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Germany's Nuclear Phase-out: Sensitivities and Impacts on Electricity Prices and CO2 Emissions

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  • Brigitte Knopf
  • Michael Pahle
  • Hendrik Kondziella
  • Fabian Joas
  • Ottmar Edenhofer
  • Thomas Bruckner
Abstract
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 CO2 emissions. They concluded that CO2 emissions 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 CO2 prices, which have a much larger influence on the electricity price than the nuclear phase-out itself. Since the decision of the nuclear phase-out, CO2 prices 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 CO2 emissions 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.

Suggested Citation

  • Brigitte Knopf & Michael Pahle & Hendrik Kondziella & Fabian Joas & Ottmar Edenhofer & Thomas Bruckner, 2014. "Germany's Nuclear Phase-out: Sensitivities and Impacts on Electricity Prices and CO2 Emissions," Economics of Energy & Environmental Policy, International Association for Energy Economics, vol. 0(Number 1).
    • Handle: RePEc:aen:eeepjl:3-1-a06
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    Cited by:

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    2. Ruhnau, O. & Bucksteeg, M. & Ritter, D. & Schmitz, R. & Böttger, D. & Koch, M. & Pöstges, A. & Wiedmann, M. & Hirth, L., 2022. "Why electricity market models yield different results: Carbon pricing in a model-comparison experiment," Renewable and Sustainable Energy Reviews, Elsevier, vol. 153(C).
    3. Grossi, Luigi & Heim, Sven & Waterson, Michael, 2014. "A vision of the European energy future? The impact of the German response to the Fukushima earthquake," ZEW Discussion Papers 14-051, ZEW - Leibniz Centre for European Economic Research.
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    6. McCauley, Darren & Brown, Antje & Rehner, Robert & Heffron, Raphael & van de Graaff, Shashi, 2018. "Energy justice and policy change: An historical political analysis of the German nuclear phase-out," Applied Energy, Elsevier, vol. 228(C), pages 317-323.
    7. Huppmann, Daniel & Egging, Ruud, 2014. "Market power, fuel substitution and infrastructure – A large-scale equilibrium model of global energy markets," Energy, Elsevier, vol. 75(C), pages 483-500.
    8. Grossi, Luigi & Heim, Sven & Waterson, Michael, 2017. "The impact of the German response to the Fukushima earthquake," Energy Economics, Elsevier, vol. 66(C), pages 450-465.
    9. Kristina Govorukha & Philip Mayer & Dirk Rübbelke, 2021. "Fragmented Landscape of European Policies in the Energy Sector: First-Mover Advantages," CESifo Working Paper Series 9093, CESifo.
    10. Marques, António Cardoso & Junqueira, Thibaut Manuel, 2022. "European energy transition: Decomposing the performance of nuclear power," Energy, Elsevier, vol. 245(C).
    11. Lerch, Philipp & Scheller, Fabian & Reichelt, David G. & Menzel, Katharina & Bruckner, Thomas, 2024. "Electricity cost and CO2 savings potential for chlor-alkali electrolysis plants: Benefits of electricity price dependent demand response," Applied Energy, Elsevier, vol. 355(C).
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    13. Chuang, Ming-Tung & Chang, Shih-Yu & Hsiao, Ta-Chih & Lu, Yun-Ru & Yang, Tsung-Yeh, 2019. "Analyzing major renewable energy sources and power stability in Taiwan by 2030," Energy Policy, Elsevier, vol. 125(C), pages 293-306.
    14. Froese, Anna & Mevissen, Natalie, 2020. "Failure through Success: Co-construction Processes of Imaginaries (of Participation) and Group Development," EconStor Open Access Articles and Book Chapters, ZBW - Leibniz Information Centre for Economics, vol. 45(3), pages 455-487.
    15. Friedrich Kunz and Hannes Weigt, 2014. "Germanys Nuclear Phase Out - A Survey of the Impact since 2011 and Outlook to 2023," Economics of Energy & Environmental Policy, International Association for Energy Economics, vol. 0(Number 2).

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