Germany's exit from nuclear power could cost the country as much as 1.7 trillion euros ($2.15 trillion) by 2030, or two thirds of the country's GDP in 2011, according to Siemens
This will either be paid by energy customers or taxpayers, Siemens board member Michael Suess, in charge of the company's Energy Sector, told Reuters in an interview at the annual Handelsblatt Energiewirtschaft conference.
The estimate of 1.7 trillion euros assumes strong expansion of renewables, with feed-in tariffs as the biggest chunk of costs. The cost would be lower -- at about 1.4 billion euros -- if gas was one of the major energy alternatives, Suess said.
The estimates given by Siemens factor in feed-in tariffs -- costs that utilities have to pay to generators of renewable energy -- investments into power transmission and distribution, operations and maintenance as well as technologies to store renewable energy and carbon dioxide.
As an industry, Germany has always reached its goals. Now the whole world is looking at us. If the energy shift should fail ... it would undermine Germany's credibility as an industry nation, Suess said.
Europe's biggest economy decided to abandon nuclear power after the massive earthquake and tsunami of March 11 which hit Japanese reactors, causing an environmental disaster.
Following the disaster, Siemens pulled out of the nuclear business, planning only to supply components such as steam turbines for nuclear power plants.
Siemens' estimate for the shift away from nuclear is much higher than the 250-300 billion euros estimate given earlier by Juergen Grossmann, chief executive of Germany's No.2 utility RWE
Siemens' Energy Sector -- which is active in several areas including power transmission, solar, wind and hydro power -- achieved 27.61 billion euros in sales in the fiscal year 2011, about 38 percent of the conglomerate's revenues, while profit came in at 4.14 billion.
Last year, Siemens said it aimed to benefit from the global push into renewable energy by installing power lines to get electricity from sun-drenched and wind-swept sites to customers.
At the time, it said the global market for power transmission of high-voltage direct current could triple in the next few years to 9 billion euros.
Suess added Germany's current renewable law (EEG) was insufficient in expanding renewable energy sources -- above all, solar -- in a sustainable way, adding the incentives were unfavorable.
In Germany, generators of solar power receive a guaranteed price for their power for several decades, with no incentive to upgrade or modify their systems.
We think that the energy system must not be a pawn of investors that aim to maximize their returns. The shift will not work with those incentives, Suess said.
One option would be to tie incentives to innovation, whereby owners of solar panels were forced to modernize their systems. Such incentives do not exist at the moment. ($1=0.7891 euros)
(Additional reporting by Sarah Marsh and Sakari Suoninen; Editing by Mike Nesbit and Elaine Hardcastle)