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Storage power plants can now offer the price at which they want to retain water for the end of winter.
Switzerland’s energy supply is to be strengthened for the critical phase towards the end of winter. In the event that the market cannot handle critical bottlenecks itself. The Federal Council has passed the ordinance for the hydropower reserve for 24 days.
The regulation will come into effect on October 1st. From then on, storage power station operators can submit offers to Swissgrid if they want to voluntarily hold water reserves until the end of winter for a fee. In these offers, they will explain “what they need” if they do not turbine the water, as Elcom President Werner Luginbühl explained.
In these offers, they will explain to the operators what they must have if they do not turbine the water.
Only for critical bottlenecks
The hydropower reserve is an insurance that is available off the market. It may only be used to bridge critical bottlenecks, for example towards the end of winter, when electricity consumption is unexpectedly high, electricity imports are severely restricted and domestic nuclear power plants are less available.
Energy Minister Simonetta Sommaruga explained that the measure is part of a whole bunch of steps to minimize the consequences of the Ukraine war on the energy supply.
Legend:
Federal Councilor Simonetta Sommaruga and Elcom President Werner Luginbühl on September 7, 2022 on their way to the media conference on the hydropower reserve.
Keystone/Peter Klaunzer
The Federal Council had already decided in February to bring forward the hydropower reserve proposed in the federal law for a secure power supply. It is still under discussion in Parliament. The ordinance that has now been passed for a limited period largely corresponds to the bill, but is limited to reservoirs.
Who bears the costs?
According to the energy minister, the hydropower reserve should cost between 650 and 700 million francs. This fee for security of supply is also intended to compensate for the loss of electricity sales by the power plants. Because the water will be worth less when the reservoirs fill up again in spring.
The costs for the reserve are borne by the consumers through the network costs, which makes them around 1.2 centimes per kilowatt hour more expensive. The Federal Electricity Commission (Elcom) had already determined the dimensions of the reserve on August 23.
What if it doesn’t work voluntarily?
Accordingly, 500 gigawatt hours (GWh) plus/minus 166 GWh should remain in the reservoirs. Reserves must be held from December 1 to May 15, 2023. The reserve is dimensioned so that 24 days can be bridged.
If there are not enough offers after the end of the tender or if they are too expensive, the Federal Department for the Environment, Transport, Energy and Communications (DETEC) can set a fee and oblige the power plants to maintain reserves.
Is the system still running correctly?
Sommaruga also commented on the development of electricity prices and calls for a restructuring of the electricity market. She emphasized that in recent years, depending on the canton, very different prices have also applied to protected customers.
Depending on this, customers could also have moved in the free market. With the current crisis, what had previously been taken for granted is now coming to the surface, says Sommaruga. Now the owners – municipalities, cities and cantons – must first check what lessons can be learned from this and what it means for customers.