The facilitation of small hydropower in Switzerland: shaping the institutional framework

The paper aims to contribute towards further shaping of the institutional framework in Switzerland in order to facilitate the development of small hydropower (<10MW). The context of the research is the current liberalisation process of the electricity sector, the forthcoming electricity gap and the government’s aim to increase the weight of renewable energy sources (RES), as well as post-Kyoto regulation. Small hydropower (SHP) has, generally, a higher energy ratio and lower production costs than other RES, and should therefore be further facilitated. In addition, decentralised and small-scale pump-storage schemes can contribute to further integrated stochastic RES production and the regulation of the grid. In 2008, SHP produced 5.4 % of the Swiss electricity production. The potential is only partially tapped and current estimates show that the use of this potential could be increased by 60-100 %. The technology is well developed and several mechanisms within the institutional framework already exist to facilitate SHP (e.g. newly introduced feed-in tariffs scheme) although further evolution of the institutional side is needed. Based on the literature of co-evolution between technologies and institutions, and based on the coherence framework, ideas are developed of how to improve the institutional framework. Firstly, the dynamics of the electricity sector have to be considered such as the trend of decentralisation and the need of additional storage capacities to absorb within the infrastructure the stochastic electricity production. Climate policies influence the electricity sector as well and more coherence between energy and climate policies is needed. Secondly, the application of the coherence framework to the SHP case shows that institutions have to be coherent in size and scope with the technology. More standardisation is required to reduce transaction costs. On the technical side, standards could contribute to a technical standardisation of SHP thus improving the quality of the implementation of the technology. This is necessary as with the liberalisation new actors have entered the market without always having all the needed competencies. Furthermore, the idea of including pump-storage power plants below 10 MW within the institutional framework which facilitates SHP is developed. The deployment of such plants could be boosted within multipurpose infrastructure and the rehabilitation of existing plants. It is therefore mainly the institutions which have to further evolve to be better aligned with the well developed SHP technology, and which have to include new ideas such as SHP pump-storage schemes. This will lead to further deploy RES and contribute to climate change mitigation.