The Energy Strategy 2050: objectives and measures Dr. Anne-Kathrin Faust and Dr. Aurelio Fetz, Market Regulation, Swiss Federal Office of Energy

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1 The Energy Strategy 2050: objectives and measures Dr. Anne-Kathrin Faust and Dr. Aurelio Fetz, Market Regulation, Swiss Federal Office of Energy Workshop Smart Grids and Dynamic Pricing, Opportunities for the Energy Transition

2 Why is Energy Strategy 2050 necessary? Supply security Prices and markets Climate change Infrastructure Environment, nature, landscape Population growth Energy Strategy 2050 Withdrawal from nuclear energy 2

3 Energy Strategy 2050: key elements (1/2) 1. No new nuclear power plants 2. Promotion of energy efficiency 3. Increased use of renewable energy Hydropower: TWh (+ pump storage for integration of new renewable energy forms) New renewable energy: exploitation of sustainably utilisable potentials (24.2 TWh) 4. Remaining demand to be met through: Fossil-fuelled electricity production (primarily gas and steam) Imports 3

4 Energy Strategy 2050: key elements (2/2) 5. Expansion of electricity networks Optimisation, renovation and expansion of transmission and distribution networks Reorientation in direction of smart grids 6. Intensified energy research 7. Federal government to act as role model 8. Strengthening of SwissEnergy programme 9. Intensification of international cooperation in the energy sector 4

5 Energy Strategy 2050: overview Energy Strategy 2050 Coordinated Energy Research action plan Phase 1 Phase 2 (from 2021) 2050 energy perspectives Initial package of measures Transition from promotion system to steering mechanism Parliamentary initiative Electricity networks strategy Negotiations with the EU on electricity agreement Second stage of market liberalisation Revision of Electricity Supply Act enacted 5

6 Effects of initial package of measures: end-energy use and electricity consumption, PJ 900 TWh EEV 45 % 208 PJ Elektrizitätsnachfrage Electricity demand 51 % 58 PJ (c) Prognos AG Vergangenheit Past WWB POM NEP Szenarien: Other abbreviations: WWB = Business as Usual EEV = end-energy consumption POM = Political Measures of the Federal Council NEP = New Energy Policy

7 Effects of initial package of measures: development of total energy consumption & energy mix 900 PJ TWh 250 Hydrogen Biogas as fuel 800 Gas as fuel Liquid biofuels Aviation fuels Diesel 600 Petrol Biogas, sewage gas Ambient heat Solar heat (Industrial) Waste 300 Wood District heat* Coal 100 (c) Prognos AG 2012 Gas Other oil products Heating oil products or fuels Electricity* 7

8 Effects of initial package of measures: development of electricity supply and demand TWh (c) Prognos bestehende Existing hydropower Wasserkraftwerke plants neue New Wasserkraftwerke hydropower plants bestehende Existing nuclear Kernkraftwerke power plants bestehende Existing fossil-fuelled fossile KWpower plants bestehende Existing purchase Bezugsrechte rights bestehende Existing renewable Erneuerbare* energy 10 neue New fossile fossil-fuelled WKK power plants neue New Erneuerbare* renewable energy neue New Kombikraftwerke cogeneration plants neue New Kernkraftwerke nuclear power plants neue New Importe imports Bruttonachfrage Gross demand *) gekoppelt coupled and und uncoupled ungekoppelt Electricity supply, Political Measures scenario, option C&E Hydrologisches Hydrological year Jahr 8

9 Flexibility is of growing importance for the future energy system New Energy Policy scenario, C&E option Electricity production from base load power plants and renewable energy, and electricity demand in June 2050, in MW Hydropower (run-of-river plants) Gas and steam, geothermal energy, waste incineration plants PV Cogeneration plants (combined heat and power) Electricity demand 9

10 Challenges on the electricity market For the integration of renewable energy, a future supply system calls for the following technologies: Storage technologies, in order to be able to store any supply surplus electricity and release it in the event of excess demand Flexible power plants, in order to be able to meet excess demand in the event of a production shortage Demand-side management, in order to be able to adapt demand behaviour to the supply situation Efficient operation and expansion of networks and development of smart grids for increased feed-in at the lower network level and in order to more purposefully link consumers and producers à Additional investments will be required for renovations à Efficiency increases will be necessary in order to avoid major price increases 10

11 Measures relating to energy efficiency: key elements Buildings Industry and services Mobility Electrical appliances Electricity suppliers Increase in CO 2 fee and strengthening of buildings programme Target agreements in accordance with Parliamentary Initiative More stringent CO 2 emission regulations Efficiency and consumption regulation Efficiency target for electricity suppliers Informative measure: More stringent model energy provisions of the cantons 11

12 Main measures relating to renewable energy Financial support Optimisation of feed-in remuneration system Explicit right of own use Support measures Spatial planning concept for development of renewable energy National interest for large-scale installations Organisational measures Transfer of enforcement from Swissgrid to SFOE Assets in network surcharge fund to federal government Guarantees for deep geothermal energy Fast licensing procedures in the cantons 12

13 Initial measures relating to electricity networks (1/2) Current situation: Increasing electricity consumption Inadequate and ageing transmission infrastructure Need for expansion and renewal of transmission and distribution networks Separate Electricity Networks Strategy as component of Energy Strategy 2050: Clarification of division of tasks Increased transparency in the area of network planning 13

14 Initial measures relating to electricity networks (2/2) 1. Faster procedures Specified deadlines for sectoral plan and planning approval procedures (time limits for overall procedures) Shortening of appeal procedures: Appeals to Federal Supreme Court only for legal issues of fundamental importance. à Right of appeal for associations remains intact. 2. Principles for introduction of smart metering Capital and operating costs of corresponding metering systems to be recoverable. Federal Council may now define criteria for the introduction of smart metering systems for end users and specify minimum requirements. 14

15 Time schedule B = Federal Council, VL = Consultation 15

16 Coordinated Energy Research action plan Focus of support in 4 main areas: 1. Increase in capacity for energy research (teams) 2. Development of the Swiss Competence Centres for Energy Research (SCCER) (Efficiency, Grids and their components, Storage, Power supply, Economy, environment, law, behavior, Mobility, Biomass) 3. Competitive funding for research projects (Commission for Technology and Innovation, CTI) 4. Promotional activities of the Swiss National Science Foundation (SNSF) (National Research Programmes, National Centres of Competence in Research, SNSF professorships) à Adopted by Parliament in spring

17 Socio-economic interdisciplinary research program Energy-Economy-Society (EWG) Efficient use of research budget (approx. 1.5 Mio CHF/a) Support of socio-economic studies - Applied research to develop new models and methods in energy economics - Policy-oriented research as a basis for regulation Individual, close project supervision Close coordination with other research programs and institutions Communication, discussion and networking events 17

18 Research concept Gain a better understanding of decision making processes of consumers and investors Propose solutions for the optimal integration of renewables Develop economic models for the analysis of future economic, social and political conditions and their impacts In 2014: Consumer behavior Electricity and gas market design Renewables, energy efficiency and security of supply 18

19 Examples of current projects ELECTRA (à 2015) Econability, PSI, EPFL Linkage of a model of the electricity sector with a dynamic applied general equilibrium model of the Swiss economy and a multi-regional applied general equilibrium model Develops a coupled techno-economic modeling framework for the analysis of energy and climate policies An Evaluation of the Impact of Energy Efficiency Policies on Residential Electricity Demand in Switzerland (à 2015) ETHZ Estimation of household electricity demand functions Impact of demand-side management programs and estimation of elasticities Investigating the influence of social comparisons, self-assessments and willingness to save on feedback effects (à 2014) ETHZ, UNIL Investigates the influence of information on water use for a sample of 700 households 19

20 Thank you for your attention! 20

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