Switzerland is endowed with extraordinary conditions for hydropower exploitation. Its relief, with high slopes and valleys, lends itself to the construction of complex storage schemes spanning several valleys. Its hydrology, with abundant precipitation and retention through glaciers and lakes, provides a valuable input.

As Switzerland lacks fossil fuels, hydropower became the base for the country’s electrification at the beginning of the 20^th century. The first units were run-of-river plants along the Aar and Rhine in the lower-lying parts of the country, close to consumption centres. In the golden age of hydropower in the 1950s and 1960s large storage schemes were built in the Alps, like the pioneering Grande Dixence project (the tallest dam at that time), and production ramped up significantly. Until the end of the 1960s, when the first nuclear power plants came online, and besides some marginal thermal generation, hydropower was the only electricity source. Today, hydropower remains the main generation source, with an average annual production of 36 TWh, about 57 per cent of total electricity production. In 1958, Switzerland connected its grid with those of Germany and France – the so-called ‘Star of Laufenburg’ – and thus launched the nucleus of what has become the European internal electricity market. Today, Switzerland has over 40 high voltage interconnectors with its neighbors. Cross-border electricity flows exceed domestic production. Switzerland is pivotal for electricity exchanges in the central part of Europe. Not only the grid, but also the flexible hydropower plants, contribute to balancing electricity demand and production beyond the borders. Hydropower plays a major role in integrating the production of variable renewables, like solar and wind, not only on a regional but also on a European scale. By the end of 2018, installed hydro capacity exceeded 15 GW. The storage capacity of the reservoir lakes amounted to 8.8 TWh, a quarter of average yearly hydro production. Recent developments mainly saw the upscaling of the flexibility of storage power plants, like Bieudron (with the world’s most powerful Pelton turbine and highest head), and the recent construction of two large pumped storage plants in the 900 to 1,000 MW range, Linth-Limmern and Nant de Drance. Unfortunately, those powerful balancing units do not currently operate to their full efficiency, as Switzerland, in the absence of an electricity agreement with the EU, is excluded from electricity market coupling. After the Fukushima incident in 2011, Switzerland decided to gradually phase out nuclear power. Plants do not have a set closure date and may run as long as they are safe. The last nuclear plant is likely to be shut in the 2030s. According to the national Energy Strategy 2050, which was adopted by Parliament in 2016 and endorsed by voters in a referendum in 2017, the nuclear production shortfall (just above 30 per cent of total) is to be substituted by renewables, including hydropower, and more imports in winter, while efficiency is to stabilise electricity demand. Therefore, hydropower is back in the focus of Swiss energy policy: The energy law sets an indicative target of 37.4 TWh for average yearly hydropower production by 2035. The extension and optimisation of existing plants and the construction of new large and small-scale hydro will contribute to this target and offset production constraints stemming from environmental regulation. Climate models do not anticipate significant reductions in precipitation. Meanwhile, melting glaciers tend to increase the availability of water. At Oberhasli, with the project Trift, a new plant is projected at a newly formed glacier mouth lake. In the long term, the reservoirs will help adapting to new environmental conditions, e.g. through multifunctional use of the reservoirs. In recent years, low wholesale market prices in Europe may have inhibited investment in major rehabilitation of existing plants. Furthermore, Swiss hydropower operators pay a ‘water royalty’ to cantons or communes for the use of water, which can make up up to one-quarter of production cost. As electricity prices rebound, this concern decreases. One major challenge remains, however: hydropower plant concessions, which were awarded in the 1950s and 1960s, are to be renewed in the next decades. The cantons and communes, which are the owners of the water rights will have to reflect about the future of the plants. Some cantons have already decided to retain some concessions; consequently, they will have to bear the investments and will be exposed to market risks. Switzerland is enhancing the sustainability of its hydropower. The importance of our waterbodies for biodiversity and recreation is well recognised. Following a countrywide impact assessment of hydropeaking, fish migration and bed load, legislation mandates to reduce negative impacts of hydropower to a tolerable level until 2030. This requires substantial investment. Reconciling energy, environmental and local communities’ interests is challenging. Although hydropower is a mature technology, it is fundamental for Switzerland’s future security of supply, decarbonisation and sustainable development.