Electricity Market Integration and the Impact of Unilateral Policy Reforms

  • Luigi Grossi
  • Sven HeimEmail author
  • Kai Hüschelrath
  • Michael Waterson


We investigate the impact that two German energy reforms—phase-out of nuclear power plants after the Fukushima incident and expansion of renewables due to fixed feed-in tariffs—had on neighbouring countries’ consumers. The unilateral German reforms generated substantial negative and positive impacts, respectively, in neighbouring countries with the highest overall effect of German policy found in France, not Germany; an annual negative impact on consumers of 3.15 billion €. We also find significant differences in market integration between neighbouring countries by calculating ratios between the estimated policy decisions’ impacts before and after controlling for interconnector congestion.



We thank Ulrich Laitenberger, Philipp Schmidt-Dengler, Frank Wolak, Oliver Woll, the editor James Forder and two anonymous referees for helpful remarks and Bastian Sattelberger for excellent research assistance. The paper has benefited from presentation at the 2015 CRESSE conference.

Supplementary Material

Supplementary material is available online at the OUP website. This comprises an online Appendix and the data replication files. The data used in the paper are bought from commercial providers and are not publicly available. Independent researchers, however, can be given access to the data required to run the do-file at ZEW subject to the signing of a data usage contract. The usage contract allows independent researchers to access the data, but not to take the data set away from ZEW.


This work was supported in part by the Engineering and Physical Sciences Research Council of the UK under grant number EP/K002228 to MW. We benefited from the facilities of ZEW in producing the paper.


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Copyright information

© Springer Nature Switzerland AG 2019

Authors and Affiliations

  • Luigi Grossi
    • 1
  • Sven Heim
    • 2
    • 3
    Email author
  • Kai Hüschelrath
    • 3
    • 4
  • Michael Waterson
    • 3
    • 5
  1. 1.University of VeronaVeronaItaly
  2. 2.Mines ParisTechParisFrance
  3. 3.ZEW Centre for European Economic ResearchMannheimGermany
  4. 4.Schmalkalden University of Applied ScienceSchmalkaldenGermany
  5. 5.University of WarwickCoventryUK

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