Electricity markets in Europe are in a state of transition. With increasing shares of electricity being generated by renewable energy sources, considerations are underway to complement the traditional electricity market design of energy-only markets with capacity mechanisms. In this context, France, Italy and the UK have already introduced a capacity mechanism. In Germany, the current reserve capacity regulation (“Reservekraftwerksverordnung”) is due to expire in 2017 when a new market design will be introduced. Switzerland currently does not consider introducing a capacity mechanism. However, as electricity is traded actively between Switzerland and its neighbouring countries, it is affected by the introduction of capacity markets in other European jurisdictions.
Implications of capacity mechanisms for Switzerland
The Energy Policy Analysis Group organised a workshop on Wednesday, 21 January 2015 at the ZHAW School of Management and Law, which brought together experts from various disciplines and relevant institutions (e.g. ETH, University of Basel, Federal Office of Energy, Federal Electricity Commission, Swissgrid, Swisselectric, ewz, Avenir Suisse, Öko-Institut e.V.). The goal was to outline the current state of research, formulate relevant research questions and identify gaps that should be addressed in future research. In particular, participants agreed that it would be important to analyse the implications of capacity mechanisms in neighbouring countries for Switzerland – both regarding the cross-border participation of Swiss power stations as well as the impact on Swiss producers and consumers via the change in wholesale prices of electricity. Further research on these questions will be presented and discussed at the Symposium on Electricity Markets with a High Share of Renewables on 29 May 2015: www.zhaw.ch/zow/electricity-markets.
The Energy Policy Analysis Group (EPAG) is an interdisciplinary group of researchers and part of the Swiss Competence Centre for Research in Energy, Society and Transition (SCCER-CREST). It investigates economic and regulatory issues related to energy on the national and international level. The focus is on the design of policies to enhance renewable energy uptake, the reduction of greenhouse gases, and efficient energy use.