Bottlenecks in restructuring Swiss energy supply

Comments on the Monitoring Report 2018 regarding the Energy Strategy 2050

The Energy Strategy 2050 is a done deal at the political level. Individual measures regarding energy consumption and demand are also already showing initial positive effects. However, the greatest challenges for Switzerland are yet to come. Over the medium term, the goal is to replace no less than one-quarter of current Swiss demand with alternative energy. We are still well off that mark.

The federal government has realigned Swiss energy policy with the Energy Strategy 2050. The concept should make it possible to gradually leave behind nuclear energy and slowly rebuild the Swiss energy system by 2050, while maintaining at least the same level of supply security. In doing so, energy efficiency will be increased dramatically, renewable energy sources will be massively increased and energy-related CO2 emissions will be significantly reduced. In order to monitor progress in implementing the Energy Strategy 2050, the federal government regularly publishes a report under the auspices of the Federal Office of Energy (BFE). The report for the year 2018 was published in mid-November, and below, we will discuss a number of points related to that report.

The first measures for "low-hanging fruit" are already having an effect. As an example, energy consumption per person and per year have been reduced and energy demand has more or less evened out – with a very minimal increase. Still, some new challenges are arising in terms of energy consumption in Switzerland. In particular, population growth and the desired rapid growth in electromobility will influence the energy supply situation over the medium and long term.

Foreign investment: regulatory security is lacking

We can already see today that we are confronted by electricity shortages in Switzerland in winter. The shutdown of the Mühleberg nuclear power plant at the end of 2019, which generates about three (3) terawatt hours per year (TWh/a) or roughly 5% of Swiss electricity demand, will exacerbate that deficit. On the other hand, between 2010 and 2020, the energy strategy in Switzerland stipulates a net increase of three (3) TWh/a of electricity production from renewable energy sources (not including hydropower). At the end of 2017, according to the current report, 75.1% of that has been implemented. As a comparison: Between July 2016 and March 2018, according to the report from Energiezukunft Schweiz, Swiss investors outside Switzerland recorded a growth in installed power of 615 megawatts (MW), i.e. an energy increase of 1.66 TWh/a, with other plants still under construction. Yet these investments will provide only a limited boost to the Swiss energy revolution. On the one hand, there is no bilateral power agreement with the EU, and therefore no regulatory security. On the other hand, it is uncertain whether major power shortages in countries where new alternative power plants are located will prevent that power from being exported to Switzerland.

Hydropower: only a slow increase in production capacity

Domestic hydropower continues to provide a ray of hope for the future, although much of the potential has already been exhausted on that front. The Energy Strategy 2050 stipulates an increase of 1.5 TWh/a on top of the current 35.9 TWh/a by 2035. Of that, currently 0.26 TWh/a are under construction, and there are applications for investment contributions for a further 0.059 TWh/a. Large hydropower projects such as Chlus still hang in the financial balance and will remain unrealistic without new subsidies or a significant rise in electricity prices.

There are still great challenges ahead: New, more restrictive regulations on residual water conservation may lead to a reduction in output. Due to deposited sediments and the associated purging problems, the volume of a number of storage reservoirs is set to decline in the next several years, thereby limiting the summer-winter redistribution process. In addition, with a presumed duration of 60 years, both blocks of the Beznau nuclear power plant as well as the Gösgen nuclear power plant will be removed from the grid by 2039. Together, these two plants produce 13 TWh/a of electricity, which is roughly 20% of Switzerland's current demand.

Importing power: bottlenecks are predestined

The last glimmer of hope will be to import power from neighbouring countries. Yet, the future is more than uncertain on that front as well. Germany, for example, has resolved to withdraw completely from nuclear power by 2022, and in many other European countries existing largescale power plants are gradually coming to the end of their lifecycles. The new, large-scale renewable energy plants, including offshore wind farms, will be built in areas with less than optimal grid connectivity, and due to resistance from local populations as well as due to economic factors, not all of the necessary grid expansion projects will be realised. In future, these bottlenecks will further limit the cross-border exchange of power and impede the import of power into Switzerland. Unfortunately, the planned national high-voltage network expansion projects won't provide any assistance here. Never mind the fact that the targeted expansion of the distribution grid does not address the new demands of distributed production, new storage possibilities and network convergence.

In summary, Switzerland is still a long way off the envisaged restructuring of the power system. A lot will be asked of politics, companies and – last but not least consumers (as end users) – over the coming decades.

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