What happens when insurance companies decide to withdraw and no longer cover the most at-risk areas? That is the theme at the heart of the new report by the environmental NGO, but also of "Sigma", that of the Swiss Re Institute. Analysis
"Flexibility solutions are now essential. However, they face a structural difficulty: their costs are decreasing faster than market rules evolve," explains Xavier Blot, associate professor at emlyon business school.
By naming their first edition "Wind farms are taking shape", the industry's players want to show a certain optimism despite a context that remains complicated for the sector. A look by Benoist Guillard, president of the Groupe romand pour l’énergie éolienne (GREE).
"To reach carbon neutrality by 2050, it would be necessary to add each year the equivalent of the Grande-Dixence's production, namely 2.3 billion kilowatt-hours," calculates Dominique Rochat, Energy & Infrastructure Project Manager at Economiesuisse.
It’s back with a vengeance! Yet the path seemed clear after approval by the Swiss people of the new Electricity Act and the “net zero emissions” target by 2050. Nuclear power plants were to be phased out, renewable energies take over and better energy efficiency would facilitate this transition. But the 2022 energy crisis reshuffled the cards, revealing the fragilities of our system.
Added to that is the arrival of the “Blackout” initiative, which aims to lift the ban on nuclear power plants. That was all it took to ignite the debates again, where the different energy camps vie to demonstrate how “their” solution is the best. But before committing to one, the other or all of them, we should take the measure of the major task that awaits us and set priorities. And the least one can say is that we are still far from that.
A Grande-Dixence per year
Let’s be more concrete. The law sets a renewable production target for 2035. To reach it, we would need to add each year the equivalent of the Grande-Dixence’s production, i.e. 2.3 billion kilowatt-hours. Yet we are far from that! Between 2022 and 2023, according to the data from the latest federal monitoring, the increase was only 0.78 billion kilowatt-hours, and the average of previous years was even much lower.
While the development of hydropower production comes closer to the target, the next steps involve the construction of new installations, already contested, despite commitments made by some environmental protection organizations.
Conclusion: a serious acceleration is needed if we want to keep up the desired pace. This notably requires an effective simplification of authorization procedures, because we can no longer wait 20 years to start the slightest project.
Electricity follows rhythms, like a piece of music. In Switzerland, these rhythms translate into a production surplus in summer and frequent deficits in winter, compensated by imports.
Doubling current production without nuclear
But by the way, why produce more? The most obvious reason is to compensate for the production that will disappear with the gradual shutdown of Swiss nuclear power plants. Whether one likes them or not, they still supply about one third of our electricity. They play a particularly crucial role in winter, a period when Switzerland chronically lacks electricity.
The other reason is the foreseeable rise in consumption. The guiding star of Swiss energy policy is indeed decarbonization, dictated by the “net zero emissions” target by 2050. Decarbonizing means abandoning fossil fuels in favor of electricity, whether for heating, industry or mobility.
It is also about taking into account new realities, such as the proliferation of data centers, which have become essential to sate our digital appetites. To give an order of magnitude, consumption should increase by about one third, rising from 60 to 80–90 billion kilowatt-hours. In short, current production excluding nuclear will have to roughly double by 2050.
Diversify for more security
Producing more is good, but producing at the right time is better. Electricity follows rhythms, like a piece of music. In Switzerland, these rhythms translate into a production surplus in summer and frequent deficits in winter, compensated by imports.
Relying solely on photovoltaics would create an imbalance. The Swiss summer surplus would swell even more and the winter deficit would deepen. This scenario is already a reality in summer, where overproduction leads to negative electricity prices. Ideally, it would be possible to store the energy produced in summer for use in winter. However, no system currently allows this to be done at large scale and at a competitive cost.
At least two lessons can be drawn from Switzerland’s particular situation. The first is that priority should be given to the development of winter production, notably by directing more of the existing support toward that season. The second is the need to diversify production sources as much as possible in order to better adapt them to needs.
The photovoltaic/wind pair, for example, complement each other ideally. For it to work, one must still be able to build hundreds of wind turbines. If Austria has managed to install 1,400 on its territory, why shouldn’t Switzerland be able to do the same?
In these circumstances, Switzerland has every interest in keeping jokers, notably by reopening the debate on the use of nuclear energy.
Keeping jokers
Diversification also has the advantage of being a remedy to uncertainty, thus strengthening supply security. As the war between Russia and Ukraine has shown, Europe’s energy supply is far from a calm river. Moreover, we have observed that the implementation of the new Swiss energy policy is anything but guaranteed.
In these circumstances, Switzerland has every interest in keeping jokers, notably by reopening the debate on the use of nuclear power. What risk is there in doing so, knowing that in the end it will always be up to the people to decide? The war of the energy camps would not get us very far; a healthy dose of energy ecumenism would therefore be welcome in the years to come.
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What happens when insurance companies decide to withdraw and no longer cover the most at-risk areas? That is the theme at the heart of the new report by the environmental NGO, but also of "Sigma", that of the Swiss Re Institute. Analysis
"Flexibility solutions are now essential. However, they face a structural difficulty: their costs are decreasing faster than market rules evolve," explains Xavier Blot, associate professor at emlyon business school.
By naming their first edition "Wind farms are taking shape", the industry's players want to show a certain optimism despite a context that remains complicated for the sector. A look by Benoist Guillard, president of the Groupe romand pour l’énergie éolienne (GREE).
Since its founding in 2021, the young startup has made it its mission to find a good compromise between energy production and plant growth. The solution is called "spectral filtering".