Governing Energy Transitions: strategic challenges of local utility companies in the Swiss energy transition

Many countries are currently firmly committing to a transition towards a more sustainable energy system, each facing their own unique challenges. The Swiss energy transition is particularly challenging due to a combination of commitments: (1) a gradual phase-out of nuclear energy, currently about a third of the country’s electricity production, is expected by 2034, (2) construction of new renewable energy sources such as solar PV, wind and micro-hydro, (3) electrification of heating and transportation, (4) energy saving, and (5) stringent CO2 emission targets.

Utility companies play an important role in the realization of the Swiss energy transition, but are also facing numerous strategic challenges as a consequence of a rapidly changing playing field. The commitments necessary to transition towards a more sustainable energy system are not necessarily aligned with the current operations of local utility companies. For example, the lack of incentives for energy efficiency programs, market opening, smart grids and renewable energy has utilities looking for new business models.

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