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Switzerland Power Key View
- 20 May 2022
Key View: Switzerland's domestic power sector is highly developed, with a relatively large baseload capacity and a modern grid infrastructure providing near-universal access. While near-term growth remains limited, long-term plans to phase out nuclear power will stimulate opportunities for investment in new capacity, decommissioning nuclear power plants and power grid upgrades. Risk-averse investors will be particularly drawn to the high levels of long-term political and economic stability, as well as the robust energy policy framework and easy access to competitive financing options.
Headline Power Forecasts (Switzerland 2021-2026)
|Indicator ||2021e ||2022f ||2023f ||2024f ||2025f ||2026f |
|Generation, Total, TWh ||70.5 ||71.5 ||72.0 ||72.4 ||72.8 ||73.1 |
|Consumption, Net Consumption, TWh ||60.5 ||61.5 ||62.3 ||63.1 ||63.8 ||64.5 |
|Capacity, Net, MW ||23,589.4 ||23,731.3 ||23,888.6 ||24,020.0 ||24,125.9 ||24,215.6 |
|e/f = Fitch Solutions estimate/forecast. Source: EIA, IRENA, Fitch Solutions |
Latest Updates And Structural Trends
- The Swiss Federal Council in February 2022 approved a proposal to set up a hydropower reserve system that would obligate alpine dam operators to retain a certain volume of water in their reservoirs to secure the grid against deficits when demand is highest in the winter. Dam operators will be compensated at an agreed but not yet publicised rate. Furthermore, the council has instructed the Federal Department for the Environment, Transport, Energy and Communications to begin planning for the development of peaking power plants to further bolster power security against winter-time deficits. The Federal Electricity Commission has recommended the development of two to three gas-fired power plants with a combined capacity of 1GW.
- In March 2022, the Swiss government began consultations on its plan to improve renewable energy incentives aimed at promoting growth in the sub-sector. The proposal includes the introduction of investment contributions for wind and geothermal power projects, a restructured investment contribution scale for new and renovated hydropower projects, winter generation bonuses for solar PV plants, new operating cost contributions for biomass plants and a one-time payment mechanism for solar PV plants that are not used for self-consumption. This plan follows from the government's decision to replace the feed-in tariff scheme that is set to expire at end-2022 with an investment contribution plan. Consultations will last until July 8 2022 with entry into force in 2023.
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