POUR L'OBTENTION DU GRADE DE DOCTEUR S SCIENCES

accepte sur proposition du jury:

Prof. M. Gruber, prsident du juryProf. M. Finger, Prof. H. B. Pttgen, directeurs de thse

Prof. R. Knneke, rapporteur A. Sapin, rapporteur

Prof. A. Schleiss, rapporteur

The Facilitation of Mini and Small Hydropower in Switzerland: Shaping the Institutional Framework

(with a Particular Focus on Storage and Pumped-Storage Schemes)

THSE NO 5356 (2012)

COLE POLYTECHNIQUE FDRALE DE LAUSANNE

PRSENTE LE 3 jUILLET 2012

AU COLLGE DU MANAGEMENT DE LA TECHNOLOGIECHAIRE LA POSTE EN MANAGEMENT DES INDUSTRIES DE RSEAUPROGRAMME DOCTORAL EN MANAGEMENT DE LA TECHNOLOGIE

Suisse2012

PAR

Nicolas CRETTENAND

i

Summary

The electricity sector in Switzerland is undergoing important changes following the liberalisation process and the

facilitation of renewable energy technologies. Furthermore, the phasing out of nuclear power will increase the

demand for new domestic electricity generation. According to the Federal Energy Strategy 2050, additional

generation will have to come from hydropower (currently 57% of Swiss electricity production), including small

hydropower (currently 6%, i.e. 3.8 TWh).

The small hydropower technology, with an installed capacity between 100 kW and 10 MW (whereby 100 kW till 1

MW is considered to be mini hydropower), is a renewable energy technology (RET) which is well developed.

However, the technology still requires further innovation to improve its environmental integration and reduce

costs. Small hydropower (SHP) provides electricity with a high energy payback ratio and, generally, with lower

production costs than other RETs, aside from large hydropower. SHP can be combined within multipurpose

infrastructures such as drinking water and irrigation networks. The institutional framework of SHP is conditioned

by multi-level (i.e., Federal, Cantonal and Communal) and cross-sectorial institutions (e.g., within the electricity

and water sectors, spatial planning). SHP still has significant potential in Switzerland with the possibility of

increasing the production of 2010 by 40-50% by 2050. However, SHP requires appropriate policy instruments for

its development within a liberalised electricity market as it is, on average, not yet cost-competitive. In 2009, for

example, a Federal feed-in remuneration scheme was introduced. To further develop the SHP potential, the

institutional framework has still to evolve.

This research was aimed at identifying changes in the institutional framework in Switzerland which can contribute

towards developing SHP and increasing the alignment between the technology and its institutions. To this end,

the literature on co-evolution and the framework of coherence between institutions and technologies in the case of

network industries, such as electricity, were used for the analysis. This thesis contributes towards further

development of the coherence framework.

Policy instruments are identified that can support the development of SHP. Measures to simplify and harmonise

administrative procedures are evaluated, even though their implementation remains difficult. A promising

endeavour, however, is to reduce opposition, thus duration of procedures, by developing regional master plans

and/or multi-criteria evaluations of projects at the very early project development phase. This enables the pursuit

of projects for which all stakeholders are favourable to their realisation. Another required measure is guaranteeing

the technical quality of plants which receive the feed-in remuneration by introducing a global efficiency criterion.

Finally, other policy instruments are analysed such as green certificates, the feed-in remuneration scheme, and

CO2 credits, which will become necessary following the opening of new gas-fired plants.

The current institutional facilitation of RETs generating electricity focuses solely on quantity, i.e. kWh. It does not

consider the need for flexible production and energy storage to deal with the intermittent generation of some

RETs and to align the electricity demand and supply. This is not coherent. The institutional facilitation should take

into account flexible production and energy storage, and thus specifically support technologies such as storage

and pumped-storage SHP. This research investigated, using an explorative and bottom-up approach, the

technical potential of small storage and pumped-storage plants by focusing on existing and planned reservoirs in

order to reduce investment costs and environmental opposition. Eleven projects were identified in the Canton of

Summary

ii

Valais. The potential in Switzerland is evaluated at roughly 200-300 MW for storage SHP plants (today 106 MW is

used) and 70-150 MW for pumped-storage SHP plants (today 15 MW is used). In order to further develop this

potential, which is complementary to the large storage and pumped-storage hydropower potential, some

remuneration instruments are identified. The instruments include adapting the feed-in remuneration scheme to

facilitate not only run-of-river plants, introducing requirements for ancillary services from RETs (in addition to large

hydropower), and CO2 credits and green certificates depending on the production profile (e.g., peak and off-peak).

The identified instruments lead to policy recommendations which would further facilitate the development of SHP

in Switzerland, including storage and pumped-storage plants. In summary, the main findings of this research are

four-fold:

The institutional framework has to further evolve to be aligned with the small hydropower technology.

The institutional facilitation of renewable energy technologies must not only focus on the quantity of

energy, i.e. kWh, but also on the quality, such as flexible production and energy storage.

Storage and pumped-storage small hydropower could play an important role in producing distributed

peak and balancing electricity and in contributing to distributed energy storage. Its technical potential in

Switzerland is significant enough to shape the institutional framework adequately.

The coherence framework offers a very useful lens to analyse technological and institutional changes in

the network industries. However, it still needs to be improved to become more robust and less

conceptual.

Keywords: mini and small hydropower, institutional framework, policy instruments, storage and pumped-storage,

electricity sector, co-evolution and coherence, Switzerland

iii

Rsum

Le secteur de l'lectricit en Suisse est soumis des changements importants suite au processus de la

libralisation et la promotion des nergies renouvelables. En outre, la sortie progressive de l'nergie nuclaire

va augmenter la demande pour une nouvelle production d'lectricit domestique. Selon la Stratgie nergtique

2050 du Conseil Fdral, une part de la production supplmentaire devra provenir des centrales hydrauliques

(actuellement 57% de la production suisse d'lectricit), y compris des petites centrales hydrauliques

(actuellement 6%, soit 3.8 TWh).

Les petites centrales hydrauliques (PCH), d'une capacit installe comprise entre 100 kW et 10 MW (100 kW 1

MW tant considr comme mini hydraulique), utilisent une technologie d'nergie renouvelable qui est bien

dveloppe. Cependant, la technologie ncessite encore davantage d'innovation pour amliorer son intgration

dans lenvironnement et pour rduire des cots. Les PCH produisent avec un ratio defficience nergtique

leve et, gnralement, avec des prix de revient infrieurs ceux des autres centrales fonctionnant avec des

sources dnergie renouvelable, hormis la grande hydraulique. Les PCH peuvent tre intgres au sein

dinfrastructures buts multiples telles que dans des rseaux d'eau potable et d'irrigation. Le cadre institutionnel

affectant les PCH est conditionn par les diffrents niveaux administratifs (c.--d. fdral, cantonal et communal)

et par des institutions de plusieurs domaines (par exemple, du secteur de l'lectricit, des domaines de l'eau et

de lamnagement du territoire). Les PCH ont encore un potentiel important en Suisse avec la possibilit

d'augmenter la production de 2010 de 40-50% d'ici 2050. Toutefois, les PCH ncessitent en gnral des

instruments institutionnels appropris pour leur dveloppement au sein du march libralis de l'lectricit. Ceci

vient du fait que les PCH, en gnral, ne produisent pas encore un prix comptitif. En 2009 par exemple, une

rtribution prix cotant (RPC) a t introduite. Pour dvelopper davantage le potentiel des PCH, le cadre

institutionnel doit encore voluer.

Cette recherche visait identifier des changements du cadre institutionnel en Suisse qui peuvent contribuer au

dveloppement des PCH et augmenter l'alignement entre la technologie et ses institutions. A cette fin, la

littrature de la covolution et le cadre de la cohrence entre les institutions et les technologies dans le cas des

industries de rseau, comme l'lectricit, a t utilise pour l'analyse. La thse contribue au dveloppement du

cadre de la cohrence.

Des instruments institutionnels, qui peuvent soutenir le dveloppement des PCH, sont identifis. Des mesures

visant simplifier et harmoniser les procdures administratives sont values, mme si leur mise en uvre

reste difficile. Cependant, une option promet