Switzerland banks on hydropower reserve to combat energy crunch

Hydropower accounts for around 60% of total Swiss electricity production. Keystone / Gian Ehrenzeller

The Swiss Federal Electricity Commission (Elcom) has laid out plans to hold back hydropower reserves to help compensate for anticipated energy shortages this winter.

Elcom wants hydropower operators to hold back up to 666 gigawatt hours of electricity that would normally be sold on the open market. That’s enough to power 150,000 households for a year.

The reserves would be selectively used to bridge shortfalls in electricity supply in Switzerland. But Elcom warns it would not be sufficient to cover the consequences of a widespread electricty shortage across Europe.

The government would then compensate electricity companies for lost revenues incurred by holding back the reserve. Elcom expects this to cost to be in the “mid-three digit million” range but cannot put a precise price on the initiative in the face of volatile electricity prices.

In the final reckoning, the bill would be passed onto electricity consumers, Elcom said on Tuesday.

The government is drawing up an official version of the initiative which will come into force on October 1.

Also on Tuesday, the Association of the Swiss Gas Industry said it has secured reserves amounting to 15% of Switzerland’s annual consumption, which are being stored in Europe. 

Options have been negotiated for further supplies from Germany, France, Italy and the Netherlands – up to 20% of Switzerland’s annual needs. But the industry urged the government to set up binding agreements with other countries to ensure such supplies reach Switzerland in the event of an emergency.

The Ukraine war and adverse weather conditions have raised fears of an energy crunch in the coming months. Electricity providers have already warned consumers to expect a steep rise in bills.