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 in the lowlands, together with large-scale storage plants.
Based on the estimated mean production level, hydropower still accounted for almost 90% of domestic electricity production at the beginning of the 1970s, but this figure fell to around 60% by 1985 following the commissioning of Switzerland's nuclear power plants, and is now around 57%. Hydropower therefore remains Switzerland's most important domestic source of renewable energy.
The hydropower market is worth around 1,8 billion Swiss francs (basis = delivery from power plant at 5 cents per kilowatt hour), and is therefore an important segment of Switzerland's energy industry.
The federal government wants to promote the future use of hydropower to a greater extent through a variety of measures. In order to exploit the realisable potential, existing power plants are to be renovated and expanded while taking the related ecological requirements into account. The instruments to be used here include cost-covering remuneration for feed-in to the electricity grid for hydropower plants with a capacity up to 10 megawatts, and the measures aimed at promoting hydropower included in the "Renewable energy" action plan. In terms of quantity, the goal is to increase the mean estimated production level by at least 2,000 GWh versus the level recorded in 2000 by renovating existing hydropower plants and constructing new ones. The Swiss Federal Office of Energy deals with policy-related aspects of hydropower (promotion, strategies, perspectives) as well as technical and safety aspects, while the Swiss Federal Office for the Environment is responsible for environmental aspects (residual water, protection of bodies of water).