Is the world already too dependent on nuclear power?
Germany's decision to shut down nuclear power generation years early, following the earthquake and nuclear disaster in Japan this March, will result in up to 11,000 job losses at E.ON, the country's largest energy company.
This was confirmed last week as E.ON posted a net loss of €1.49 billion for the quarter ending in June, compared with a profit of €1.63 billion for the same period last year. Company officials blamed the loss on the government's decision to bump up Germany's nuclear free date from 2036 to 2022, as well as on a new tax on nuclear fuel introduced last year.
In order to cut costs over the next years, CEO Johannes Teyssen said the the company's board needed to make deep job cuts, primarily in administrative areas, according to a report in DW-World.de.
"We cannot afford any unnecessary management levels, processes, and duplication of work," Teyssen said when presenting E.ON's half-year results in Dusseldorf.
The company is now projecting profit for the year in the order of €2.1-2.6 billion, a reduction of 30-40% on earlier estimates.
Meanwhile the nuclear shutdown is continuing to reverberate around the Germanan economy. Bayer, for example, employer of 35,000 in Germany, has threatened that they may have to pull out of Germany if energy prices are not competitive. As it is, Bayer is in the midst of a 4,500 worldwide layoffs, while planning to add 2,500 employees in Russia, China, Brazil or India.
In abandoning nuclear, Germany will have to replace the 23% share of the country's energy it produces. The share of renewables is expected to rise from an already high (in proportion to many countries) 17% to an estimated 35%.
The situation is also impacting other countries. A Swedish energy company blamed huge losses on the German decision. E.ON announced a 15% price hike to its 5 million U.K. residential customers and France, which is highly dependent on nuclear, is now faced with the sudden unrelated difficulty of extremely low water levels in rivers that are used to cool their reactors. At one point in June, Switzerland had requested that France shut down one of their reactors.
While just scratching the surface of recent developments, it is evident that, as countries struggle to readjust their power models in the wake of the Japan earthquake, there is another danger of nuclear power that has been overlooked.
That is that nuclear power is extremely addictive for world economies.