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The impact of the German response to the Fukushima earthquake

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  • Grossi, Luigi
  • Heim, Sven
  • Waterson, Michael

Abstract

The German response to the Fukushima nuclear power plant incident was possibly the most significant change of policy towards nuclear power outside Japan, leading to a sudden and very substantial shift in the underlying power generation structure in Germany, an enthusiastic leading proponent of renewable power. This provides a very useful experiment on the impact of a supply shock in the context of increasing relative generation by renewable compared to conventional fuel inputs into power production. Our quasi-experimental exploration of a modified demand-supply framework finds that despite the swift, unpredicted change in nuclear power, the main impact was a significant average increase in prices, surprisingly particularly at low residual load levels.

Suggested Citation

  • 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.
    • Handle: RePEc:eee:eneeco:v:66:y:2017:i:c:p:450-465
    DOI: 10.1016/j.eneco.2017.07.010
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    Cited by:

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    2. Gugler, Klaus & Haxhimusa, Adhurim & Liebensteiner, Mario, 2021. "Effectiveness of climate policies: Carbon pricing vs. subsidizing renewables," Journal of Environmental Economics and Management, Elsevier, vol. 106(C).
    3. Shi Chen & Wolfgang Karl Hardle & Brenda L'opez Cabrera, 2020. "Regularization Approach for Network Modeling of German Power Derivative Market," Papers 2009.09739, arXiv.org.
    4. Florian Follert & Werner Gleißner & Dominik Möst, 2021. "What Can Politics Learn from Management Decisions? A Case Study of Germany’s Exit from Nuclear Energy after Fukushima," Energies, MDPI, vol. 14(13), pages 1-15, June.
    5. Liebensteiner, Mario & Wrienz, Matthias, 2020. "Do Intermittent Renewables Threaten the Electricity Supply Security?," Energy Economics, Elsevier, vol. 87(C).
    6. Klaus Gugler & Adhurim Haxhimusa & Mario Liebensteiner, 2019. "Effective Climate Policy Doesn’t Have to be Expensive," Department of Economics Working Papers wuwp293, Vienna University of Economics and Business, Department of Economics.
    7. Jeong, Minsoo & You, Jung S., 2022. "Estimating the economic costs of nuclear power plant outages in a regulated market using a latent factor model," Renewable and Sustainable Energy Reviews, Elsevier, vol. 166(C).
    8. Rinne, Sonja, 2018. "Radioinactive: Are nuclear power plant outages in France contagious to the German electricity price?," CIW Discussion Papers 3/2018, University of Münster, Center for Interdisciplinary Economics (CIW).
    9. Manuela G. Hartwig & Leslie Tkach-Kawasaki, 2020. "Correction to: Identifying the ‘Fukushima Effect’ in Germany through policy actors’ responses: evidence from the G-GEPON 2 survey," Quality & Quantity: International Journal of Methodology, Springer, vol. 54(1), pages 213-234, February.
    10. Philip Beran & Christian Pape & Christoph Weber, 2018. "Modelling German electricity wholesale spot prices with a parsimonious fundamental model – Validation and application," EWL Working Papers 1801, University of Duisburg-Essen, Chair for Management Science and Energy Economics, revised Mar 2018.
    11. Manuela G. Hartwig & Leslie Tkach-Kawasaki, 2019. "Identifying the ‘Fukushima Effect’ in Germany through policy actors’ responses: evidence from the G-GEPON 2 survey," Quality & Quantity: International Journal of Methodology, Springer, vol. 53(4), pages 2081-2101, July.
    12. Li, Jing & Renuart, Bryanna, 2023. "Environmental Impact of 2011 Germany's Nuclear Shutdown: A Synthetic Control Study," 2023 Annual Meeting, July 23-25, Washington D.C. 335434, Agricultural and Applied Economics Association.

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    More about this item

    Keywords

    Electricity markets; Energy transition; Nuclear phase-out; Renewables;
    All these keywords.

    JEL classification:

    • L51 - Industrial Organization - - Regulation and Industrial Policy - - - Economics of Regulation
    • L94 - Industrial Organization - - Industry Studies: Transportation and Utilities - - - Electric Utilities
    • Q41 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Energy - - - Demand and Supply; Prices
    • Q48 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Energy - - - Government Policy
    • Q54 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Climate; Natural Disasters and their Management; Global Warming

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