Energy Shortages: Hydroelectric Dams and Winter Reserves
From 2022, dams were incentivized to store water during winter to counter potential energy shortages. However, an RTS investigation revealed that half of hydroelectric complexes did not participate in this “war effort.”
The winter hydroelectric reserve system has fallen short of expectations. While the government and politicians hope it will be effective, some hydroelectric companies question their obligation to contribute.
The RTS investigation revealed that half of the country’s hydroelectric complexes did not offer any water for reserve despite the transparent procedure and Federal Representative intervention. Notably, large producers offered little water during the first year when the risk of shortage was highest.
While these companies are often majority owned by public authorities, their participation in the reserve system is not purely altruistic. The compensation paid for storage is often higher than market rates, suggesting that dams are benefiting financially from the system.
The winter hydroelectric reserve has already cost electricity consumers 350 million euros, despite never being activated. This cost is reflected in electricity bills, contributing to the recent rise in energy prices.
The new electricity law, adopted in June 2024, mandates that all dams must retain water from the winter of 2025-2026 onwards. The price for this mandatory reserve is still under negotiation, with companies expressing concerns about compensation.
Some hydroelectric companies, like Romande Energie and Axpo, argue that forcing them to store water would not be relevant for certain dams or would unfairly burden them financially. They threaten legal action if the regulations are too restrictive.