Deregulation of the Swiss Electricity Industry: Implication for the Hydropower Sector

Massimo Filippini, Silvia Banfi () and Cornelia Luchsinger ()
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Silvia Banfi: Center for Energy Policy and Economics CEPE, Department of Management, Technology and Economics, ETH Zurich, Switzerland
Cornelia Luchsinger: BKW FMB Energie AG, Viktoriaplatz 2, 3000 Bern 25, Switzerland

No 02-13, CEPE Working paper series from CEPE Center for Energy Policy and Economics, ETH Zurich

Abstract: Although Switzerland is not a EU-member country, in December 1999 the Swiss Parliament adopted the new Swiss Electricity Market Law (EML). The EML laid the foundations for reforming the Swiss electricity industry by moving from regulation to deregulation. The Swiss population will vote on this issue in September 2002. If accepted, the deregulation process will be phased in gradually during a transitional period of seven years. This paper describes the Swiss electricity industry and shows how the federal structure leads to different regulation frameworks in each canton and municipality. Moreover, the paper sets out the most important characteristics of the law. In a second part, the paper focuses on the cost structure of the hydropower sector and gives an overview on the development of the production costs over the last decade. The paper shows that the cost structure of the producers has changed in the run-up to market deregulation. Further, the paper analyses the actual cost structure of the hydropower sector in Switzerland and shows the expected impact of the EML on the hydropower firms, especially on the competitiveness of the hydropower sector and on chances and dangers related to the deregulation of the electricity market.

Pages: 22 pages
Date: 2002-04
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Citations: View citations in EconPapers (13)

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