LITTLETON, Colorado (Reuters) - Germany's power producers are preparing for their first winter without nuclear power after the country closed its last remaining reactors in early 2023 amid ongoing efforts to modernize its energy system.
German officials opted to shut the country's last remaining reactors in April, as although they generated steady volumes of power with little to no emissions, authorities preferred to expand supplies of renewable energy rather than make additional investments in the nuclear fleet.
Nuclear power has gradually lost its share in Germany's electricity generation mix for years, with its contribution to the country's electricity total falling from over 14% in 2015 to around 6% in 2022 and virtually zero for 2023 as a whole.
On an annual basis, the roughly 8.1 gigawatts (GW) of nuclear capacity closed this year has been more than offset by increases in generation capacity from solar and wind sites, data from think tank Ember shows.
However, with generation from solar - Germany's second largest source of clean electricity behind wind - set to plunge this winter due to reduced daylight, Germany's total clean power generation looks set to decline just as energy consumption levels rise from higher demand for heating.
As a result, German power producers may be forced to boost generation from fossil fuels such as coal and natural gas, lifting power sector emissions in the process.
CLEAN & FOSSIL OUTPUT DOWN
Over the first nine months of 2023, German output of clean and fossil-powered electricity dropped from the same period in 2022, mainly due to stunted power demand from industry.
Clean electricity generation declined by 5.6% from the same period in 2022, while fossil fuel generation dropped by 21% to the lowest cumulative total for that period since at least 2017.
Persistently high wholesale power prices have been a key constraint on generation totals, as the German industry has balked at paying wholesale rates that remain 160% above the 2019 average despite having dropped over 80% from the 2022 peak, LSEG data shows.
The impact of that reduced industrial energy consumption is evident from output data from key energy-intensive sectors.
German output of chemicals and fertilizers - previously manufactured using abundant and cheap natural gas - have slumped to their lowest totals in over a decade in 2023 as producers throttled back production, data compiled by LSEG shows.
Production of cars, steel, batteries, and turbines has also been pared back, resulting in an expected rare contraction in Europe's largest economy this year.
To try to support an industrial recovery, power firms are under pressure to drive power costs lower, and have taken steps to boost the production of cheap renewable energy to record levels this year.
However, total German solar electricity generation historically declined by over 80% from September to December, due to sharply reduced daylight hours.
As solar power accounted for over 20% of Germany's total electricity generation in each of the past five months, such a severe decline in clean power output is likely to tighten overall power supplies just as German households and businesses dial-up demand for heat during the coldest months of the year.
To offset the lower solar output, utilities will look to maximise wind power generation, which picks up during the winter months due to higher wind speeds.
But to complement the intermittent nature of wind power, and ensure that overall electricity generation totals trend higher along with demand, power firms will likely also boost generation from coal and gas plants that can be throttled up and down at short notice to balance national power market needs.
Higher fossil fuel generation in turn will produce increased power emissions which may undermine Germany's efforts to cut pollution totals, but may be unavoidable given the absence of non-emitting clean power from the country's nuclear reactors.