Gas to fill initial gap in Swiss nuclear exit

Fri Sep 28, 2012 2:02pm EDT

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* Expects to build new gas plants to meet demand

* Switzerland unveils energy strategy to 2050

By Emma Farge

GENEVA, Sept 28 (Reuters) - Switzerland would have to charge higher end-user power prices and resort to new gas-fired plants to fill the supply gap created by its planned nuclear phase-out prompted by Japan's Fukushima accident, the Swiss energy ministry said on Friday.

The country, which voted last May to phase out nuclear by 2034, on Friday unveiled an ambitious energy strategy intended as a road map for coping with the transition.

"It will be necessary to temporarily develop electricity from fossil fuels... until the energy needs can be completely covered by renewable energy," the energy ministry said in a statement on Switzerland's new strategy through to 2050.

It said that such plants would probably include combined heat and power units as well as Combined Cycle Gas Turbines (CCGTs). Some analysts expect global gas prices to tumble due to the ready availability of new sources from shale, increasing the fuel's appeal.

The statement also said the average household electricity bill, estimated at 890 Swiss Francs ($950) a year, was due to rise in line with higher costs for renewable energy and to cover the costs of investment in the grid.

The Alpine country, which sources about 40 percent of its energy from five nuclear power plants, joined Germany in voting to phase out nuclear energy after the Japan Fukushima crisis shook confidence in the sector.

Now doubts are emerging about the ability of these countries to expand their renewable capacity in time for when nuclear station shutdowns will squeeze supply margins.

The West's energy watchdog, the International Energy Agency, has already warned that Switzerland may struggle to meet its future power demand and that end users may face higher prices as part of the transition.

Belgium's cabinet postponed the planned closure of one of its oldest nuclear reactors by a decade in July over concerns about finding alternative power sources. Germany may have to slow down its planned transformation to green energy amid cost concerns, its Environment Minister said in August.

The Swiss strategy, part of a public consultation, envisages a greater role for hydropower and renewables as part of its new strategy. It includes targets for hydropower production of 37,400 GWH and renewable energy production of 11,940 GWH by 2035.

The strategy also includes several measures designed to accelerate the process of obtaining permits for renewable energy projects.

Switzerland's strong tradition of direct democracy can slow the development of controversial projects such as wind farms, denounced by some as eyesores. A new version of the strategy will be released in 2014 after the public consultation.

($1 = 0.9398 Swiss francs) (Editing by James Jukwey)

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