The paradox of energy regulation: The inefficiency of nuclear production

The main objective of this research is to assess the levels of technical efficiency of European electricity companies depending on whether energy is generated through nuclear or other sources in their country of origin. To this end, stochastic frontier models were used to analyze the period from 2005 to 2014. The results show a significant negative effect of nuclear energy production compared to other alternatives in the country in which the company undertakes its electricity generation activity. We believe that this negative effect may be due to regulations which impose the maximum levels for nuclear production which are significantly lower than the installed capacity at nuclear plants.