Switzerland (2013)

Degree of reliance on imported energy: 

Switzerland depends largely on imported fuels for its energy supply. However, once the fuels for the thermal plants are in Switzerland, the electricity supply is self-sufficient. Over a year, electricity imports and exports are balanced. In a simplified view, Switzerland exports electricity during summer and imports during the winter. It exports peak load energy and imports base load energy.  The amount of transit electric energy is about 100% of the domestic production.

Main sources of Energy: 

Switzerland is an electricity hub within Europe due to its main transit lines and storage hydropower plants allowing peak and flexible electricity production. The policies and perspectives of the country are conditioned by the fact that Switzerland is not member of the EU and will probably not be in the near future. The liberalisation process has its own dynamics and may not always be in line with EU policies.



It must be highlighted that electricity production is almost CO2 free. Therefore CO2 emissions from the electricity sector per capita and per GDP are very low in Switzerland compared to neighbouring countries. About 60% of the electricity generation is renewable, with hydropower representing 57%, and nuclear power representing 38%. Small hydropower is by far the most important RET among the institutionally facilitated RETs (e.g., feed-in remuneration). Wind power and photovoltaic account for less than 0.2%, but will increase their contribution.



The Swiss renewable energy policy is defined by Energy Strategy 2050. The Federal Council intends to continue to maintain Switzerland's high level of electricity supply security even without nuclear energy in the medium term. This was the decision taken at its special meeting on 25 May 2011. Existing nuclear power plants are to be decommissioned when they reach the end of their service life, and will not be replaced by new ones. In order to guarantee supply security in the future, within the scope of its new Energy Strategy 2050 the Federal Council is focusing on increased energy efficiency, the expansion of hydropower and use of new renewable energy, and, where necessary, on fossil-fuel-based electricity production (combined heat and power plants, gas-fired combined cycle power plants) and imports. Furthermore, Switzerland's electricity networks are to be expanded without delay and energy research is to be intensified.

Country: 

Switzerland

Extent of the network: 

In Switzerland, electricity is delivered via the medium of the national transmission grid at the high and extra-high voltage level (220/380 kV). This grid is, in turn, interconnected with the international grid of the UCTE (Union for the Coordination of Transmission of Electricity), which guarantees secure grid operation for 450 million people in 24 countries across Europe. Switzerland plays a pivotal role as a European electricity hub from which the entire national economy benefits.

Capacity concerns: 

Independently of the development of the electricity network, Switzerland faces challenges in its electricity production. There will be an electricity gap between the domestic production and demand between 2020 and 2025. This is because the nuclear power plants within Switzerland are reaching their end of use (26 TWh/year less production in 2035), the long term purchase contracts of electricity with France are coming to an end (12 TWh/year less in 2035), and there remains an increasing demand for electricity.



The Swiss society will consume more and more electricity per capita in order to reduce its energy consumption and CO2 emissions per capita. For example, electrical mobility (hybrid and electrical cars for private and public use) will replace part of the fossil-fuelled mobility and electric heat pumps will replace fossil-fuelled heating installations, reducing CO2 emissions and overall energy consumption. The increase in electricity demand is therefore mainly triggered by these changes in energy vectors and by the population growth, as well as by the growing part of ICT equipment. However, energy efficiency should help to reduce this increase, although it will probably not eliminate it.

Potential for Renewable Energy: 

Solar

The field of photovoltaics is in its prime; the first solar modules were used more than fifty years ago to supply power on mini-satellites. Today, the largest solar power installation in Switzerland, on the roof of the Stade de Suisse, generates 1.3 MW of electricity per year. Even in the Swiss "Mittelland", the lowlands, the average level of the sun’s radiation is sufficient to allow efficient solar power production.



Wind Energy

With the introduction of the FIT, one of the goals of Switzerland's energy policy is to increase the proportion of electricity produced by “new” renew¬able energy (without large-scale hydro) by 5,400 GWh, or 10% of the country's present-day electricity consumption, by 2030. Wind energy should contribute 600 to 1,200 GWh to these targets. The Swiss wind energy concept (plan) also identifies the calculated wind energy potential for Switzerland, based on the real existing wind conditions on the sites and on the possible num¬ber of plants to be installed. The poten¬tial is outlined by time horizons: Time horizon 2020: 600 GWh; Time horizon 2030: 1,500 GWh; Time horizon 2050: 4,000 GWh.



Biomass

Relative contribution of biomass to Swiss energy production in 2004: wood 2.5%, biogas from wastewater treatment 0.18%; other biomass (biogas from agriculture, etc.) 0.056%.

Targets / measures: SwissEnergy and the Coop Naturaplan standard together aim at fostering biogas from biodynamic agriculture from to date one up to a minimum of 50 plants by 2010.

Associations (selection): Biomass Energy Switzerland with the aim to convey energy from different sources of biomass (e.g: compost, dung, sludge); Wood Energy Switzerland; Biogas Switzerland.



Hydro

The major renewable energy source in Switzerland is hydro. In 2011 approximately 54% of total electrical energy was produced by hydro plants, which include run of the river, storage and pumping plants. Today there are 556 hydropower plants in Switzerland that each have a capacity of at least 300 kilowatts, and these produce an average of around 35,830 GigaWatt hours (GWh) per annum, 47% of which is produced in run-of-river power plants, 49% in storage power plants and approximately 4% in pumped storage power plants. Today 8500GWh of storage capacity in form of storage lakes filled with precipitations and melting water as well as pumped storage plants are exploited (which is tremendous potential compared to for instance German installed storage capacity of 60GWh – which considers pumped storage, compressed air, storage lakes etc.).

Potential for Energy Efficiency: 

The transport and residential sectors were the largest contributors to Swiss final energy consumption in 2011, with 30.7% (5,969 ktoe) and 28.4% (5,534 ktoe) respectively. The dominant areas for improvement of Swiss energy efficiency lie in the residential and industrial sectors, including heating, hot water, lighting and building construction. A significant number of measures across all sectors are targeted under the current SwissEnergy program, administered by the Federal Office for Energy. This includes energy labelling for appliances and motor vehicles, and energy modelling at a canton level to determine areas for improvement.

Ownership: 

The electricity market in Switzerland began liberalisation in 2008, with the passing of the Federal Electricity Supply Act, and is still not fully liberalised.



Generation: Electricity producing companies using nuclear and some fossil energy sources, as well as renewable energy sources. Most of the companies still belong to public entities, such as Communes and Cantons. There are over 800 hundred of them, but the market is getting consolidated. The biggest companies are: Alpiq, Axpo, BKW/FMB, CKW, EGL, EWZ and Repower.



Transmission: The Transmission System Operator (TSO) – Swissgrid – runs the transmission system in a non-discriminatory way, including the connection of generators, large consumers and underlying distribution networks to the transmission network. The TSO is also responsible for the grid connection of RET plants and the ancillary services. The TSO is regulated by the electricity regulator ElCom. It will become the owner of the transmission network in 2013; it currently belongs to the electricity producing companies.



Distribution: Distribution System Operators (DSOs) run the distribution system at lower voltage levels that delivers electricity to the end consumers. These remain mainly local/regional utilities. The DSOs are regulated by the ElCom.

Suppliers and traders: Same or different from the electricity producing companies and DSOs. Suppliers make contracts with final consumers to deliver electricity, regardless of their point of connection. Traders can sell directly to large consumers.

Structure / extent of competition: 

Electricity

Approximately 900 companies are currently involved in the production, distribution and supply of electricity in Switzerland. These 900 companies supply electricity in Switzerland to around 7.4 million inhabitants as well as to customers in industry and trade. Different sizes of companies are involved, ranging from small entities supplying single communities to international conglomerates.



The Swiss energy market comprises nearly 1,000 players, including just over a handful of major consortia (known as Uberlandwerke) with vertically integrated operations, and about 80 power producers, who differ considerably in terms of size and operations. The vast majority of market players are publicly owned regional and local utilities that distribute electricity to their local municipalities. Only some of these regional and local distributors can produce electricity. The largest utilities are responsible for approximately 80% of the power production and 90% of the energy supplied in the country. The liberalisation of the Swiss electricity market and integration with the European market is expected to lead to a rapprochement of the Swiss electricity players.

Existence of an energy framework and programmes to promote sustainable energy: 

Swiss Energy Policy

Since 2007, the Swiss energy policy is based on the four pillars energy efficiency, renewable energies, the replacement and new construction of large-scale power plants, as well as foreign energy policy. This policy is operationalized by action plans that foresee to decrease the consumption of fossil fuels by 20% and to increase the portion of renewable energies of the total energy consumed by 50% until 2020 (from 16.2% to around 24%). The action plans envisage limiting the increase in energy consumption between 2010 and 2020 to 5%, with a stabilisation of energy consumption thereafter. They consist of a set of comprehensive incentive measures, direct subsidies, and regulations and minimal standards, which fall into the responsibility of either the Swiss Federation, or the Parliament, or the cantons. In the latter case, the Federation assists in harmonizing the independent cantons’ efforts.



Energy Strategy 2050

After the incident at the Fukushima Daiichi nuclear power plant in spring 2011, the Swiss government and parliament decided to completely phase out nuclear power, possibly until 2034. As a direct consequence of this decision, the “Energy Strategy 2050” was adopted, laying out a roadmap towards a significant reduction in final energy use and a stabilization of electricity use. The medium-term policy measures will focus on improving energy efficiency, increasing renewable energy generation – especially hydro power but also other renewable sources –, and natural gas. The corresponding legislative proposals are due for public and parliamentary consultation in fall 2012 and spring 2013, respectively. The new legislation should then enter into force in the beginning of 2015.



Kyoto Protocol

As a signatory state to the Kyoto Protocol, Switzerland committed to reduce its GHG emissions by 8% below the 1990 level between 2008 and 2012. This overall target was split up into sectoral targets. With fossil fuels used in the heating and transport sectors contributing a major part to Swiss national GHG emissions, policies in general focus on the building sector (including refurbishment of the building shell and installation of renewable energy) and on transport. Hence, in its national CO2 law of the year 2000, Switzerland adopted a joint CO2 emission reduction target for heating and process fuels and transport fuels of 10% below 1990 levels in the period 2008-2012. This target was further split up into a reduction target of 15% for heating and process fuels, and 8% for transport fuels.



Swiss Energy Programme

The SwissEnergy [EnergieSchweiz] programme is the central platform for connecting, coordinating, and information and know-how exchange between the several actors in the fields of energy efficiency and renewable energies in Switzerland. It supports both mandatory regulations and voluntary initiatives in households, municipalities, and business & industry.  



Additionally, further policies have been established at Cantonal and Communal levels. Further to these legal bases, several energy programs and strategies have been developed at the Federal, Cantonal and Communal levels.



On the feed-in tariff, please see the section below on regulatory framework.

Current energy debates or legislation: 

With regard to the longer-run energy policy, a motion for a gradual overhaul and introduction of CO2 and energy taxation, respectively, is tabled by government authorities. This is in line with the Swiss Federal Council’s longer-term objective to introduce an “overall energy tax” in the sense of an ecological tax reform with a steering effect on energy demand. The respective public consultation is planned for summer 2014 and will be based upon an analysis of the possible designs of the tax, for instance with regard to revenue recycling.

Major energy studies: 

European Energy Network

Switzerland is a member of the EnR, which is a voluntary network of European energy agencies which aims at promoting sustainable energy good and best practice. EnR also strengthens cooperation between members and other key European actors on all sustainable energy issues (energy efficiency, sustainable transport and renewable energy).



Despite the country’s high dependence on nuclear energy, the Federal Council has decided to gradually phase out nuclear power. The safe operational lifespan of the existing nuclear power plants is expected to be about 50 years. On this basis, the last of Switzerland’s nuclear power plants would be taken offline in 2034. Switzerland seems to be the only country to have made a complete about turn following the Fukushima disaster.

Role of government: 

Federal Department of the Environment, Transport, Energy and Communications (DETEC)

The Federal Department of the Environment, Transport, Energy and Communications (DETEC) is responsible for executing Swiss policy for the sustainable use of energy. DETEC is totally committed to Agenda 21, the Federal Council Strategy and the Action Plan for 2012–2015 as the legal bases of Swiss sustainability policy.



Swiss Federal Office of Energy (SFOE)

The Swiss Federal Office of Energy (SFOE) is responsible for all questions relating to energy supply and energy use within the Federal Department of the Environment, Transport, Energy and Communication (DETEC). Its tasks include the promotion of R&D in economical and efficient energy use and the use of renewable energy and the management and co-ordination of the SwissEnergy programme. SwissEnergy is not dedicated to research, but promotes the use of renewable energy and the efficient use of energy in trade and industry, the service sector and transport.

Government agencies in sustainable energy: 

Since 1990, all cantons have drawn up their own energy legislation and regulations, and with the enactment of the Federal Energy Act and the Federal Energy Ordinance on 1 January 1999, the Federal Council fulfilled the mandate it had received following the approval by the electorate of the energy provisions in 1990.



Agency for Renewable Energy and Energy Efficiency

Agency for Renewable Energy and Energy Efficiency (AEE) (http://www.aee.ch) has as goal consistent use of renewable energy at the same time exploiting all potential efficiency, by actively shaping the policy and regulatory environment, protecting the environment, promoting the economic and innovation in Switzerland, creating sustainable jobs, and across the federal, cantonal and municipal level and across borders. AEE aims at bringing together industry associations, utilities and research/innovation institutions in order to make them work synchronously towards the mutual aim of increase of energy efficiency and renewable production growth.



The Energy Research Commission (CORE)

The CORE assists with the formulation of guidelines governing energy research and the implementation of research findings. Its members represent the industrial sector, the energy industry, universities and various energy agencies and research institutions in Switzerland.

Energy planning procedures: 

The Swiss electricity supply act requires the national transmission system operator to draft multi-annual plans on grid operation and development, covering network development also. These plans currently feed in to the Federal Energy Authority’s planning procedure, in conjunction with the federal spatial planning authority. Transmission line projects are evaluated according to superordinate political objectives and assessed for conflicts with other projects, and then submitted to the federal government for approval. A new network planning procedure is currently being developed by the government, which plans to introduce politically legitimised sets of scenarios as a basis to the planning process, and annual updates to these plans.



Currently, however, network development plans are the sole responsibility of the TSO, with indirect monitoring from the national regulator, EICom. Public consultation is planned as part of the scenario creation process in the new system, but network development plans are not to be included in this, only to be made public after the national regulator has decided which projects require consultation with the public.

Energy regulator Date of creation: 

The Federal Electricity Commission (ElCom)

It is the independent regulatory authority for the electricity sector. It is responsible for monitoring compliance with the Federal Electricity Act and the Federal Energy Act, taking all necessary related decisions and pronouncing rulings where required. There are no specific regulatory authorities for oil and gas as Switzerland does not produce any.

Degree of independence: 

ElCom is the independent regulatory authority for the electricity sector.

Regulatory framework for sustainable energy: 

Swiss energy policies are mostly dictated by the Energy Act (including the Nuclear Energy Act, the Electricity Supply Act and the CO2 Act) as well as strategies and initiatives such as Energy Strategy 2050 and Masterplan Cleantech. In general Switzerland complies with European Union 20/20/20 strategy.



The main policy instrument to boost the deployment of renewable power in Switzerland is currently the so-called “kostendeckende Einspeisevergütung (KEV)”, a feed-in tariff. The FiT is lowered regularly to account for technological advances and decreasing costs of PV cells and currently varies between CHF 0.235/kWh (EUR 0.194/kWh) and CHF 0.428/kWh (EUR 0.354/kWh) for photovoltaic systems that are attached to or integrated into the roof. The applicable rate also depends on the size of the installation and is guaranteed for 25 years (The Swiss Federal Council, 2012a). The funds for the KEV are limited and due to fact that the demand for support through this scheme has been tremendous, there is now a long waiting list to receive the KEV. However, given that many cantons and/or local governments offer subsidies for the installation of photovoltaic cells, house owners who want to install photovoltaic systems are offered an alternative incentive scheme.



Based on the European Energy Efficiency Directive recently adopted, the new Swiss Energy Law introduces binding energy efficiency targets for energy utilities with an annual overturn of at least 30 GWh. The utilities that fall under the scheme need to effect energy savings of a certain percentage of their energy sales, to be stipulated annually and individually and amounting to up to 2%. These energy efficiency improvements can be fulfilled by implementing standardized or non-standardized measures, with the latter requiring prior examination and approval.



The first cross-border green certificates scheme in Europe is the recently established Norwegian-Swedish green certificates scheme. It extended the existing Swedish green certificates scheme to Norway, thus establishing a common Swedish-Norwegian market for green electricity certificates. The scheme is supposed to run at least from 2012 until 2020. The largest share of certificates has so far been issued for biomass based electricity, wind power, and small-scale and refurbished hydro power. Both power suppliers and consumers are required to purchase green certificates for a specified share of the electricity they sell or consume. For the year 2012, this quota is set at 17.9%.

Regulatory roles: 

ElCom is responsible for securing the smooth transition from a monopoly situation in the electricity supply sector to an electricity market based on the principles of competition. ElCom’s duty is to ensure that the liberalisation of the market does not result in excessive tariff increases and that the network infrastructure is properly maintained and expanded in order to guarantee an adequate supply of electricity. ElCom has been entrusted with extensive judicial powers so that it can effectively perform its various duties. It monitors compliance with the provisions of the Electricity Supply Act and the Energy Act, and can pronounce legally binding decisions and rulings as necessary.

Role of government department in energy regulation: 

Both the national Competition Commission (WEKO) and the Federal Office of Energy (SFOE) are involved in regulating some aspects of the energy sector. The SFOE in particular is responsible for formulating the current Electricity Supply Act and monitoring its associated ordinances. EICom is responsible for dealing with disputes that arise from the provisions of the Act, and the WEKO is responsible for monitoring competition within the energy sector, and ensuring the prevention of state restrictions to competition.

Regulatory barriers: 

The current Swiss legislation for the promotion of new renewable technologies is not satisfying. Whilst less expensive technologies like wind and small hydropower struggle with legal restrictions and objections from private parties, the growth of photovoltaics is strongly inhibited by the restrictions of the Swiss feed-in tariff system. This is one reason why photovoltaic power still only composes around 0.1% of the Swiss power consumption even though private producers are willing to build new PV installations and their construction is rarely obstructed.

References: 

Crettenand, Nicolas (2012): The Facilitation of Mini and Small Hydropower in Switzerland: Shaping the Institutional Framework (with a Particular Focus on Storage and Pumped-Storage Schemes) Available at http://infoscience.epfl.ch/record/176337/files/EPFL_TH5356.pdf [Accessed 16th December]



Energy Research Knowledge Centre website: Switzerland Available at http://setis.ec.europa.eu/energy-research/country/Switzerland [Accessed 24th November]



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Gerigk, Joscka, Halbritter, Katja et al. (2012): The Current Climate and Energy Policy in the EU and in Switzerland Available at http://www.off4firms.ethz.ch/wp-content/uploads/2013/01/Off4Firms-Working-Paper-D1-3.pdf [Accessed 21th December]



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Madlener, Richard (2006): ENERGY and CLIMATE CHANGE

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Lukovic, Slobodan & Ursin, Max (2013): National Frameworks: The Case of Switzerland Available at http://www.alpstore.info/Down.asp?Name=%7BMXODLFZVOR-1092013161839-TORTJOPOOJ%7D.pdf [Accessed 21th December]



Swissgrid website: Power market Available at http://www.swissgrid.ch/swissgrid/en/home/company/portrait/market.html [Accessed 18th November]



Schwartz, David (2012): The Energy Regulation and Markets Review Available at http://www.stikeman.com/en/pdf/ERMR_Jun2012.pdf [Accessed 18th December]



Weibel, David (2011): The Swiss Feed-in Tariff System Analysis of the Swiss Policy and its Implications on the Development of Photovoltaics in Switzerland Available at http://www.files.ethz.ch/cepe/Top10/Weibel.pdf [Accessed 17th December]



SwissElectric website: Energy Efficiency. Available at: http://www.swisselectric.ch/en/energieeffizienz.html [Accessed 29th January]



IEA (2011): Country Energy Statistics - Switzerland. Available at: http://www.iea.org/statistics/statisticssearch/report/?&country=SWITLAND&year=2011&product=Balances [Accessed 29th January]



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Weber, A. et al (2013): Long-term Power System Planning in the Context of Changing Policy Objectives - Conceptual Issues and Selected Evidence from Europe. Available at: http://renewables-grid.eu/fileadmin/SEFEP_grid_planning_June2013.pdf [Accessed 29th January]



EICom website: Similar authorities and official bodies. Available at: http://www.elcom.admin.ch/org/00030/index.html?lang=en [Accessed 29th January]