06/01/2011 06:53 EDT | Updated 08/01/2011 05:12 EDT

Germany Nuclear Power Substitute? Coal From Australia

THE CANADIAN PRESS -- CANBERRA, Australia - Germany signed a resource co-operation deal on Wednesday with Australia, the world's largest coal exporter, only days after committing to shut down its nuclear reactors by 2022.

German Foreign Minister Guido Westerwelle signed the deal during his first visit to Australia. But he said Germany did not plan to substitute coal and gas for nuclear power to fulfil its energy needs.

"We want to finish the use of nuclear energy. We do not want to substitute it with fossil energy, but we want to substitute it with renewable energy," Westerwelle told reporters.

Germany was a world leader in renewable energy technology such a solar cells and wind turbines and recognized that Australia has a "clear commitment for renewable energy," he said.

Australia is one of the world's worst greenhouse gas polluters per capita because of its heavy reliance on abundant reserves of cheap coal to generate electricity.

But it passed a law in 2009 requiring that 20 per cent of its electricity come from renewable sources such as the sun and wind by 2020 — up from 8 per cent at the time the law was passed.

Coal and iron ore are Australia's most lucrative exports, but natural gas, which is cleaner than coal, is a rapidly expanding industry through multibillion dollar contracts with Asia. China is also increasing its stake in Australian resource companies as its demand for natural resources burgeons.

Under the deal, German and Australia have agreed to increase co-operation in the resource and energy sectors through investment and collaboration in research and development. It does not specify the types of energy on which they will co-operate.

Foreign Minister Kevin Rudd said that Germany, as the world's fourth-largest economy, was an important partner in promoting free global markets for energy and resources as well being a major potential investor in Australia's resources sector.

Germany invested 75 million Australian dollars ($81 million) in Australian mineral exploration and development in the 2009-10 fiscal year, he said.

German Chancellor Angela Merkel's government decided Monday to shut all of Germany's 17 nuclear reactors by 2022 — reversing a decision last year to extend their life span. The move followed a crisis in Japan, when a mammoth earthquake and tsunami on March 11 disabled a nuclear power plant and caused it to leak radiation. It was weeks before the country got the leak under control.