Germany’s Nuclear Phase-out: Sensitivities and Impacts on Electricity Prices and CO2Emissions

Following the nuclear meltdown in Fukushima Daiichi, in summer 2011 the German parliament decided to phase-out nuclear power by 2022. When this decision was taken, a number of model-based analyses investigated the influence this decision would have on electricity prices and CO2emissions. They conclu...

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Bibliographic Details
Published in:Economics of energy & environmental policy 2014-03, Vol.3 (1), p.89-106
Main Authors: KNOPF, BRIGITTE, PAHLE, MICHAEL, KONDZIELLA, HENDRIK, JOAS, FABIAN, EDENHOFER, OTTMAR, BRUCKNER, THOMAS
Format: Article
Language:English
Subjects:
Carbon dioxide emissions
Coal fired power plants
Electricity
Electricity prices
Emissions trading
Energy
Market prices
Modeling
Nuclear power plants
Pollutant emissions
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Summary:Following the nuclear meltdown in Fukushima Daiichi, in summer 2011 the German parliament decided to phase-out nuclear power by 2022. When this decision was taken, a number of model-based analyses investigated the influence this decision would have on electricity prices and CO2emissions. They concluded that CO2emissions would be kept at levels that are in line with national reduction targets but that the phase-out would result in an increase in wholesale electricity prices. We show by means of a sensitivity analysis that results crucially hinge on some fundamental model assumptions. These particularly include the development of fossil fuel and CO2prices, which have a much larger influence on the electricity price than the nuclear phase-out itself. Since the decision of the nuclear phase-out, CO2prices have decreased and deployment of renewables increased ever since. This partly counteracts the negative effect of the nuclear phase-out on electricity prices, but on the other hand challenges the mitigation of CO2emissions and security of supply. This underlines the importance of sensitivity analyses and suggests that policy-makers need to consider scenarios that analyze the whole range of possible future developments.
ISSN:2160-5882
2160-5890