Estimating the cost of Germany’s nuclear phaseout

About

Despite having a negligible climate impact compared to fossil fuels, many countries have substantially decreased the share of their electricity production from nuclear sources. This is due in large part to concerns about long-term solutions for storing nuclear waste and public fears of catastrophic nuclear accidents. These fears intensified considerably following the incidents at Three Mile Island in 1979, Chernobyl in 1986, and Fukushima in 2011. The decision to phase-out nuclear production in many countries seems to suggest that the expected costs of nuclear power exceed the benefits. Yet, there remains considerable uncertainty about some of these costs and benefits as there is a glaring lack of empirical studies quantifying the full range of economic and environmental impacts from large-scale nuclear sector closures.

To address this gap, we documented the impact of the phase-out of nuclear power in Germany on multiple market and environmental outcomes, with a focus on the shutdown of ten nuclear reactors in Germany that occurred between 2011 and 2017 following the Fukushima accident in Japan.

Approach

We estimated the economic and environmental costs of the nuclear phase-out in Germany using rich plant-level data and ambient pollution monitor data from the initial nuclear reactor closures in 2011 through the subsequent incremental shutdowns up until the end of 2017. Using these data, we observed that production from nuclear sources declined steeply after March 2011. This lost nuclear production was replaced by electricity production from coal- and gas-fired sources in Germany as well as electricity imports from surrounding countries. 

We then estimated the impact of the nuclear phase-out on market outcomes using a novel machine learning algorithm we developed for this study. The algorithm predicts the quantity of electricity produced by each power plant in Germany in each hour-of-sample under two scenarios: one with the nuclear phase-out and one without it. We then used our predicted changes in plant-level electricity production due to the nuclear shutdowns to calculate the costs of the shift away from nuclear power.

Key Findings

We estimate that the annual cost of the phase-out to German producers and consumers is $12 billion, 70% of which is from increased mortality risk from stronger air pollution from burning of fossil fuels. This is substantially greater than even the most generous estimates of the costs of nuclear accident risk and waste disposal. The phase-out resulted in more than 1,100 additional deaths per year from increased concentrations of SO₂, NOx, and particulate matter, with the increase in production from hard coal plants making up roughly 80% of the increase in mortality impacts.

Partners

This study was a collaboration with Dr. Steven Jarvis at the University of California at Berkeley and Dr. Akshaya Jha at Carnegie Mellon University.