Switzerland’s energy supply is dominated by imported fuels

Currently, Switzerland obtains a large proportion of its energy from abroad, primarily in the forms of crude oil, natural gas, petroleum products and nuclear material. Fossil and nuclear fuels accounted for approximately 75% of Switzerland’s total gross energy consumption. Renewables (hydropower and the “new” renewables biomass, wind, and solar) as well as waste cover the remaining 25% (BFE, 2023).

Switzerland uses oil products mainly in the mobility sector and in heating. The majority of gas is used for heating and industrial energy needs. Nuclear power is used to produce electricity. Electric power can provide energy for mobility, home heating and industrial processes. While the overall energy consumption trend is slightly declining, the general fuel mix has remained rather stable for the last decades with new renewables slowly gaining momentum in recent years (Figure 1).

Switzerland’s electricity supply is a mix of domestic production and trade

Switzerland supplies electricity with domestic hydropower, nuclear, renewables, and some thermal production., while engaging electricity trade with the European neighbors. The majority of the Swiss electricity demand is covered by domestic hydropower facilities, consisting of run-of-river, reservoir and pumped-storage stations. In 2022, hydropower produced ca. 53% of the total electricity supply while the three Swiss nuclear power stations—Beznau, Gösgen and Leibstadt—produced approximately 36% (BFE, 2023). The Swiss population voted in 2017 to ban the installation of new nuclear power plants (Energiegesetz, 2017). While the existing nuclear stations may operate as long as they are deemed safe (Kernenergiegesetz, 2003) and economically viable, a complete shut-down is likely in the 2040s (approx. 60 year life time). Renewable production from solar photovoltaic units has increased in recent years covering about 6% of total electricity demand in 2022, while other renewables, including biogas, biomass, and wind provided about 1%. Thermal generation accounts for 3% of production, the majority of which comes from waste (BFE, 2023).

Besides domestic generation, cross-border electricity trade plays a crucial role in the Swiss electricity system. As the grids in the EU and Switzerland are physically connected, there is a constant flow of electricity between the countries. In summer, due to high run-of-river hydropower generation, Switzerland’s total electricity production usually exceeds its demand, enabling Switzerland to export to its European neighbors. Conversely, during the winter months, Switzerland’s hydropower production diminishes, necessitating more imports (Figure 2). Over the course of a year, Switzerland typically maintains a balanced position, with the quantities of electricity imported and exported being roughly equivalent.

There are a number of feasible configurations and different paths to achieve a net-zero energy system. These options share however two common denominators: 1) today’s fossil fuel imports need to be replaced and 2) the energy system needs to serve a new demand structure. To identify and compare different options, researchers use a variety of models (e.g., The SWEET Consortia). These models have different underlying structures, assumptions, and modeling choices, which highlights the robustness of commonly observed results. In addition, by examining common scenarios with a set of different models (e.g., SWEET-CROSS Scenarios, SWEET EDGE Renewable Outlook), researchers can evaluate uncertain future conditions, including climate regulations, European market integration, or technology development.

‘Net-Zero’ means ‘zero’ greenhouse gas emissions for most sectors, especially the energy sector

Taking an economy-wide approach to achieving the net-zero target means that we have flexibility in how we cut our emissions. While for the energy sector net-zero means full decarbonization, there are some sectors of the economy for which cutting emissions is extremely difficult. Consider the Swiss agricultural sector where cows emit a significant amount of greenhouse gases (1.68 Mio t CO₂ equivalent or 56% of all agricultural emissions, Agroscope, 2024; for comparison: total Swiss emissions are about 41.6 Mio t CO₂ equivalent with the agricultural sector being responsible for about 15.5%, see Switzerland’s greenhouse gas inventory). These emissions are hard to abate unless we stop keeping cattle livestock. In other sectors, there is the potential to achieve what is known as ‘negative emissions,’ effectively removing more greenhouse gases from the atmosphere than we emit. This allows to compensate the hard-to-abate emissions. The energy sector can provide such negative emissions (if for example emissions of wood-fired power plants are captured and stored).

Electricity consumption increases, energy consumption decreases

While the current Swiss electricity system is almost entirely CO₂-emissions free, the energy system is not. To decarbonize the rest of the energy system, Switzerland will need to electrify more sectors of the economy, notably mobility and heating. Due to the increase in electricity demand from these sector, overall electricity demand is expected to rise.  While there is some variability in how much (e.g. the different models in the SWEET CROSS comparison assume and increase from currently about 60 TWh (BFE, 2023) to 75-95 TWh by 2050, SWEET-CROSS, 2023) there is quite broad agreement that there will be a significant increase. Therefore, plans are to increase electricity generation capacity to accommodate this additional demand and to replace retiring nuclear capacity, all using CO₂-emission free technologies: solar PV, hydropower, wind, biomass and waste (with carbon capture and storage), hydrogen and synthetic fuels. Consequently, much of the current policy debate focuses on electricity supply.

At the same time, the overall energy demand is expected to decline (e.g., the Swiss Energy Perspectives 2050+ assume a decline from about 210-224 TWh per year today to about 140-168 TWh in 2050, Figure 3). This is due to efficiency gained by electrifying the currently fossil-based heating and mobility as well as further energy efficiency and conservation improvements.

Future fuel trade may take place in the form of synthetic fuels and hydrogen

For seasonal energy storage or industries that are very hard to decarbonize, synthetic fuels and hydrogen may play an important role in the future. However, the future market dynamics and demand for synthetic fuels and hydrogen in Switzerland remain highly uncertain. Should domestic production of these fuels prove cost-effective and demand sufficient, Switzerland is likely to both produce and consume them locally. Conversely, if it becomes more economical to import synthetic fuels and hydrogen, Switzerland will likely rely on imports to satisfy its demand.

Given the strategy of decarbonization through electrification, the electricity sector takes the center stage in the envisioned energy transition. In addition to the net-zero target of 2050 the Swiss government has also set renewable energy production targets for 2035. Based on these targets, researchers use models to find the mix of technologies, such as heating systems, batteries, and electricity generation facilities that minimizes the cost of achieving the given targets (e.g., SWEET-CROSS, BFE EP2050+, SWEET-EDGE, VSE Energiezukunft 2050 scenarios). These models have different underlying structures, assumptions, and modeling choices. Nevertheless, comparing the results of those models running similar scenarios provide robust insights that we explain in the following sections.

You can find different model scenarios on our link page.

Hydropower and PV will form the backbone

Hydropower and solar PV are the dominant technologies in our future electricity system (Figure 4). The currently installed hydropower capacities are maintained in all model scenarios; some even assume a further extension (i.e., there are 16 hydropower expansion projects that, taken together, would increase winter electricity production by a target of 2 TWh (i.e., see information on renewable extension projects by the VSE). Although the relative share of hydropower is expected to decrease as overall electricity demand increases, the absolute output from our hydro stations will remain similar to today. Furthermore, hydro will continue to be the central backbone of Switzerland’s future electricity system. PV is expected to significantly increase in the coming years and become the second pillar of the Swiss electricity system (i.e., SWEET-CROSS, 2023 and 2024, Trutnevyte et al. 2024). There are a few further possible technologies—depending on cost and social acceptance assumptions—that will play a lesser, more complementary role in the PV and hydropower dominated system: wind power and thermal generators (i.e., wood, waste, biogas, or hydrogen).

These results still leave a lot of freedom in terms of where the solar PV is placed (i.e., based on solar irradiance and incentives and restrictions set by policies, i.e. also see Trutnevyte et al. 2024). They also vary in the extent to which we rely on the complementary options. Still, a mix of technologies is robustly favored across all envisioned future conditions.

Cross-border electricity flows and trade will remain integral to our system

The Swiss electricity grid is physically linked to the European grid. Unlike trading goods that are discrete or packaged, flow of electrons is governed by the laws of physics and always flows across borders. Switzerland benefits greatly from this physical interconnection because it automatically has access to the European market for importing as well as exporting electricity.

For Switzerland, electricity trade is an important source of flexibility complementing our hydropower flexibility (Link to Block II). Electricity trade will remain important into 2050 and beyond, particularly because of the increasing share of intermittent renewables to compensate for daily, weekly and seasonal volatility (e.g. see Weigt, 2022, SWEET-CROSS, 2023 and 2024, Trutnevyte et al. 2024). With Western European countries committing to transition to CO₂-free electricitysystems, it is expected that electricity imports are CO₂-free as well. Many model scenarios assume balanced trade in 2050 (i.e., a similar quantity of imports and exports averaged over the entire year), similar to today (BFE, 2023). A full autarky, meaning a fully balanced production and demand setting with no import or export in any hour of the year would require a significant and costly additional increase in domestic production and storage capacities (SCNAT, 2022).

The transition towards a net-zero Swiss energy system requires decarbonizing overall energy supply and expanding our current electricity system. The purpose of the Swiss energy transition is to develop an energy system considering three objectives: decarbonization, social acceptance, and economic feasibility. It is however important to note that the costs of an emissions-free system should be compared with the true cost of our current system which includes external costs associated with emitting CO₂ and other pollutants, noise, and impacts on landscape and biodiversity. It is also important to keep in mind that even without any change in our energy system, we would still need to maintain and finance the existing system and fuel imports.

Future cost developments are uncertain

Costs are a central input for the different model and scenario assessments. However, there is no general agreement among researchers about ‘correct’ future cost assumptions, and model assumptions span a large range. This range reflects the fact that future cost developments are hard to forecast. For instance, the significant cost reductions achieved in solar PV over the past decade were not anticipated ten years ago. Similarly, the costs for other new renewable technologies have declined at an unanticipated rate (see Figure 5). This uncertainty concerns not only renewables but basically all other related technologies, such as battery costs, developments in electric mobility, electrolysers, synthetic fuel imports, and other input factors. Overall, it remains unclear how much cheaper technologies will become in the coming decades.

There is more to consider than just total system costs

Another important aspect is that total system costs (i.e., investment and operation costs) do not fully include other important cost aspects, like external costs, welfare effects or the distribution of costs among citizens. Reducing fossil fuel use comes with secondary benefits such as health improvements due to reduced air pollution, and it contributes to mitigating climate change. While no energy technology is without external cost, they are significantly lower for electricity generated from renewable sources. Thus, the further electrification of the energy system will reduce external costs. Economic welfare – a measure for the overall well-being of a society – is affected by more than just total system cost (Maire et al. 2019) including aspects like consumption opportunities, leisure or the impact of market and policy efficiency. Swiss welfare is thus also affected by the way prices are set in wholesale and consumer markets, and it is influenced by the share of value added that is accomplished in Switzerland. Energy policies have an impact on all these factors. Cost distribution is of course also of great concern. In line with the user-pays-principle, energy users can be expected to bear most of the cost associated with the energy transition, but a more precise answer depends on the way of financing, and the exact cost split between energy users and taxpayers is yet unknown. Also, the altered structure of our energy system will open opportunities for new actors (i.e., local PV and battery owners offering flexibility to the system) and close it for others (i.e., fossil fuel providers will need to reorient or disappear).