18 October 2022

It’s impossible to avoid the headlines about the energy crisis. The rising cost of fossil fuels is turbocharging the cost-of-living crisis. While we’re preparing for a difficult winter, not every country is in the same boat.

Switzerland has avoided the soaring oil and gas prices that are crippling Europe – but how? The answer involves its hydropower capacity. The country is focusing on developing a clean, independent energy supply – echoing the aim of Green Switch Capital.

Switzerland is a world leader in green energy. 80% of all the country’s electricity originated from renewable energy sources in 2021. At Green Switch Capital, we’re looking across the water to see what we can learn from Switzerland’s success.

While our energy bills are reaching record highs, Switzerland has the lowest energy bills in Europe. We’re looking at Switzerland’s green energy programme and how it’s leading the way in creating a self-sufficient green energy supply.

Switzerland’s Electricity is 80% Renewables

Switzerland is a global leader in green energy. An estimated 80% of all electricity across Switzerland originated from renewable energy sources in 2021. This figure comes from sustainable growth that year, growing from 76% in 2020.

While Switzerland uses a mix of green energy sources, it relies heavily on hydropower plants. Almost 70% of Switzerland’s renewables come from hydropower plants, while solar and a combination of biomass and wind accounts for 11%.

Most of Switzerland’s recent green energy growth has come from “new” renewable energy sources – including smaller hydropower projects, biomass, sun, and wind. The proportion of these energy sources increased to 11.5% in 2021 from 10.3% in 2020.

The majority of Switzerland’s renewable energy is produced domestically, including almost 80% of new renewables and 76% of all hydropower. Switzerland saw a small reduction in electricity produced by its domestic nuclear power, dropping to 18.5% in 2021 from 19.9% in 2020.

The focus of Switzerland’s green strategy is energy security. Simonetta Sommaruga, Switzerland’s Energy Minister, wants the country to focus on expanding hydropower and developing solar power infrastructure. Sommaruga believes that a combination of solar power and hydropower is the ‘dream team’ and solution to Switzerland’s energy production.

The country is moving forward with its ‘Energy Strategy 2050’ ambition for an independent energy supply by 2050. It’s believed a green energy network is crucial for Switzerland to remain at the heart of Europe’s economy with its stable currency.

Switzerland’s Energy Minister has also pointed to Europe’s energy crisis as a driving force behind its plans to develop more storage and production capacity domestically. As the country doesn’t rely on Russian gas, it’s not experiencing the same economic impact of the war in Ukraine.

It’s no surprise that the country is moving forward with rolling out its renewable energy plans. The Swiss parliament recently passed legislation making it compulsory for new buildings to be constructed with solar panels. However, the energy minister admits that the various caveats mean 70% of new builds will be exempt. 

How Switzerland Has the Lowest Energy Bills

How has Switzerland avoided the cost-of-living crisis that’s unfolding across the UK and Europe? The country is more economically stable across the board. Its inflation sits at 3.3% compared to the average 10% inflation across the eurozone. Switzerland has avoided the energy crisis as only 15% of its total consumption is made up of gas.

The country has been moving towards an independent, green energy market since 2005. Switzerland’s electricity suppliers are legally required to disclose the composition and origin of the electricity they supply. 

Neighbouring countries have followed Switzerland’s lead, meaning that no electricity from an unknown source – nicknamed “grey electricity” – is allowed in the country.

Hydropower has been the backbone of Switzerland’s green energy production, enabling it to keep inflation considerably lower than its neighbouring countries. It accounts for an estimated 60% of Switzerland’s domestic electricity production. However, electricity is only around 25% of Switzerland’s energy sources with petroleum-based products being the largest source.

Biodiversity is a leading concern for Switzerland but the country remains committed to leveraging the benefits of renewables to protect its picturesque landscapes. Switzerland’s hydropower ability is strengthened by its Grand Dixence dam, which sits at 285-metres high and holds over 400 million cubic metres of water. The dam can supply electricity to around 400,000 houses per year.

The Future of Switzerland’s Renewables

While Switzerland is miles ahead of the UK in its renewables industry, it still has work to do. The government is actively taking steps to maintain and promote energy security in Switzerland. 

Winter is a major concern for the country with water-use rules being temporarily eased to boost hydropower plant capacity. The country is also releasing diesel, petrol, kerosene, and heating oil from its strategic reserves to strengthen its domestic energy supply.

It’s easy to think that Switzerland is number one in Europe’s green energy race. While renewables make up 25% of its total energy supply and put it ahead of France and Germany, the country is still behind Iceland and Norway with their green energy production. 

Switzerland’s long-term energy priorities include keeping its consumer energy prices low and ensuring the security of the domestic energy supply. The war in Ukraine has pulled the rug out from under countries that were overly reliant on Russian gas exports. 

While hydropower is Switzerland’s leading renewable, the country is planning to expand its wind and solar power, including double-sided solar panels to boost energy production. This expansion is vital to Switzerland’s strategy for maintaining Europe’s lowest energy prices. 

What the UK can learn from Switzerland

Solar and wind are amongst the cheapest green energy to produce, making them a vital component of tackling rising energy costs globally. The UK can learn lessons from Switzerland’s priorities as a country that focuses heavily on energy security and domestic production.

At Green Switch Capital, we have the same goals as Switzerland. Our ambition is to create a sustainable, self-reliant energy market powered by green energy to achieve net zero by 2050. You can find out more about our land leasing scheme and renewable projects by contacting our team today.