Following our 2017 study for the Swiss Federal Office of Energy (SFOE), Frontier, together with the engineering consultancy Consentec, have developed a further report examining detailed design options of a strategic reserve for Switzerland.
In this new study, we evaluated five possible models of a strategic reserve against a set of criteria such as effectiveness, costs, complexity and compatibility with EU state aid law.
The study highlights that the choice of a suitable model highly depends on which criteria is politically most important. If , for example, the political aim is to secure water supply in the event of a potential water shortage due to a late snow melt at the lowest possible costs, holding a reserve of hydroelectric power would be the best option. If, however, the aim is to create a simple instrument that also increases available generation capacity, a reserve tailored for new power plants is favourable. If conformity with EU law is most important, a reserve should be technologically-neutral and flexible electricity consumers should be eligible to participate.
Frontier regularly advises public and private clients on market design and energy turnaround issues.
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