Switzerland faces challenges as it seeks to cut greenhouse gas emissions by a fifth by 2020 while phasing out nuclear power, according to a review of Switzerland’s energy policies published Tuesday by the International Energy Agency (IEA).
Though it applauds Swiss electricity market reforms and high levels of oil and gas security, the report, Energy Policies of IEA Countries – Switzerland 2012 Review, foresees difficulties for a planned stabilisation of electricity demand.
“The transition to a low-carbon economy is not for free. In the absence of nuclear power, maintaining sufficient electricity capacity will require strong policies to promote energy efficiency and renewable energy. The government has already proposed measures, but they will likely not be enough,” said IEA Executive Director Maria van der Hoeven as she presented the review in Bern. “Switzerland now needs to develop the legal and regulatory framework as a core of its Energy Strategy 2050 to provide stable, long-term conditions for energy market participants.”
The report notes that Switzerland has significant cross-border electricity flows and its reservoir and pump-storage hydropower plants could act as a battery for the wider region. The country should continue to take an increasingly European approach to developing its electricity infrastructure, to benefit both the Swiss and their neighbours.
The report encourages Switzerland to move to a fully open electricity market by 2015. It also urges the country to reconsider the system of regulated end-user prices which is subsidising electricity consumption at a time when low-carbon power supply is becoming more constrained and expensive. Deregulating end-user prices and shortening and simplifying licensing procedures would also encourage investments in electricity grids and generating capacity.
Because Switzerland’s energy-related CO2 emissions come mostly from oil used in transport and space heating, the report highlights those areas as priorities for action. Commendably, the country is using a CO2 tax to make polluters finance decarbonisation efforts in space heating. Stronger efforts will be needed to reduce emissions from private car use, however.
Current Swiss policy requiring gas-fired power plants to offset CO2 emissions undermines competitiveness and drives up abatement costs in relation to neighbouring countries. A more level playing field would encourage investments and improve Switzerland’s security of electricity supply.