What can be learned from the French partial nuclear shutdown of 2016?

Journal title ECONOMICS AND POLICY OF ENERGY AND THE ENVIRONMENT
Author/s Jacques Percebois, Stanislas Pommeret
Publishing Year 2021 Issue 2021/1 Language English
Pages 15 P. 5-19 File size 704 KB
DOI 10.3280/EFE2021-001001
DOI is like a bar code for intellectual property: to have more infomation click here

Below, you can see the article first page

If you want to buy this article in PDF format, you can do it, following the instructions to buy download credits

Article preview

FrancoAngeli is member of Publishers International Linking Association, Inc (PILA), a not-for-profit association which run the CrossRef service enabling links to and from online scholarly content.

The penetration of intermittent renewable energies in the electricity mixes impact the wholesale price. In the absence of electricity storing capacities at reasonable costs, the back-up of the intermittent renewable energies is ensured by fossil or nuclear power plants. In 2016 the French Nuclear Safety Authority has ordered the shutdown of a large part of nuclear units for safety reasons. This paper analyses the impact of such a decision both on the evolution of the whole-sale price of electricity and on the French commercial balance. Although the resulting mix from the partial shutdown of the nuclear power plants was able to produce the electrical energy consumed, it was unable to keep up with demand. This has resulted in a very sharp increase in the price of electricity on the spot market and in massive electricity imports at peak times. Moreover the carbon electricity footprint produced in France is much lower than the one pro-duced by its neighbors. Consequently, the nuclear partial shutdown has a negative climatic impact resulting in a deterioration of the citizen welfare. Thus, the French experience of 2016 teaches us that in the absence of electricity storage facilities, there is no point in trying to re-duce the share of nuclear and fossil fuels in the electricity mix. If the policymakers want to do so, they must ensure that massive electricity storage facilities are present and promote electrici-ty demand flexibility on a large scale. This study highlights also the divergence that can exist between the interest of the nuclear producer (higher revenues) and the collective interest (lower welfare and negative impact on the trade balance).

Keywords: electricity market, electricity demand flexibility, nuclear shutdown, electricity regu-lation, renewable energies.

Jel codes: Q41, Q43, E65, Q28

  1. ASN (2019). Arrêt de réacteurs de centrales nucléaires [WWW Document]. -- https://www. asn.fr/Controler/Actualites-du-controle/Arret-de-reacteurs-de-centrales nucleaires.
  2. ASN (2016). RAPPORT DE L’ASN sur l’état de la sûreté nucléaire et de la radioprotection en France en 2016, Annual Report -- https://www.asn.fr/annual_report. Paris.
  3. Benhmad, F., Percebois, J. (2016). Wind power feed-in impact on electricity prices in Germany 2009-2013. Eur. J. Comp. Econ., 13: 81-96.
  4. Blazquez, J., Fuentes-Bracamontes, R., Bollino, C.A., Nezamuddin, N. (2018a). The renewable energy policy. Paradox. Renew. Sustain. Energy Rev., 82: 1-5.
  5. Blazquez, J., Nezamuddin, N., Zamrik, T. (2018b). Economic policy instruments and market uncertainty: Exploring the impact on renewables adoption. Renew. Sustain. Energy Rev., 94: 224-233.
  6. Bode, S., Groscurth, H. (2006). The Effect of the German Renewable Energe Act (EEG) on “the Electricity Price” (No. 358), HWWA Discussion Paper.
  7. Glomsrød, S., Wei, T., Mideksa, T., Samset, B.H. (2015). Energy market impacts of nuclear power phase-out policies. Mitig. Adapt. Strateg. Glob. Chang., 20: 1511-1527.
  8. Gross, R., Blyth, W., Heptonstall, P. (2010). Risks, revenues and investment in electricity generation: Why policy needs to look beyond costs. Energy Econ., 32: 796-804.
  9. IEA (2020). Sustainable recovery, World Energy Outlook Special Report in collaboration with the International Monetary Fund.
  10. Ketterer, J.C. (2014). The impact of wind power generation on the electricity price in Germany. Energy Econ., 44: 270-280. DOI: 10.1016/J.ENECO.2014.04.003
  11. Knopf, B., Pahle, M., Kondziella, H., Joas, F., Edenhofer, O. (2014). Germany’s nuclear phase-out : Impacts on electricity prices , CO 2 emissions and on Europe 1 Introduction. Econ. Energy Environ. Policy, 3: 89-105.
  12. López Prol, J., Steininger, K.W., Zilberman, D. (2020). The cannibalization effect of wind and solar in the California wholesale electricity market. Energy Econ., 85: 104552.
  13. Moreno, B., López, A.J., García-álvarez, M.T. (2012). The electricity prices in the European Union. The role of renewable energies and regulatory electric market reforms Energy, 48: 307-313.
  14. Morilhat, P., Feutry, S., Le Maitre, C., Favennec, J.M. (2019). Nuclear Power Plant Flexibility at EDF. VGB PowerTech, 5: 32-41.
  15. Oosthuizen, A., Inglesi-Lotz, R., Thopil, G. (2019). The relationship between renewable energy and retail electricity prices: Panel evidence from OECD countries (No. 797), ERSA working paper 797.
  16. Percebois, J., Pommeret, S. (2021). Efficiency and dependence in the European electricity transition. Energy Policy, 154: 112300.
  17. Percebois, J., Pommeret, S. (2019). Storage cost induced by a large substitution of nuclear by intermittent renewable energies: the French case. Energy Policy, 135: 111067.
  18. Percebois, J., Pommeret, S. (2018). Cross-subsidies Tied to the Introduction of Intermittent Renewable Electricity : An Analysis Based on a Model of the French Day-Ahead Market. Energy J., 39: 245-268.
  19. Phan, S., Roques, F. (2015). Is the depressive effect of renewables on power prices contagious? A cross border econometric analysis, CEEM Working Paper 2015-16. -- http://www.ceem-dauphine.org/assets/wp/pdf/CEEM_Working_Paper_16_Sebastien_Phan -Fabien_Roques2.pdf.
  20. R Core Team (2018). R: A language and environment for statistical computing. R Foundation for Statistical Computing. Vienna, Austria.
  21. Rivard, B., Yatchew, A. (2016). Integration of renewables into the Ontario electricity system. Energy J., 37: 221-242.
  22. Sensfuß, F., Ragwitz, M., Genoese, M. (2008). The merit-order effect: A detailed analysis of the price effect of renewable electricity generation on spot market prices in Germany. Energy Policy, 36.
  23. Traber, T., Kemfert, C. (2009). Impacts of the german support for renewable energy on electricity prices, emissions, and firms. Energy J.
  24. UFC-QUE CHOISIR, 2018. MARCHÉ DE L’ÉLECTRICITÉ : Les consommateurs pâtissent de la concurrence (No. avril), UFC-QUE CHOISIR • Service des études • -- http://www.quechoisir.org. Paris.
  25. Wickham, H. (2011). ggplot2. Wiley Interdiscip. Rev. Comput. Stat., 3: 180-185.
  26. Wozabal, D., Graf, C., Hirschmann, D. (2016). The effect of intermittent renewables on the electricity price variance. OR Spectr., 38: 687-709.

  • Reform of the European electricity market: Should we prefer a price based on a weighted average of marginal costs with cross-subsidies? Jacques Percebois, Stanislas Pommeret, in The Electricity Journal 107364/2024 pp.107364
    DOI: 10.1016/j.tej.2023.107364
  • Les nouveaux défis de la politique énergétique française Jacques Percebois, Stanislas Pommeret, in Reflets de la physique /2024 pp.30
    DOI: 10.1051/refdp/202477030

Jacques Percebois, Stanislas Pommeret, What can be learned from the French partial nuclear shutdown of 2016? in "ECONOMICS AND POLICY OF ENERGY AND THE ENVIRONMENT" 1/2021, pp 5-19, DOI: 10.3280/EFE2021-001001