to avert winter crisis

The Telegraph logo The Telegraph 16/08/2022 Rachel Millard, Tim Wallace
Germany has sparked anger among activists by reversing its anti-nuclear stance - Lennart Preiss/Getty Images © Lennart Preiss/Getty Images Germany has sparked anger among activists by reversing its anti-nuclear stance - Lennart Preiss/Getty Images

Germany plans to keep its remaining nuclear power plants open for longer in a major U-turn as it scrambles to keep the lights on this winter with less Russian gas. 

Officials have concluded the plants are needed due to gas shortages and they can be kept open without safety concerns, the Wall Street Journal reported. 

Germany pledged to phase out nuclear power after the Fukushima disaster in Japan in 2011, which hardened opposition to the technology. 

Berlin has been under pressure to change course since the invasion of Ukraine to limit the impact of the gas crisis on manufacturers and households. 

Germany has three plants left, operated by E.ON, EnBW and RWE, supplying about 6pc of the country's electricity. 

They are currently due to close at the end of the year. Any extension has yet to be officially adopted and details remain under discussion, the Wall Street Journal added.

It came as Norway warned it could not do more to help Germany avoid a gas crisis this winter as Russia restricts supplies.

Jonas Gahr Störe, Norway’s prime minister, said the country was producing at “maximum” rates, having increased production by 10pc since Russia invaded Ukraine.

“We cannot simply decide politically, we are now delivering even more,” he told Olaf Scholz, Germany’s chancellor, during a meeting in Oslo. 

It limits Germany’s options as it scrambles to find new sources of gas after Russia’s invasion of Ukraine disrupted a key source of supply. 

Europe’s largest economy is among the countries most affected as Russia restricts supplies to Europe in retaliation over sanctions. Germany bought about 50pc of its gas from Russia prior to the war.  

It is now racing to fill up gas storage sites ahead of winter. They were more than 75pc full as of last Friday, ahead of schedule, but it aims to reach 95pc by November 1 to try and avoid a gas crisis this winter.


Video: Gas Intensive Industries Feel Impact of European Energy Crisis (Bloomberg)

Germany secured a commitment on Tuesday from major gas importers to keep two floating liquefied natural gas (LNG) terminals fully supplied from this winter.

Uniper, RWE and EnBW have agreed to keep two Floating Storage and Regasification Units (FSRUs) in Brunsbuettel and Wilhelmshaven fully supplied from their expected operational start this winter until March 2024.

Norway is western Europe’s largest oil and gas supplier and also a major electricity exporter.

It exported about 5.7pc more gas this July compared to last amid rising demand from Germany and others. The value of the exports was four times higher, at almost £11bn, as gas prices soared. 

At the meeting in Oslo, Mr Scholz, Germany’s Chancellor, thanked Norway for “exhausting its gas supplies to the maximum”, according to reports in the German press. 

He added this was “very important to reduce our gas dependency on Russia”.

Economists warned yesterday that  Germany is on track for recession as the energy crisis undermines confidence. Sentiment among financiers and business leaders has dropped to its lowest since the financial crisis, according to the monthly ZEW survey.

The tracker fell to minus 55.3, below the minus 49.5 recorded at the start of the pandemic and lower than the 55.2 reached in the depths of the eurozone debt crisis of 2011. The long-term average over the index’s more than 30-year history is plus 22.1.

Respondents’ assessment of current economic conditions also dipped to minus 47.6, the lowest in more than a year as Germany struggles with the Russian energy crisis and a dire drought. 

Water levels in the Rhine have fallen below key levels this week, disrupting the flow of commercial ships that transport critical supplies for German industry.

Andrew Kenningham at Capital Economics said the survey is now “at a level consistent with the economy contracting”.

“We now think a recession is unavoidable in the second half of this year as the impact of high energy prices on both households and industry takes effect,” he said. 

“German GDP will contract for the next three quarters as the headwinds from rising energy prices and higher interest rates gather pace.”

Salomon Fiedler at Berenberg Bank said inflation “will worsen before it gets better” indicating the economy will be under growing strain.

He predicted a lengthy but shallow recession. Consumers should help to limit the economic decline, given those with the means to are still keen to spend money after the pandemic.

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