Scandinavian Working Papers in Economics

SSE/EFI Working Paper Series in Economics and Finance,
Stockholm School of Economics

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

Bo Andersson and Erik Hadén
Additional contact information
Bo Andersson: Department of Economics, Postal: Stockholm School of Economics, Box 6501, S-113 83 Stockholm, Sweden.
Erik Hadén: Department of Economics, Postal: Stockholm School of Economics, Box 6501, S-113 83 Stockholm, Sweden.

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

JEL-codes: L79; Q38; Q48

33 pages, March 1996

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