• Michael Tozzi

The Road to Germany's Energy Crisis

After a summer of once-unthinkable wildfires and pipeline disruptions, European governments have been forced to confront their nations’ reliance on fossil fuels. The stranglehold Russian gas exports hold over Europe’s energy sector has been brought into sharp relief amid supply cut-offs in response to international sanctions over Russia’s invasion of Ukraine. Meanwhile, the insidious menace of climate change has had its effects felt more acutely this summer than in previous years. While the entire continent has been affected by this gas-reliance conundrum, one nation, in particular, has spent the last decade pursuing policies that have proven spectacularly self-defeating in terms of both geopolitics and environmentalism.


Germany’s continued imports of gas from the Russian Federation in the years since the latter’s annexation of Crimea in 2014 have occurred in tandem with a retrospectively unnecessary phase-out of nuclear energy. Olaf Scholz’s government has a steep battle ahead of it to manage the current energy crisis, already anticipated to result in blackouts this winter. While commentators have noted that retaining Germany’s nuclear power plants would not have eliminated the energy crisis, this article will argue that Germany’s energy policy decisions throughout the last two decades have worsened the situation. The predicament Germany faces this winter should stand as a warning to all policy-makers to not risk exacerbating climate change and petro-totalitarianism by dismissing the potential of nuclear energy to contribute to clean energy independence.


The Current Situation


In the weeks following Russia’s invasion of Ukraine, NATO-aligned countries enacted a series of sanctions on the Russian Federation. These sanctions have slowly depleted Russia’s industry and financial sector. However, several Central European countries are still reliant on Russian gas for their energy needs, most notably Germany which is facing low gas reserves this winter and a potential recession following months of reduced energy imports from Russia as part of a policy of intimidation by Vladimir Putin’s regime.


In late July, Gazprom - the Russian state-owned energy company - announced plans to halve the current level of gas delivered to the European Union via the Nord Stream 1 pipeline, following an abrupt ten-day pause on gas deliveries. The officials responsible for the pauses and slowdowns cited maintenance as the reason for not meeting Europe's oil extraction needs but many within the EU bureaucracy and its member states’ governments understand these actions to be politically motivated. Already, gas procurement is 450 percent more expensive than it was twelve months ago. Prices rose sharply before Russia’s indefinite closure of Nord Stream 1 last month, and leaders across the EU are currently struggling to impose price caps in the wake of this supply shock. While the entire world is bracing for the impact of these disruptions, Germany will potentially feel the effects of this crisis more acutely than any developed European economy. Already, German legislators are limiting the amount of heating in public buildings to cut down on energy consumption ahead of what is projected to be an austere winter.


Pipelinepolitik in the Cold War


To understand why Germany is reliant upon Russian gas, it is vital to understand the roots of contemporary German energy policy. The “pipelinepolitik” policies of the 1960s first connected Germany to the Soviet Union’s energy infrastructure in the hopes that business across the Iron Curtain would drive a thawing of Cold War tensions. In early 1970, a deal was finalised allowing for the construction of the first pipeline from Siberia to West Germany. At the time, the West German government rebuffed NATO concerns about this policy of rapprochement turning into reliance by informally agreeing that Russian oil would never account for more than 10 percent of West Germany’s gas imports.


In the years following the collapse of the USSR, these ties strengthened further and in 2021, 34 percent of Germany’s gas came from Russia, per a Reuters report one month after the invasion of Ukraine. The Wall Street Journal observes that


“A German doctrine known as Wandel durch Handel, or change through trade, was a bet that boosting commercial ties would lead to friendly relations and keep in check the Kremlin’s ambitions''.


This was despite Russia’s foreign policy of hostile hegemony in Eastern Europe since its 2008 invasion of Georgia. Even Russia’s 2014 annexation of Crimea did not prompt a re-evaluation of trade ties but rather led to a series of perplexing policy decisions which compounded German reliance on Putin’s regime for its energy needs. German politicians relentlessly pursued the Nord Stream 2 pipeline until the eve of the invasion of Ukraine, after years of policies which eroded Germany’s domestic energy capabilities.


German Denuclearisation Policies


In 2000, nuclear power generated 29.5 percent of Germany’s electricity. In 2020, that had shrunk to 11.4 percent and, until this year’s energy crisis, the country had planned to phase out nuclear reactors by the end of this December. The history of German denuclearisation can be traced back to activist protests, fuelled by fears about the Chernobyl incident, from the 1970s to the 1990s. This activism prompted an agreement between the Social Democrats and Green Party to reduce Germany’s nuclear energy in the late 1990s. In 2002, an amendment to the Atomgesetz (Atomic Energy Act) was passed which set a schedule for phasing out Germany’s nuclear energy by 2022.


While then-opposition chairwoman Angela Merkel initially opposed this plan, the 2011 Fukushima incident in Japan prompted her to change her position; her government subsequently accelerated the phaseout of nuclear plants in Germany. While it has been proposed that Germany retain its last three nuclear reactors, the plan has not been approved by Chancellor Scholz’s cabinet nor voted upon by the German Parliament. In any event, such a decision would only somewhat mitigate the crisis, as the government will still pursue a number of policies to cut energy consumption this winter. The time to build new nuclear reactors was decades ago, not now, due to the significant capital costs and lengthy planning process associated with nuclear energy. Unfortunately, Germany’s decision to eliminate nuclear energy has weakened it, both geopolitically, as it now stands enthralled by Putin’s whims, and environmentally. Germany is currently reopening coal power plants despite pledging to make renewables 80 percent of its electrical grid by the end of the decade.


Germany has options but not as many as they might have enjoyed had they made different energy policy decisions in the last two decades. In the short term, Olaf Sholz’s administration is seeking to increase oil reserves in the event of further gas shutoffs and to decrease Germany’s overall energy consumption. Meanwhile, the German government has looked to alternative oil exporters, ranging from Azerbaijan and Norway to Qatar, in order to help replenish their depleted oil influx. The country is hoping new technology can alleviate the pressure; the recent introduction of hydrogen-powered trains in Germany marks a new era of energy innovation.


There are no easy answers to the issues of climate change and energy independence. However, it is clear that nuclear scepticism from environmentalist political figures has been doubly self-defeating for German interests in both areas. Energy policy must be driven by pragmatic assessments of how to reduce both carbon emissions and reliance on autocratic petrostates. It is now up to politicians worldwide to re-appraise the role of nuclear technology (especially emerging technologies such as small modular reactors) to help their nations advance their environmental and security agendas.