German Nuclear Policy Reconsidered: Implications for the Electricity Market

Michaela Fursch, Dietmar Lindenberger, Raimund Malischek, Stephan Nagl (), Timo Panke and Johannes Truby
Authors registered in the RePEc Author Service: Johannes Trueby

Economics of Energy & Environmental Policy, 2012, vol. Volume 1, issue Number 3

Abstract: In the aftermath of the nuclear catastrophe in Fukushima-Daiichi, German nuclear policy has been reconsidered. This paper demonstrates the economic effects of an accelerated nuclear phase-out in Germany on the European electricity market. An optimization model is used to analyze two scenarios with different lifetimes for nuclear plants in Germany (phase-out vs. prolongation). Based on political targets, both scenarios assume significant electricity demand reductions and a high share of renewable energy sources in Germany. We find that electricity costs and prices in the European system are higher in the phase-out scenario, especially in Germany, associated with welfare losses. Due to lifetime extensions of existing fossil-fired plants as well as moderate capacity additions, we conclude that the generation sector can generally cope with the phase-out under the given assumptions. Yet, we emphasize that this requires a substantial and costly transformation of the supply and the demand side.

JEL-codes: F0 (search for similar items in EconPapers)
Date: 2012
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Citations: View citations in EconPapers (15)

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Working Paper: German Nuclear Policy Reconsidered: Implications for the Electricity Market (2011)
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