Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/121492
Authors: 
Grossi, Luigi
Heim, Sven
Hüschelrath, Kai
Waterson, Michael
Year of Publication: 
2015
Series/Report no.: 
ZEW Discussion Papers 15-072
Abstract: 
The harmonization and integration of separate national energy markets to an interconnected internal European market is a top priority of the European Commission. However, as energy policy largely remains subject to national sovereignty, a higher degree of integration can cause unilateral national policies to harm interconnected markets. We investigate the impact of two distinct national reforms in Germany - the phase-out of nuclear power plants after the Fukushima incident and the expansion of renewables promoted by fixed feed-in tariffs and unlimited priority feed-in - on neighbouring countries. We find that the phase-out triggered price increases of up to 19 percent in neighbouring countries whilst the renewable energy support schemes caused a price decrease of up to 0.17 percent for each percent of additional generation from German renewables. We also apply a novel approach to estimate the degree of market integration and find large differences between neighbouring countries in a range from 14 percent to 99 percent. Our findings point up the need for increased efforts to harmonize national energy policies, but also the need to consider the impact of unilateral environmental measures on other countries' supplies in the context of a partially integrated and partly unilateral system.
Subjects: 
Energy
Electricity
Market Integration
Nuclear Phase-Out
Renewables
JEL: 
L51
L94
Q41
Q48
Q54
Document Type: 
Working Paper

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