Swiss to create hydropower reserve to ensure winter power supply

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ZURICH (Reuters) – Switzerland will create a hydropower reserve to make sure the Alpine country has enough electricity through the coming winter, the government said on Wednesday.

The government said the power supply was currently assured, but interruptions in gas supplies in Europe linked to the war in Ukraine as well as security checks at nuclear power plants in France meant supply could be uncertain this winter.

“The (hydropower) reserve will help strengthen Switzerland’s energy supply for the critical phase towards the end of winter,” the government said in a statement, adding the reserve could be used to generate electricity if needed.

Operators of power plants can submit their bids to Swissgrid from October, the government said, describing the hydropower reserve as an insurance policy to bridge critical bottlenecks of up to a few weeks if needed.

The costs for a hydropower reserve of 500 GWh for the winter are roughly estimated at 650-750 million Swiss francs ($659.50-760.96 million), the government said. This would add around 1.2 centimes per KWh to consumers’ electricity bills.

Switzerland’s national energy watchdog said on Tuesday Swiss power bills for households were set to rise by around 27% in 2023.

“A second important safeguard are reserve power plants that can be operated with gas, oil or hydrogen,” the government said, adding it had signed such a contract last week with GE Gas Power.

The government said Swiss water reservoirs were just below the long-term average level and gas flows to Switzerland were normal. A worsening of the situation in the gas market could create difficulties for power companies as both markets are closely linked, it said.

On Tuesday, Swiss energy group Axpo Holding got an emergency 4 billion Swiss franc credit line from the government to secure its liquidity requirements.

($1 = 0.9856 Swiss francs)

(Reporting by Silke Koltrowitz; Editing by Bernadette Baum)