The older Swiss nuclear plants are approaching the end of their design lifetimes and supplycontracts with France are reaching the end of their terms, which means that Switzerland’s security of supply is increasingly at risk. Thanks to its excellent reliability, the Swiss power supply system has enjoyed a good reputationfor many decades, with an average availability of electricity of 99,99%. It is essential for an advancedsociety with a flourishing economy to have constant access to a reliable power supply at competitiveprices. If this cannot be guaranteed, Switzerland will suffer directly as a preferred business location. However, as early as 2012, Switzerland may face an energy shortfall. Later, electricity importcontracts with France begin to expire from 2018 and, from 2020, the Beznau and Muhleberg plants willbe closed. At the same time, electricity consumption in the country is rising steadily. A study carried out by the Axpo Group, Stromperspektiven 2020 (“Electricity Perspectives Study2020”), analyses the potential electricity supply shortfall that the country faces, and explores the optionsavailable to ensure future security of supply. Axpo, which is wholly-owned by the cantons of northeasternSwitzerland, comprises Nordostschweizerischen Kraftwerke AG (NOK), Central-schweizerischeKraftwerke AG (CKW) and operates a fleet of hydro, nuclear and renewable power plants. Security sufficient supply Achieving security of supply essentially requires four elements: - Primary energy sources for electricity generation, - Producing capacities, - Grids, - System management. Security of supply is assured if the first three elements are available in sufficient quantity to meetdemand and the system management structure is capable of deploying production facilities and gridsaccording to consumer requirements. As in a chain, the weakest link defines the degree of security ofsupply, irrespective of the strength of the other links in the chain. The following basic principles apply forincreasing security of supply: - The more diversified the primary energy sources and production options, the lower the absolute dependence on one opinion and the higher the security of supply, - The closer the production facilities are to the consumption centers, the higher the security of supply, - The greater the redundancies for all four elements, the higher the security of supply, - The lower the effect of a particular power plant or transmission line on the whole supply region, the higher the security of supply, Switzerland is closely integrated into the European electricity network. This has the advantagethat additional backup capacity is available from Europe in the event of short-term supply bottleneckscaused by failure of a large and/or several medium-sized power plants. According to a clearly definedprocedure, Switzerland is obliged, once such emergency situations have passed, to again providesufficient energy from its own resources in order to free up the short-term backup capacity for Europe.Just as Switzerland benefits from Europe‟s production portfolio, Europe can utilize Switzerland‟sproduction portfolio as backup. This mutual assistance only functions if adequate electricity supplies andassociated backup capacity are available for regular internal consumption on the short, medium and long-term.
Demand and supply Demand development Electricity consumption in Switzerland has more than double over the last 35 years. Onaverage, a 1% increase in gross domestic product (GDP) results in a 1.8% increase in electricityconsumption. While this trend is weakening, it is not expected to reverse. To put this analysis into perspective, it should be borne in mind that, from 1970, manyenergy-intensive companies gave up production in Switzerland for cost reasons. Without thisdevelopment, the increase in electricity consumption during this period would have been evenhigher. Growth over recent years has been based on the service sector, which is associated withongoing computerization, increasing electrification in private households and an increase inpopulation. While electrical devices are becoming more efficient and therefore more economical,the number of electrical applications is increasing. Several studies predict that total energyconsumption (electricity, gas, oil, fuels, heat) in Switzerland will either remain stable or, at best,will decrease slightly over the coming years. The situation for electricity consumption issomewhat different. In 2005 electricity consumption increased by 2,1%; in 2006 the increase was0,8%, despite the very warm winter. In order to predict future electricity demand, different scenarios were defined forcalculation purposes. Based on the “high” demand scenario, consumption would increase by 2%every year until 2010 (in line with the current growth rate), followed by 1,5% until 2030 andthen 1% until 2050. Based on the “low” demand scenario, the annual increase the consumptionwould be 1% until 2010 and 0,5% until 2050. Axpo assumes that actual electricity consumptionwill be somewhere between “high” and “low” scenarios. In addition to GDP growth, furtherdrivers of electricity consumption that should not be underestimated in the long run are primaryenergy prices and, as a result, energy efficiency. The higher and more sustained the increases inprices for primary energy sources such as oil and gas, the more use there will be of energy-efficient systems. I many cases this leads to substitution effects, with an associated increase inelectricity consumption. For example, oil-based heating systems are increasingly being replaced with electric heatpumps offering the same level of thermal comfort. Advanced systems can reduce energyconsumption by around 75%. With 25% electricity and 75% free ambient heat, they produce100% heating energy and also lead to substantial reductions in carbon dioxide emissions. Today,new buildings are often constructed based on the Minergie or Minergy-P standard. They usesignificantly less heating energy thanks to better insulation and also offer good protection fromheat in summer. They actively utilize waste heat and, for this, require ventilation systems andcontrollers that, in turn, are operated with electricity. These two examples clearly illustrate thatsubstitution effects allow significant improvements in energy efficiency, but that these measuresresult in increased electricity consumptions. Electricity is a key energy and is central to a widerange of efficiency measures. Electricity thus enables energy efficiency. [+5800]
Existing production capacities In 2006, net electricity generation in Switzerland amounted to 59,4TWh. In the same yeartotal consumption reached 62,1TWh mean that 2,7TWh or 4,7% had to be imported during theyear. In the medium and long term, production capacities will decrease and total consumptionwill increase further. The nuclear power plants Beznau 1&2 and Muhleberg are expected to bedecommissioned from 2020. The Gosgen nuclear power plant is expected to produce electricityuntil 2038 and the Leibstadt nuclear power plant until 2043. In addition, supply contracts withnuclear power plants operated by EDF will be phased out from 2018. For hydropower, recentstudies indicate that production is expected to fall by around 7% by 2050 due to global warmingand an associated reduction in precipitation. As a result of these factors, the productioncapacities available in Switzerland will decrease significantly, particularly around 2020. Power supply shortfall For a reliable power supply in Switzerland, it is essential that sufficient electricity isavailable during the winter months. However, during the winter, electricity generation is lower due to reduced water flow inthe rivers, while consumption is higher. A comparison of the available production capacities withthe demand trend during the winter months indicates that Switzerland will experience a powersupply shortfall from 2012, depending on the rate of increasing in consumption. This conclusiontakes into account the supply contracts with nuclear power plants in France. Without thesecontracts, Switzerland would already have had an electricity deficit during the winter monthssince 2000. Since 2004, more electricity has been imported than exported (with an upwardtrend), with an associated increase in dependence on other countries. A further significant issue is the available capacity. Assuming that capacity demand willincrease in line with energy consumption, a capacity deficit is expected from 2012, depending ondevelopment of consumption. Analyses indicate that Switzerland generally has sufficient peakcapacity, but that it has very little intermediate load capacity and insufficient base load capacity. Switzerland‟s location is an important factor in terms of security of supply. Adequatepower supply can only be ensured if sufficient production capacities are available even underextreme conditions. This means that the situation must be manageable even during a long coldwinter spell with associated higher electricity consumption while, at the same time, production isreduced due to lover water levels in the rivers. Such cold spells are not limited to Switzerland,but simultaneously affect neighboring countries, meaning that the problem cannot be resolved byimporting. Calculations show that, under extreme conditions, Switzerland is already reaching itscapacity limits today, taking into account the long-term supply contracts with France. From around 2012, Switzerland will require new productions capacities in order to ensuresecurity of supply and to avoid increasing dependence on other countries. For extreme situations,Switzerland already has no reserve capacity today, which means has to be covered throwexpensive imports.
Basic options To cover the power supply shortfall, five basics options are available: - Energy efficiency, - New energies (ie renewable, not including large hydro), - Imports, - Decentralized energy supply systems, - Large-scale plants, Energy efficiency On average, energy efficiency is still far lower today than what is technically possible andcalls to address this issue in a consistent manner are intensifying. In its Energy Prospects 2035study, the federal government concluded that energy efficiency should be given high priority. Energy efficiency has been an issue of concern for some time, prompting the federalgovernment to initiate the Energy 2000 and, subsequently, Energy Switzerland programmes. Theseprograms achieved some success, but failed to reach their declared targets. One of the aims of EnergySwitzerland was to restrict the increase in electricity consumption between 2000 and 2010 to 5%.However, halfway through this period electricity consumption had already increased by 9,5%. There aretwo aspects that are often overlooked in the energy efficiency discussion. Firstly, energy efficiency oftenrequires substantial investment, meaning that investments in energy efficiency trend to be made onlyduring the normal reinvestment cycle. The reinvestment cycle for buildings is around 30 years. Thesecond point is that human habits need to change; this is often a very slow process. Energy efficiency is both sensible and feasible. Investments in energy efficiency measures areoften influenced by state regulations and subsidies and the key is to focus on implementing measures thatoffer a positive cost/benefit ratio. Politicians have to define the appropriate framework for ensuring thatmaximum energy efficiency is achieved with every Swiss Franc that is invested. New energies New energies are defined as all renewable except established large-scale hydropower. Theyinclude small-scale hydropower, biogas, solid biomass (wood), geothermal energy, wind power andphotovoltaic (PV). A study carried out by Axpo analyses the new energies potential for Switzerland under idealsconditions, together with the associated costs. Ideal conditions means that, for the assessment of technicalpotential, all sensible locations can be used, irrespective of countryside conversation and spatial planningaspects and costs. The study also assumed that unlimited funds are available. In terms of restrictions, theonly exception was PV, for which only existing infrastructure (roofs, facades, noise barriers) wasconsidered as potential locations for reasons of landscape conversation. New large-surface plants werenot included in the analysis. The analysis showed that the total potential for all new energies, excludinggeothermal energy, is around 20TWh per year, without taking a costs into account. The additionalpotential from geothermal energy is around 17TWh, but this is not yet technically secured. The technicalpotential can be estimated reliably only after the first pilot plant has been in operation in Switzerland forapproximately one year. [+5400]
Imports Basic on long-standing contracts, Switzerland has been importing electricity from the nuclearpower plant fleet operated by EDF for many years. New contracts of this type are doubtful against thebackground of market liberalization. From a present-day perspective, it can be expected that pure production contracts will still bepossible. However, according to European Union (EU) law, transmission of electricity produced abroadto Switzerland can no longer be guaranteed, because cross-border transmission lines must be madeavailable to all market participants without discrimination. Critical bottleneck situations can be expected,particularly during prolonged cold spells in winter. From a meteorological perspective, cold spells withtemperature of -10°C or below affect not only Switzerland, but also neighboring countries or eventhe whole of Western and Central Europe. Bottlenecks therefore occur not only at the Swissborders, but also at the borders of surrounding countries. Electricity imports are therefore notregarded as a reliable means of ensuring the security of domestic power supply. Added to this isthe fact that electricity demand is also increasing rapidly in neighboring countries. Decentralized energy supply There are two types of decentralized energy supply systems. New energy systems such assmall-scale hydropower, biogas or PV have already been mentioned. They are regarded asdecentralized if electricity generation and consumption are close together. In addition there arefossil-fuelled plants such as cogeneration plants, micro gas turbines and fuel cells. In thesesystems, the heat generated in the electricity production process is also utilized. In this way, avery high overall efficiency of around 90% or more can be achieved. The smaller the plant, thelower the electrical efficiency and the higher the proportion of heat generated. Cogeneration of combine heat and power (CHP) plants that use fossil fuels produceelectricity at a cost of €84-111/MWh, depending on the size of the plant. This includes a „heatbonus‟ of €33-39/MWh. Compared with the market price for electricity of around €42/MWh,CHP plants are therefore very expensive. Decentralized energy production plants have theadvantage that, based on current costing, they are not subject to grid changes. In the long term, fuel cells could potentially reach electrical efficiencies of 60%, iesimilar values to current large gas-fired combined cycle plants. Decentralized energy supplysystems are ideal in the winter, when the heat generated as a by-product can be used for heatingpurposes. During spring and autumn with low heat demand and summer with no heat demand,decentralized systems have a significant disadvantage in that their efficiency falls below 40%(electrical). This value is clearly lower than for large plants, even taking into accounttransmission losses. Future residential buildings will have increasingly better insulationstandards. This reduces their heat demand, making decentralized generation less attractive.
Large-scale plants Large plants include large-scale hydropower (above 10MWe capacity), gas-firedcombined cycle plants (also referred to as combined cycle gas turbine power plants, CCGT),coal-fired power plants using hard or brown coal and nuclear plants. In Switzerland, around 60% of total consumption is currently covered by large-scalehydropower. The options for further expansion are very limited as almost all suitable locationshave already used. The associated potential capacity increase in Switzerland is estimated to bearound 2000-2500 MWe, or just below 20% of the average available capacity. Nuclear power plants Besides hydropower, nuclear power is currently the only large-scale technology that isnot associated with carbon dioxide emissions and is therefore independent of the development ofcarbon costs. The reactors available on the market today are third generation reactors offeringimproved safety compared with their predecessors. They are highly competitive in terms ofproduction costs. Nuclear energy is characterized by low sensitivity to fluctuating fuel costs,because their proportion of total costs per kilowatt-hour produced is only 12%. The maindisadvantages of nuclear energy are lack of political acceptance for the construction andoperating of new nuclear power plants are the issue of management of the resulting radioactivewaste. Such waste has to be disposed of safely for time periods up to 100.000 years. This iswhere the fourth generation of NPP, which is currently under development, comes in. Thesereactors will use around ten times less nuclear fuel and will produce significantly less radioactivewaste. The majority of the waste will have to be stored for only 100 to 300 years. In addition,these reactors can re-use existing waste as fuel. This not only saves fuel, but also eliminateshighly active radioactive waste in a sensible manner. Fourth-generation nuclear power plantshave an inherent safety system that prevents radioactive material being released from the reactorin any situation, independent of the control system. However, this reactor generation is unlikelyto be commercially available before 2030 at the earliest. A cost comparison of the three large-scale options based on 2006 prices shows that,taking into account carbon dioxide costs, nuclear energy is far by a cheapest. Due to carboncosts, hard coal power stations are around 40% more expensive than NPP. The price ofelectricity from gas-fired combined cycle power plants is currently around €72-98/MWh, ietwice the price of nuclear energy. In 2002, the cost difference was still very low, because themassive increases in gas prices and today‟s carbon dioxide costs could not be predicted.
Switzerland’s option It can be concluded from the above discussion that there are no clear favorites for futureelectricity generation. Each technology has advantages and disadvantages, be it of an economics,environmental or social nature. For timing reasons, a new nuclear power plant will be unable to meet the power supplyshortfall expected during the winter months from 2012. This means that the focus will be on gas-fired combined cycle plants as an interim solution. However, under the current boundaryconditions, Axpo regards compensation of the carbon dioxide emissions generated throughoperation of the required number of gas-fired combined cycle plants in Switzerland as not beingfeasible. Based on risk consideration, Axpo will not rely on a single technology, but instead willaim for broad diversification. This means that, after gas-fired combined cycle power plants, theobjective should be to construct new nuclear power plants to replace existing ageing plants. A sustainable power supply for Switzerland can only be ensured with a balancedelectricity mix from new energies, hydropower, gas-fired combined cycle power plants andnuclear energy. The motto for the energy sector clearly has to be „as well as‟ and not „either/or‟.Citizens, industry and politicians should act as a matter of urgency to ensure that Switzerland cancontinue to rely in the future on a secure, competitive and environmentally friendly energysupply. [+6100]