The impact of the German response to the Fukushima earthquake

• Published in: Energy economics Vol. 66; pp. 450 - 465
• Main Authors: Grossi, Luigi, Heim, Sven, Waterson, Michael
• Format: Journal Article
• Language: English
• Published: Kidlington Elsevier B.V 01.08.2017; Elsevier Science Ltd
• Subjects: Earthquakes; Electric power plants; Electricity generation; Electricity markets; Energy economics; Energy transition; Impact analysis; Nuclear electric power generation; Nuclear energy; Nuclear fuels; Nuclear phase-out; Nuclear power plants; Policy making; Power; Power structure; Prices; Production; Quasi-experimental methods; Renewables; Seismic activity; Studies; Supply & demand; Fukushima Japan; Japan; Germany; Q54; Q48; Electricity markets; Energy transition; L94; L51; Nuclear phase-out; Renewables; Q41
• ISSN: 0140-9883; 1873-6181
• DOI: 10.1016/j.eneco.2017.07.010

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. •Study of major natural experiment on electricity market•Complete change in German energy policy implications•Results not in line with what many people expected•Significant impact on prices and market, both in Germany and Austria•Implications for elsewhere