The impact of the introduction of nuclear power on electricity prices in a power exchange-based liberalised market

• An agent-based simulation that replicates the Italian power market is created.
• The impact of the introduction of electricity from Nuclear Power is tested.
• It is shown that NP reduces and stabilises electricity prices.
• The level of load and the NP plants' ownership are crucial for the result.

In this paper, we evaluate the impact of the introduction of electricity produced by Nuclear Power (NP) plants on the electricity price formed in a liberalized, power-exchange based market. In order to do so, we build a realistic large-scale agent-based model that replicates the features of a real market (the Italian one). Firstly, we validate the computational model using exact historical data about supply, demand and network characteristics. A statistical analysis confirms that the simulator well replicates the observed prices. Then, a future scenario is simulated, based on plausible market evolutions and energy carriers’ price dynamics. The future electricity prices are evaluated with and without NP plants. Different NP plants’ ownerships are considered to take into account how agents’ competition is affected by the introduction of such a large base-load generator. It is shown that NP reduces the prices and volatility, but the size (and the sign) of the impact depends on the pattern of the expected demand load and the ownership structure of the NP plants.