Switzerland Sets Up Hydro-Power Reserve to Avoid Blackouts

(Bloomberg) --

Switzerland will ask hydroelectric-dam operators to create power reserves and may build new gas-fired plants for use during peak demand surges to avoid blackouts.

The Swiss Federal Council said the new hydro-power reserves will go online next year. Operators will be paid to retain a certain amount of energy to be used during shortages.

Power grids across Europe have faced shortfalls this winter amid low supplies of gas from Russia and other producers that has caused prices to surge. The Swiss government has warned of potential blackouts from 2025 as it shutters nuclear power plants after Swiss citizens voted to phase out their use.

With a vast network of Alpine hydroelectric-power stations, Switzerland is largely power independent but needs to import electricity during winter months.

The government said it would also begin accepting tenders for the construction of two or three gas-fired power stations, with total power of as much as 1,000 megawatts intended to supplement the hydroelectric reserve. 

The cost of these new plants would be no more than 700 million Swiss francs ($759 million) to 900 million Swiss francs, the Federal Council said.

The two reserves should “only be used in exceptional circumstances, when the electricity market is temporarily unable to meet demand,” the Federal Council said in a statement, adding that the proposed power reserves “must not distort the market.”

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