FUTURE - Future Electricity Market Models

To achieve the long-term goals of the Energy Strategy 2050 (ES2050) of reduced energy and electricity consumption, a higher share of renewable energy sources, a phase-out of nuclear power, and lowered carbon dioxide emissions, a significant restructuring of the current Swiss energy system is needed. While comprehensive energy policy measures addressing various aspects of energy supply and demand in all sectors of the economy are needed, it is clear that the required transition of the energy system is not conceivable without significant changes in the electricity sector. Given the current electricity system as well as specific regional and resource characteristics of Switzerland, a fundamental question is how the future Swiss electricity system (load, generation, network, storage) will and/or should look like to be consistent with the goals of the ES2050. The main objective of FUTURE is to identify and evaluate the performance of alternative designs for future electricity markets, including a continuation of the current market setting, in terms of their ability to meet the challenges created by the targets set in the Energy Strategy 2050. In particular, FUTURE explores the question of how possible future market environments should be designed (i) to ensure adequate investment incentives for generation and transmission capacity and (ii) to guarantee sufficient temporal and spatial flexibility of power generation in light of fluctuations brought about by intermittent renewable energy sources and demand. It will compare and evaluate alternative institutional settings in terms of their technological feasibility, electricity sector impacts, economic cost and benefits, and overall consistency with the goals of the ES2050. FUTURE will be essential (i) to gain fundamental insights into the question of what future market models will be required in Switzerland for the second phase of the ES2050, (ii) to uncover both the electricity sector and macro-economic impacts of a future electricity system that meets the long-term goals of the ES2050, (iii) to handle the uncertainty about the future development (market design, technological change, economic growth etc.), and (iv) to help establish a social and political consensus for the ES2050 by providing detailed and relevant impact analysis to stakeholders (e.g., electricity firms, non-electricity sectors, households).