Nuclear energy ‘does not reduce the price of electricity’


Nuclear power plants can be attractive for their owners but not necessarily for consumers as they hardly ever determine the price of electricity on the energy exchange, says Alois Tost, an independent energy consultant. In an interview with, the German expert also adivsed against solar photovoltaics to compensate for Germany's nuclear phase-out.

Tost, a German consultant who advises energy firms in the Czech Republic, said the debate about the costs of the nuclear phase-out in Germany had been misled.

Contrary to what has been claimed, the nuclear phase-out will not be felt on consumer prices, he said. This is because nuclear electricity is cheaper than gas, and therefore has no influence on price determination on the wholesale electricity market.

“The price of electricity is formed at the energy exchange and it is always determined by the most expensive power plant which is necessary to meet demand. […] And usually it is the gas power plant which is the most expensive and determines the price of electricity. The nuclear power plants hardly ever decide about price,” said Tost .

As a result, “every power plant gets paid the price which is necessary to pay for the most expensive one, the so-called marginal power plant. Therefore operating a nuclear power plant is highly attractive for its owner.”

"This is a question of who gains and who pays. When somebody says that the nuclear power plant is cheap, it is for the owner but not necessarily for the consumer."

Responding to the argument that electricity prices rose in Germany when the 8 nuclear power plants were switched off, Tost said that this was because they were not replaced by cheaper coal plants for example but with gas power plants.

“If you replace the capacity of a nuclear power plant for example by the capacity of a coal power plant, the price will not change because it is still the natural gas power plant being the most expensive one and deciding about the price.”

Tost did not believe there was a risk that Germany would replace its nuclear capacity with high-polluting coal, a move that would endanger the country's climate goals. In his view, the EU emissions trading scheme for CO2 will regulate emissions, regardless of the technology.

“If somebody says that a new coal power plant will cause a rise in CO2 emission, it is not true because the amount is defined and no more emission certificates will be allocated just because a new power plant is being built.”

Renewable energy sources to fill the nuclear gap?

Asked about renewables, Tost expressed doubts that Germany should invest in solar energy as an alternative to nuclear.

“Photovoltaics are for sure not the most efficient way to produce renewable energy in Germany because considering that they contribute only 14.2 % to the overall renewable electricity production, their share in subsidies for renewables is 38.6 %.”

He also highlighted the difficulties in importing solar power into Germany due to insufficient grid transmission capacity.

“We would need for example to strengthen the transmission grid. In Germany this would face a strong opposition of the population because usually people want to have clean energy but nobody wants to have wind mills or transmission lines in his garden. But it is one of the concepts for the future how to realise the idea to produce the renewable energy where it is the most efficient and to transmit it to other regions”

To read the interview in full, please click here.

The nuclear debate in Germany has been going on since 2000 when the Socialist Democrats and the Greens were negotiating on a 32-year limit for the life time of nuclear power plants. The decision became a law in 2002.

In 2009, this law was cancelled when the Christian Democrats won the election. As a result, the nuclear power plant's lifetime was extended by 14 years for the new ones and 8 years for the older ones.

The Fukushima nuclear accident in March 2011 changed that scenario and persuaded the government to immediately shut down eight nuclear power plants. A decision was later taken to shut down all the country's reactors by 2022.

Subscribe to our newsletters