Abstract for: Security of Supply in the Swiss Electricity Market: A System Dynamics Approach

Guaranteeing the security of supply (SoS) has become more complex since liberalization of electricity markets started. Liberalization and the larger share of intermittent sources (photovoltaic [PV] and wind energy), combined with increasingly interconnected markets, have a direct impact on SoS. Given the large number of elements and stakeholders involved, actions to enhance security may conflict with economic efficiency and/or environmental protection, thus increasing problem complexity. We develop a SD model that allows us to analyse the investment decision process and, understand, how the presence of PV and wind energy affects the reliability of the system. We focus on the Swiss electricity market, which is currently undergoing a liberalization process, and has simultaneously decided to encourage the implementation of renewable energies and to phase out nuclear energy. Results of the simulation show that nuclear production is replaced mainly by PV, CCGT and imports, which impacts the SoS negatively. Although installed capacity increases, the decreasing de-rated margin indicates a drop of the system’s reliability. This reveals a problem of capacity adequacy that is partially “solved” by increasing imports. Regardless of the increasing share of inexpensive sources, this large dependency drives prices up, especially in winter, and to a lower extend in autumn.