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The Economic Research Institute, Stockholm School of Economics SSE/EFI Working Paper Series in Economics and Finance

No 105:
Power production and the price of electricity: An analysis of a phaseout of Swedish nuclear power

Bo Andersson and Erik Hadén

Abstract: In this paper the effects of a phaseout of Swedish nuclear power combined with different CO2 emission goals, are studied. The vital relationship between the national electricity market and the regional markets for heating is modeled in detail in a dynamic partial equilibrium environment. It is shown that phasing out nuclear power while restricting future CO2 emissions to the 1990 level implies a significant increase in electricity prices and a substantial loss in welfare.

Keywords: Electricity; nuclear phaseout; dynamic partial equilibrium; CO2 emissions; firm objectives; (follow links to similar papers)

JEL-Codes: L79; Q38; Q48; (follow links to similar papers)

33 pages, March 1996

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