Swiss Competence Center on Supply of Annual Conference 2015 The Future of Swiss A Review on Drivers and Uncertainties

Michael Barry, Patrick Baur, Ludovic Gaudard, Gianluca Giuliani, Werner Hediger, Franco Romerio, Moritz Schillinger, René Schumann, Guillaume Voegeli, Hannes Weigt This research project is part of the National Research Programme "Energy Turnaround" (NRP 70) of the Swiss National Science Foundation (SNSF). Further information on the National Research Programme can be found at www.nrp70.ch.

Market Aspects: Project: 7Day Average [CH] Monthly Average [CH] 7Day Average [DE] Monthly Average [DE] 2015 2016 2017 2018 100

WP1: HP Operation Screening Verifi- Case Studies: 80 of cation WP2: HP Investment Drivers Development of Conso-

with and Framework lidation 60 Uncer- Generic Framework Stake- WP3: HP Sustainability tainties /MWh

holders € Application 40

Workshop Communication to Communication to 20 with stakeholders/ and workshops stakeholders 0 other experts with stakeholders and final publications Jan Mrz Mai Jul Sep Nov Jan Mrz Mai Jul Sep Nov Jan Mrz Mai Jul Sep Nov Jan Mrz Mai Jul Sep Nov Jan Mrz Mai Jul Sep Nov Jan Mrz Mai Jul Sep Nov Jan Mrz Mai Jul Sep Nov Jan Mrz Mai Jul Sep Nov Jan Mrz Mai Jul 07 07 07 07 07 07 08 08 08 08 08 08 09 09 09 09 09 09 10 10 10 10 10 10 11 11 11 11 11 11 12 12 12 12 12 12 13 13 13 13 13 13 14 14 14 14 14 14 15 15 15 15 Source: EEX Project Team: Project Partners: Market prices are on a low level, due to: Weigt, UniBas: Lead, WP1 Alpiq, Repower, Azienda Elettrica Schumann, HES-SO: WP1 Ticinese (AET), Forces Motrices • Low emission permit prices Valaisannes (FMV), and Misurio Romerio, UniGe: WP2, WP3 • Low global coal price level Hediger, HTW Chur: WP3, WP2 Case Studies: • Increase of renewable generation 1.Pilot SA in Valposchiavo, (Repower) 2.Single-site in Valais (Alpiq) 3.Multi-site in Leventina, Ticino (AET, Alpiq) Trends are likely to remain stable in coming years Workshop and Questionnaire March 12, Berne: Little influence possibilities Swiss HP needs to adjust to market environment 45 participants from Now 2025 2050 + • Business/Industry FACTORS/ASPECTS • University/Research FUTURE DEVELOPMENT OF SWISS HP • Administration Natural factors • NGO Business Business perspective Technical factors perspective in in the long term External input from: the short term Policy Aspects: Political, legal and • Norway (A. Midttun) social aspects • Germany Management REGIONAL IMPACTS OF HP (C.v. Hirschhausen) aspects Environmental impacts Investment/Financing: Governance: Social impacts Discussion on: Market aspects • High initial investment costs • Concessions • Short-Term Challenges Economic impacts • Debt financing • Water fees • Long-Term Aspects • Long Lifetimes • Network fees Main Drivers and Impacts in the HP System • Linear depreciation • Partnerwerke

Designed for non-market Structure based on environment regulated environment Need to be adjusted Findings: Adjustment process will for risky, cyclical require agreements at dynamics of federal, cantonal and liberalized markets local level All aspects perceived 10 2 1 18 19 9 6 20 17 as important 9 15 8 10 15 15 11 13 9 12

12 7 12 18 2 1 8 10 6 6 Market and Legal/Policy 11 1 8 3 5 4 aspects most important 2 1 3 1 Operation: ST LT ST LT ST LT ST LT ST LT Natural and Technical 1 1 1 1 factors less urgent High labour costs in comparison to EU competitors 1 1 2 2 Further efficiency gains possible? Natural Technical Political, Management Market Factors Factors Legal, Aspects Aspects Social Aspects Relative Influence of Factors on the Future of Swiss HP in the Short (ST) and Long Term (LT) Next Steps

• Evaluation of HP Operation: Which markets are important? How

4 7 5 8 6 10 5 9 7 11 4 5 can the performance be improved?

14 15 10 13 11 13 12 14 9 11 3 6 • Development of Long Term Evaluation Approach: How to deal Swiss HP must take all 6 5 10 6 9 3 6 3 5 1 11 9 with high uncertainty in the long run (investment decision)? markets opportunities 3 3 1 2 2 2 5 4 10 5 • Initiate a comprehensive stakeholder process: to analyse the 1 1 1 1 1 2 into account companies’ internal and external regulatory framework and design Only Green Markets are ST LT ST LT ST LT ST LT ST LT ST LT new approaches, to perform an regional impact analysis, and to 1 1 seen not as important investigate the interplay between and Europe 7 8 6 7 6 7 8 9 7 8 7 8 as the other

Futures/ Day-Ahead Intraday Reserve/ System Green Forwards Market Market Balancing Stability Markets Services For more information visit our project homepage: Influence of Markets on the Future of Swiss HP https://fonew.unibas.ch/forschungprojekte/projekte/hp-future/ in the Short (ST) and Long Term (LT)