Not if, but when? Simulating the impact of timing the nuclear phase-out in Switzerland

Swiss electricity companies are faced with uncertainty with regards to the future operation of nuclear power plants in the country. After Fukushima in 2011, the government decided on a gradual phase-out, but only provided a tentative planning. Hence, no new nuclear power plants can be constructed but the old power plants will be allowed to operate until they are no longer deemed safe by the nuclear regulator ENSI. However, the first of the five Swiss nuclear reactors will shut down in 2019, following a decision of the owner, not ENSI, three years ahead of the government’s original schedule. Recent efforts by politicians and citizens to fix the date of the phase-out were unsuccessful. In this paper, we look at the effect of the timing of the phase-out and the associated uncertainty on the wider electricity market. More specifically, we look at the impact on investments, security of supply, wholesale electricity prices, and the amount of greenhouse gas emissions. We developed a simulation model using system dynamics to increase our understanding of the Swiss nuclear phase-out. The system dynamics model includes modules for merit order dispatch, international trading, investment analysis, generation capacity expansion, hydropower storage and dispatch, and other renewable energy production. The model is calibrated with data of the Swiss energy system and includes anticipated policy changes of the wider energy transition in Switzerland. Preliminary results, using various scenarios of both timed and untimed nuclear phase-outs with varying levels of uncertainty, show that the timing uncertainty does not significantly impact market development. Investors seem to wait for observable rather than anticipated market changes. However, delaying the nuclear phase-out does have significant advantages in terms of greenhouse gas emissions and security of supply. The implications of these findings are discussed in the context of the Swiss Energy Strategy 2050 and the country’s obligations under the Paris Agreement.