ZEW Survey Among Energy Experts – Abandoning Nuclear Energy is Possible but Electricity Prices Will Rise

In Germany the exit from nuclear energy within ten years is possible. Due to the exit period chosen, there is no reason to fear power supply instabilities. However, the change in energy policy connected with the exit from nuclear energy is not possible without price increases in electricity. In the coming years, the crucial factors for the price development of electricity will presumably be the further development of renewable energy sources, the expansion of the power supply system, the exit from nuclear energy and the development of the gas prices. These are the findings of the current ZEW Energy Market Barometer, a survey conducted semi-annually by the Centre for European Economic Research (ZEW) in Mannheim among around 200 energy experts.

When asked to generally assess the expected development of electricity prices until 2022, seventy per cent of the energy experts surveyed responded that they expect a rise in electricity prices, which will be significantly above the general rate of inflation. Nearly thirty per cent of the experts think that the price increase will be roughly equal to the general rate of inflation. The crucial factors for the price development during the next ten years are mainly expected to be the further development of renewable energy sources (96 percent of survey participants), the expansion of the power supply system (83 per cent), the exit from nuclear energy (83 per cent) and the development of the gas prices (80 per cent). All these factors play a decisive role in the energy concept of the German government. Consequently, the change in energy sources will not be free of charge. “It is therefore inevitable to pay particular attention to cost transparency and cost efficiency when reconstructing the energy sector, in order not to lose the public support to the change in energy policy,” says Prof. Dr. Andreas Löschel, head of the department Environmental and Resource Economics, Environmental Management at ZEW.

In order to avoid power supply instabilities and to guarantee a secure electricity supply even during peak hours, it has to be ensured that there is enough power generation capacity to meet the demand for electricity. A majority of 73 per cent of the energy experts surveyed are convinced that a stable power supply is possible even when phasing out nuclear power plants by 2022. By contrast, 23 per cent of the survey participants are of the opinion that a time frame of fifteen years is required for an exit from nuclear energy which would not endanger power supply stability.

For further information please contact

Prof. Dr. Andreas Löschel, Phone +49 621/1235-200, E-mail loeschel@zew.de

The ZEW Energiemarktbarometer (Energy Market Barometer)

The ZEW Energiemarktbarometer (Energy Market Barometer) is an industry-specific indicator of economic sentiment based on a semi-annual survey of the energy supply, trade, and services industries, as well as regional suppliers in Germany. It comprises the expectations of around 200 experts concerning short- and long-term developments in the national and international energy markets. The results of the current ZEW Energiemarktbarometer (survey period April 2011) will be published in the ZEWnews July/August 2011 (German language only).