Improvement of the competitiveness of Swiss hydroelectric power plants
In Switzerland 60% of electricity is produced by hydropower plants. In the past years, there has been intensive discussions about a new legal basis for the electricity sector which foresees a stepwise deregulation of the Swiss electricity market. These discussions have shown that an implementation of the law could have severe negative impacts on the Swiss hydropower plants. Considering the economic and ecological advantages of hydropower in comparison the other, non-renewable energy forms there is a political will to attempt to mitigate the negative impacts of market deregulation on Swiss hydropower production. The research pursues three main objectives:
- definition of the elements which determine the actual and future competitiveness of the sector: the focus will be put on the energy markets and prices;
- analysis of the cost structure of the hydropower plants: it is foreseen to apply the methodology of the "discounted cash flow" in order to estimate the competitiveness of the plants. In this context, the long term competitiveness will be measured as the capacity of the plants to operate re-investments in their plants;
- the analysis of the revenue side shows the potentials for an improvement of the competitiveness through (qualitative) product differentiation. The willingness to pay for ecological high-level electricity is higher than for "normal" electricity.
The findings of the previous parts of the study will be used for defining political measures able to improve the competitiveness of the hydropower plants.