Silver may benefit from Germany’s phase-out of nuclear plants

News Tuesday that Germany may phase out its nuclear power plants and increase the amount of power it receives from renewable sources could support silver prices, says HSBC. Following the problems at the Fukushima Daiichi nuclear power plant in Japan caused by the March earthquake and tsunami, German Chancellor Angela Merkel said the country will shutter its 17 nuclear power plants by 2022.

She also committed the country to doubling the amount of electricity from renewable sources to 35% this decade. “One of the many beneficiaries may be solar panels. Silver use in photovoltaic cells for solar power is among the fastest growing components of industrial silver demand.

Solar power is an expensive way to generate electricity, however, and the industry remains dependent on government subsidies. This notwithstanding the German decision is likely to create more demand for silver for solar panels than would otherwise be the case and enhances silver’s status among investors as an environmentally friendly metal. These developments however may not materially impact physical demand this year,” says HSBC.

June 1, 2011, CommodityOnline.com