German Nuclear Shut Down Could Mean Higher Business Electricity Prices
The German decision to move away from nuclear power may mean an increase in business electricity prices.
The German decision to begin a gradual shut down of nuclear power stations in the country could result in higher business and domestic energy bills according to Vayu, an Irish natural gas business.
Utility Exchange reported recently that the German Chancellor, Angela Merkel had announced that after the Fukushima disaster in Japan, Germany would begin to phase out nuclear power stations. She said they hoped to have completed the process by 2022 and as such would need to increase the number of sources of renewable energy in the country.
However, the managing director of natural gas trading and supply operation at Vayu, Colm Kennedy, said the German announcement had meant gas prices had increased immediately along with stocks associated with the renewable energy industry.
Mr Kennedy said “Gas prices will definitely rise as a result”.
Mr Kennedy said these price rises would also affect business electricity prices because fossil fuels such as gas and coal will have to be used to generate electricity. He said that even if Germany moved towards renewable energy it would not necessarily mean less gas would be used.
Because the wind doesn’t generate power constantly, gas fired power stations are needed as a back up to renewable energy. As a result he said “all fossil fuel prices are likely to remain volatile into the future”.
Mr Kennedy said that nuclear power tends to be cheaper than other forms of electricity generation and therefore a move away from nuclear power will mean German businesses will face higher energy costs and are likely to become less competitive.
Not only that but demand for gas will increase over the next few years as German nuclear power stations are shut. This means there’s likely to be more of a demand for gas and prices will therefore increase for everyone.
As countries move away from nuclear power and become more dependent on renewable energy and gas, it will become increasingly important to compare business electricity prices and business gas prices to ensure you get the best deals.