Dr Walter Steinmann is the Director of the Swiss Federal Office of Energy (SFOE). The SFOE is responsible for energy policy-making, which includes securing sustainable energy supply, promoting renewable energy and energy efficiency, and the coordination of energy research in Switzerland.
Dr Steinmann is also a member of the Governing Board of the International Energy Agency. From 2007 to 2010, he was a member of the Governing Board of the International Atomic Energy Agency. Dr Steinmann holds a MA in Economics from the University of Zurich and a PhD from the University of Konstanz, Germany.
1. Switzerland is a country with minimal indigenous sources of energy. How has Switzerland addressed this challenge, and what are key priority areas of Switzerland's energy policy in the coming decade?
Dr Walter Steinmann: Switzerland's energy supply depends highly (around 80%) on imports of fossil and nuclear fuels. Even the country's electricity supply depends on imports during the winter because seasonal variations of hydropower. Energy supply is however a responsibility of private operators. The Swiss Government supports private energy business through political cooperation with other governments and by advocating stable and investment-friendly international frameworks, partly through international organisations such as the International Energy Agency, the Energy Charter or WTO. Switzerland also engages in energy policy and research cooperation with a number of countries in and outside Europe. These serve the purpose of promoting sustainable energy sources and technologies, but are also intended to help secure the Southern Gas Corridor (diversification of European gas supply thanks to a new pipeline from Azerbaijan, bringing Caspian gas to the European market) which is of considerable importance for Switzerland.
2. Switzerland made the decision to phase out nuclear as part of its energy mix in 2011. What are some of the key considerations in making this decision, and preparations towards the gradual phase out of nuclear power by 2034?
Dr Walter Steinmann: In the wake of the Fukushima accident, Switzerland has adopted a new energy policy, which foresees to phase out nuclear power as the five existing plants reach the end of the lifetime, i.e. roughly between 2020 and 2034. The decision was prompted by the fact that new nuclear plants had no chance of being approved by referendum. The resulting supply gap will be filled by ramping up renewables – hydro, biomass, wind and photovoltaics, as well as geothermal if proven commercial – and forceful efficiency policies. During an intermediate period, we may have to rely on increased electricity imports, and, as a last resort, on gas-fired power. Demand for oil and gas, mainly in the buildings and transport sectors, are to be massively curbed with efficiency measures. A full legislative package to ensure these policy goals will be submitted to Parliament before year-end 2013.
3. Switzerland's central geographical position in Europe has enabled it to be a major electricity trader and transit hub. What is one key lesson Switzerland can share with other regions, such as ASEAN, on cross-border energy cooperation
Dr Walter Steinmann: Switzerland lies at the heart of Europe. The EU is Switzerland's most important trading partner. Energy-wise, Switzerland is a central platform for European electricity trade – the volume of electricity flowing across our borders is in the same order of magnitude as our internal demand. Switzerland is also a major gas transit route, as the volume of gas transiting from Germany and France to Italy exceeds domestic demand by a factor of five. Consequently, we have been negotiating an electricity agreement with the EU for some time now. Its aim is to fully integrate Switzerland in the EU internal electricity market. Switzerland is considered the cradle of European electricity integration, as the Swiss, German and French grids were interconnected and operated from the Swiss dispatch center at Laufenburg in 1958. The initial driver was to enhance supply security; later, operational and commercial efficiencies became equally strong drivers. Energy market integration requires trust among countries, since governments may be reluctant to rely on neighbours for vital services such as energy. However, as the birth of the EU, i.e. its predecessor the ECSC, or the first continental gas pipelines from the USSR to Europe in the 1970s illustrate, trust can be fostered precisely through increased mutual reliance on vital resources or revenues thereof. Of course, energy market integration needs to be continuously bolstered by solid governance and rule of law to enforce investment protection and unimpeded trade.
4. Switzerland's industrial and transportation sectors forms a substantial part of its energy demand. What are some key initiatives to drive sustainability efforts in these sectors?
Dr Walter Steinmann: Swiss industry is already highly efficient and continues to improve. The key policy driver are legally enforceable convenants whereby industries agree to reducing their CO2 emissions and increasing their energy efficiency in return for a CO2 tax exemption. The Swiss cleantech industry is a key player in the transformation of the Swiss energy landscape. Energy efficiency / renewable energy are among the most important growth markets in the coming decades. The implementation of energy efficiency measures in buildings (i.e. thermal insulation, building management) and transportation ("road-to-rail"), and the promotion of renewable energies are expected to generate added value and jobs in Switzerland, and may be some thousands of new jobs and generate much higher sales.
5. As an economy reliant on oil and gas imports, what are some of the foreseeable implications of the United States' shale gas revolution for Switzerland's and Europe's energy markets?
Dr Walter Steinmann: European and Swiss electricity and gas prices are determined by many variables. The hitherho indirect impact of US shale gas through freed up US coal exports to Europe is just one of them. Gas accounts for little over 10% of Switzerland's energy mix; all of it for heat in industry and households. Swiss gas imports are sourced through long-term contracts and, in recent years, increasingly on the LNG spot market. Possible future US shale gas exports will kindle competition. No coal and very small quantities of gas are used for electricity production in Switzerland. Our Energy Strategy 2050 posits no significant gas consumption increase, as demand of possible new gas-fired plants will be offset by decreasing gas use for heating. Switzerland will continue to follow closely the developments of world energy markets triggered by the promotion of non-conventional resources.