EPFL analyzes the economic impact of three energy-transition scenario

A number of studies have compared various energy-transition scenarios for Switzerland in terms of CO₂ emissions and final energy and electricity consumption. But few studies have looked at the economic impact of the country’s energy transition. Researchers at EPFL have addressed this shortcoming by looking at how three realistic scenarios would affect Switzerland's energy situation in 2050.

Under the first, “status quo” scenario, the federal government's 2011 energy policy remains in place with no additional measures. The second scenario looks at what the situation will be like in 2050 if measures recently adopted by the Federal Council are fully implemented. And the third scenario is based on the federal government's new 2050 energy policy (a vote on the first round of measures already took place, on 21 May 2017).

Using energyscope.ch, the online calculator developed by EPFL's Energy Center and the Industrial Process and Energy Systems Engineering (IPESE) laboratory, the researchers analyzed the impact that each of these scenarios would have in terms of jobs, energy-related costs and Switzerland’s energy independence.

Renewable energy and increased energy efficiency boost energy independence

The third, “new energy policy” scenario turned out to be the best in terms of Switzerland’s energy independence. The use of locally sourced renewable energy – such as solar, wind, hydro and wood-based power – combined with an improvement in the energy efficiency of cars and buildings would result in a sharp decrease in energy imports such as heating oil, gasoline, diesel and natural gas. The country’s energy independence would increase from 26% today to around 72% by 2050 under this scenario. With the second scenario, in which the Federal Council's energy measures are brought in, the level would increase to just 46%. And unsurprisingly, Switzerland’s energy independence would remain at 26% under the first, “status quo” scenario (see Figure 1).

Figure 1: Energy independence

Energy efficiency creates jobs

The energyscope.ch calculator also now includes a new tool for analyzing the impact of energy-efficiency measures on jobs, recently developed by the Energy Center and the Laboratory of Environmental and Urban Economics (LEURE).

The results show that there would be 35% more jobs in Switzerland’s energy-related sectors under the “new energy policy” scenario than under the other two scenarios. “This is mainly because new measures to increase energy efficiency would create jobs, particularly when it comes to building renovation, where a large part of the value added would be generated by local companies in Switzerland,” says Professor Philippe Thalmann from LEURE. “The other scenarios rely more heavily on fuel imports, which would account for a larger proportion of costs and produce fewer jobs locally” (see Figure 2).

Figure 2: Employement

What’s more, under the “new energy policy” scenario, the number of jobs in the transport sector would increase as the focus shifted more towards public transportation. However, the rise in the number of electric cars, which require much less maintenance than gasoline- and diesel-powered cars, would probably result in fewer jobs in the automobile sector.

In their study, the researchers looked at each sector directly linked to energy production and distribution. They used an input-output model to estimate the number of jobs created as a result of the energy transition, looking at the structural impact on the economy based on current energy prices.

Similar costs for all three scenarios

Under all three scenarios, the calculator put the annual costs of each energy system at around 24 billion francs (excluding taxes). This figure includes infrastructure costs (such as the power grid, production units, etc.), the costs of enhancing energy efficiency, and the cost of importing petroleum products, natural gas and electricity.

The investment needed for the three scenarios varied by less than 10% (see Figure 3). So after factoring in a margin of uncertainty, no one scenario stands out as being more expensive than the others. However, the future costs of the scenarios that rely more heavily on fossil fuels are more uncertain; such energy systems are exposed to oil and gas prices, which are more difficult to forecast over the long term than clean tech prices are.

“This is not really all that surprising,” says Professor François Maréchal from IPESE. “Renewable energy, coupled with greater energy efficiency, would of course require additional investment, but this would be offset by the decrease in fuel imports. On top of that, renewable energy – and especially photovoltaic solar power – and energy-efficient solutions like electric cars will keep getting cheaper.”

Figure 3: Costs