A modo de conclusión: lecciones de política

The introduction of the FIR was a significant step towards the facilitation of RETs and boosted the SHP development. The FIR scheme is the main market-based instrument for the institutional facilitation of SHP in Switzerland. In its initial stage, it had some problems which have already been dealt with (e.g., well maintained and rehabilitated plants could not receive the FIR, projects could apply even though the water concession would never be obtained, and lack of funding183). Further problems are listed in Table 6-3. The FIR scheme remains in revision by the Federal parliament and the SFOE.

During the first part of the research, several other actors were identified who worked to improve the FIR scheme (see right column in Table 6-3). Therefore, this research did not focus on contributing significantly towards the evolution of the FIR with the exceptions of the adaptation of the scheme to storage and pumped-storage SHP for peak electricity production (see Section 8.2.1) and the technical quality guaranteed (see Section 6.2).

180_{http://www.minergie.ch (accessed on 26.09.2011)}

181 _{4 interviewees: link with concession} 1 interviewee: link with FIR 2 interviewees: link with both 182

Meeting with Bernhard Hohl, SFOE, 11.10.2011 183

Since March 2012, an alternative to the FIR is the green electricity exchange market (http://www.oekostromboerse.ch/) through which projects can be funded.

6. Analysis and discussion of alignment between small hydropower and its institutional framework in Switzerland

Table 6-3: FIR problems and possible solutions

FIR problem Solution suggestion Actors engaged for the solution

The initial applied differentiation for the different FIR is not enough to account for the strongly differing characteristics of the SHP plants, including the difference for expanded or renewed plants (Manser, 2011).

Adapt the remuneration curves (see second-best choice in (Manser, 2011: 67)). On average, the effective FIR paid in 2010 was over what was required per plant to be economically viable with an IRR of 5%. However, the adaptations might involve a long and costly process, thus not be implemented.

SFOE

The FIR scheme lacks certain provision for low-head sites (Leutwiler, 2008).

Adapt the remuneration scheme, i.e. the bonus on the head (introduce additional differentiation below 5 m). Low head SHP plants represent most of the remaining potential of run-of-the-river plants and many existing plants could be rehabilitated. The institutional facilitation has to be coherent with the available technological options.

ISKB/ADUR

The FIR scheme is static and does not take into account changes in tax schemes. E.g. when the water royalty is increased affecting SHP above 1 MW, the FIR is not adapted automatically.

Modify the FIR scheme to be dynamic in order to take into account any modification of federal tax schemes over the time period of the FIR payment. Institutions have to be coherent in themselves and evolve together over time.

ADUR

Some plants are not cost-efficient and receive FIR even though they have investment costs above 100‘000 CHF/kW (Manser, 2011). More cost-efficient plants are stuck on the waiting list.

Introduce minimum cost-efficient standards per SHP category (run-of-the- river, drinking water, etc.).

Alternatively, the application list for FIR could be changed from chronological order (initially) to granting the FIR by a merit considering the most cost-efficient plants first during a given period of time.

A further alternative evaluated by the government is to grant FIR to large plants in priority.

SFOE

The energetic optimisation of a site is not considered enough. This is partly due to the rush on the FIR due to the limited funding. Once the FIR is allocated, technical modification of the installed capacity is limited (see Section 5.2.2). In addition and in order to get higher remuneration per kWh, a site can be split into several smaller projects instead of one project using the technical potential in an energetically optimal way.

Introduce a label or other measure to guarantee the technical quality of SHP plants (see Section 6.2). Technical performance should be as high as possible as consumers finance the FIR scheme and do not wish to support badly designed plants.

SFOE, ADUR

Energiepool who is in charge of the FIR payments does not respect the payment deadlines. The MKF is paid monthly with a payment term of 30 days; the FIR is paid every 3 months with a payment term of 60 days. Even this term is not respected1.

Energiepool has to pay on time the FIR. ISKB/ADUR, SFOE

The VAT was added at the end of the FIR design process without further consultation of the different stakeholders. MKF has no VAT. The issue was treated by the Federal Administrative Court which rejects the removal of the VAT from the FIR scheme.

Add the VAT to the FIR and make the FIR dynamic in order to adapt tariffs directly when the VAT is changed.

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Customers paying for labelled electricity pay as well for the FIR. They are therefore charged twice – once to be supplied from RETs themselves (label) and once to support RETs development (FIR). Therefore they don‘t have any personal benefit from paying for the FIR.

Customers buying labelled electricity have to be exempt from paying for the FIR.

Naturemade-VUE

1

Several interviewees mentioned this fact. E.g., an interviewee operating several plants had not only payment delays, but wrong adjustments from Energiepool between different years. As the FIR is paid taking into account the yearly production, the first payment of the year takes into account the final accountability of the previous year. In 2010, Energiepool mixed the difference of 2009 thus instead of paying the difference to the interviewee’s business subtracted the difference from the first payment. (Interview VS-5)

Sources: from the interviews and in the table

Finally, it has to be mentioned that some stakeholders within the hydropower sector suggest using the FIR to finance rehabilitation and/or upgrading of large hydropower plants184. The argument is that in some cases and with measures having no or almost no impact on the environment, the efficiency gains lead to an amount of renewable kWh which can be significantly bigger than the production of many MHP plants having an impact on the environment. This suggestion remains a topic within the on-going revision of the FIR scheme.