Water energy faces turbulent future

Switzerland’s hydro plants are facing some stiff competition from cheaper imported energy. The future of loss-making power stations hangs in the balance. (SRF/RTS/swissinfo.ch)

Cut price energy from coal-fired power stations and subsidised renewable energy from abroad are undercutting hydro, which accounts for about 60% of domestic production.

Alpiq, the country’s biggest energy provider, recently reported heavy losses and announced plans to sell up to 49% of its hydropower portfolio. Investors for pension schemes are interested, but there are fears that retirement funds could be squandered if hydro continues to lose money.

The federal government’s 2050 Energy Strategy expressly seeks to expand the use of hydropower. But a 2014 study carried out jointly by Germany, Austria and Switzerland came to the conclusion that hydropower expansion is not justifiable under the current conditions.

Nevertheless, hydropower remains a central pillar of the Swiss electricity supply and it is likely to become more important as ageing nuclear power stations close down. The question is, how will it survive the interim stage?