Thanks to its topography and high levels of annual rainfall, Switzerland has ideal conditions for the utilisation of hydropower. Towards the end of the nineteenth century, hydropower underwent an initial period of expansion, and between 1945 and 1970 it experienced a genuine boom during which numerous new power plants were opened, together with the country’s largest storage facilities.
Based on the estimated mean production level, hydropower still accounted for almost 90 percent of domestic electricity production at the beginning of the 1970s, but this figure fell to around 60 percent by 1985 following the commissioning of Switzerland’s nuclear power plants, and is now around 57 percent. Hydropower therefore remains Switzerland's largest domestic source of renewable energy.
The hydropower market is worth around 1.8 billion Swiss francs (basis = assumption of average production cost of 5 cents per kilowatt hour supplied from the power plants). It is therefore an important segment of Switzerland’s energy industry. Hydropower production is also important for the authorities responsible for issuing operating licences: with the currently applicable maximum water usage levy of 110 Swiss francs per kilowatt (gross output), the revenue from the water usage levy paid by hydropower plant operators to the licensing authorities amounts to more than 500 million Swiss francs per annum.
According to Energy Strategy 2050, the mean annual production of electricity from hydropower plants is to be increased to 37,400 gigawatt hours (GWh) by 2035 and to 38,600 GWh by 2050.
To achieve these targets, the existing power plants are to be expanded and renovated, and new ones are to be constructed, taking account of ecological requirements.
The use of hydropower is to be promoted with the aid of a variety of measures within the framework of Energy Strategy 2050. These include cost-based feed-in remuneration for new hydropower plants with an output up to 10 megawatts, and investment contributions for the renovation and/or expansion of hydropower plants up to an output of 10 megawatts. In addition, various measures have been specified in the relevant legislation to improve the framework conditions for hydropower plants (declaration of national interest, definition of suitable bodies of water in cantonal structure plans, simplified licensing procedures), plus support measures within the framework of the SwissEnergy programme. In the period from 2018 to 2022, existing hydropower plants can benefit from support in the form of a market premium.