Switzerland launches consultations on adapting funding instruments for renewables

Switzerland launches consultations on adapting funding instruments for renewables Flag thrower, Switzerland (source: flckr/ Jessica Gardner, creative commons)
Alexander Richter 4 Apr 2022

The Swiss Federal Council has launched consultations that target the adaptation of funding instruments including geothermal. If confirmed they will include investment contribution for development and exploration.

On March 30, 2022, the Federal Council opened the consultation on amendments to various ordinances in the energy sector. The revision package strengthens the funding instruments for electricity production from renewable energies. There are now also investment contributions for wind energy and geothermal systems. This instrument will be expanded for hydropower and biomass plants. Higher one-time payments will be introduced for photovoltaic systems without self-consumption, some of which will be awarded through auctions. A winter bonus for PV systems will also be introduced. There is a new instrument for operating cost contributions for biomass plants.

With the parliamentary initiative 19.443 “Uniform promotion of renewable energies. One-time remuneration also for biogas, small hydropower, wind and geothermal energy”, the Parliament decided on October 1, 2021 to replace the feed-in tariff system, which expires at the end of 2022, with investment contributions. In addition, it provides for new operating cost contributions for biomass plants. Parliament has also decided to make significant adjustments to the one-time payment for photovoltaic systems. All of these funding instruments will run until the end of 2030. These new legal bases must now be specified in the relevant ordinances.

Various details are described for photovoltaic systems, for which we point to the link to the actual release shared below.

New hydropower plants with a capacity of 1 MW or more (previously 10 MW or more) are entitled to an investment grant. Significant extensions and renewals of systems with a capacity of at least 300 kW continue to be supported. For new and expanded hydropower plants there is a uniform approach for the investment contributions of 50% of the eligible investment costs, for renovated plants it is 40% for small hydropower plants under 1 MW capacity and 20% for large hydropower plants with more than 10 MW (for plant sizes in between the approach linearly shortened).

Certain small hydropower plants in the feed-in tariff system are increasingly suffering from drought periods in which they cannot achieve the required minimum production quantities. Such dry periods are now taken into account when proving that the production targets have been achieved, thereby relieving the operator.

The investment contributions for biogas plants that are operated with agricultural biomass should be 60% of the chargeable investment costs. There is 40% for wood-fired power plants and other biogas plants and 20% for public infrastructure plants (KVA, ARA) as well as sludge incineration and landfill gas plants. In addition to the investment contribution, there is now also an operating cost contribution for biomass systems, which is paid quarterly for each kilowatt hour fed into the power grid. The amount of the contribution to operating costs depends on the type of system and the performance class.

Wind turbines are also now subsidized with investment grants. The contribution rate is 60% of the eligible investment costs.

For geothermal systems, there are now investment contributions instead of exploration contributions, which are now regulated in the EnFV instead of in the EnV as before. The costs of developing the underground and certain planning costs in the prospecting and development phase can also be claimed. After the successful completion of the exploration phase, investment grants for the construction of geothermal plants for power generation can now also be applied for.

The Energy Ordinance (EnV ) simplifies the regulations for self-consumption and for groups for self-consumption (ZEV). The requirement for contiguous plots of land is thus removed. Furthermore, the specifications for the pricing of ZEV with tenants and leaseholders will be simplified.

The minimum requirements for the efficiency of various devices are increased in the Energy Efficiency Ordinance (EnEV) . This implements the Federal Council’s mandate of February 16, 2022 to increase efficiency by 2025. Among other things, refrigerators, tumble dryers, dishwashers and electric boilers are affected. Furthermore, the energy label for passenger cars takes into account that the approval of these vehicles is increasingly based on vehicle-specific data from the certificate of conformity (CoC) instead of the previous generic type approval (TG).

The conditions for the implementation of so-called sandbox projects (pilot projects) are specified in the Electricity Supply Ordinance (StromVV) . Sandbox projects are part of experimental electricity legislation. They are intended to support innovation in the field of power supply and the further development of legislation.

In addition, new provisions are included in the StromVV, which expressly regulate the handling of so-called coverage differences in the grid usage fee. This new regulation leads to a relief for end consumers.

The consultation lasts until July 8, 2022. The revised ordinances are scheduled to come into force at the beginning of 2023.

Source: Our German partner site TiefeGeothermie, Schweizer Bundesrat