Abstract for: Facing Climate Change: Does Switzerland Have Enough Water?
Energy transitions towards green energy are taking place worldwide, motivated by climate change concerns. As the most used renewable technologies (i.e., wind, solar and hydro) have an unpredictable output, managing this variability is challenging. This paper uses a system dynamics approach to understand what type of regulation is required to successfully manage the simultaneous increase in demand and reduction in water resources in the Swiss electricity system, which is gradually replacing nuclear with solar generation. We address climate variability by running three climate scenarios while considering both demand-side management and capacity auctions. Our findings indicate that, without government intervention, shortages occur and prices are higher. Subsidizing PV eliminates blackouts, decreases the electricity price, and indirectly encourages Pumped Hydro-Storage investments.