Case Studies / Hydropower

Alpiq

Alpiq, access to Switzerland’s second-largest hydropower portfolio.

Project Overview

Investment Year: 2019-2020
Target Ownership Stake: 33.3%
Technology: Storage, run-of-river, and small-scale hydropower plants¹
Industrial Partner: Alpiq

The investment in Swiss electricity producer Alpiq (via the Schweizer Kraftwerksbeteiligungs-AG) includes Switzerland’s second-largest hydropower portfolio.

It consists of a variety of assets, including over 25 hydropower assets diversified over several drainage basins, ranging from small-scale to large storage systems. It symbolizes an important step in securing the future of Switzerland’s renewable energy supply in line with climate targets.

The total installed capacity of the plants is approximately 2900 MW, with a generation of more than 4 TWh per annum.

¹Although this case study focuses on the Alpiq hydropower portfolio, the investment also includes other assets in Switzerland and abroad. The Swiss component is made up of more than 24 hydropower assets and two participations in nuclear plants. Internationally, the investment includes renewables and gas generation infrastructure (excluding coal).

The largest European public-to-private utilities transaction of the last decade

4 TWh per annum

The hydropower plants have a total installed capacity of approximately 2900 MW, generating more than 4 TWh per annum, which makes this transaction one of the largest of the last decade in Europe

Value of hydro

Hydropower is Switzerland’s most important source of electricity, representing more than 60% of energy production

Energy storage

Plays a critical role in future energy systems as a predominant energy-storage technology, providing much-needed flexibility in Europe’s renewables-heavy energy system

Collaboration

Close collaboration with a myriad of industrial partners and public institutions enabled a favorable transaction background, which led to solid governance rights secured in a transaction agreement, as well as transaction certainty

Security of supply

The successful delisting of Alpiq as part of this transaction allowed for the firm’s positioning as a strong, sustainable Swiss electricity producer contributing to the security of electricity supply and maintaining the production of systematically important hydroelectric power

The ideal addition to the Swiss investment group

Alpiq is a well-established Swiss electricity producer also active in energy trading throughout Europe. The investment represents an ideal asset for our clients by contributing to the security of power supply in Switzerland. The investment also supports energy storage needs, an increasingly important consideration due to the addition of intermittent energy sources such as wind and solar across Europe.

Hydropower is a key technology for CO₂-neutral baseload power generation and much-needed flexibility

Hydropower is a crucial, attractive power supply option for a number of reasons:

Renewable, carbon-free energy resource that can contribute to sustainable development by generating local, typically inexpensive power
Reduces reliance on imported fuels that carry the risks of price volatility and supply uncertainty
Can offer multiple co-benefits including water storage for drinking and irrigation, drought-preparedness, flood control protection, aquaculture and recreational opportunities
Provides rapid-response power when intermittent sources are offline, and pumped energy storage when such sources are generating excess power – allowing more renewables, such as wind and solar, to be added to the system

In addition, hydropower is the predominantly installed storage technology globally. Its highly flexible nature will be required to stabilize the grid as Europe moves toward increased reliance on renewables.

Cost-effective

Replacing hydro storage with batteries results in costs that are 2-3 times higher

Established

Established technology with high technical maturity and extensive operational experience

Flexible

Good start/stop flexibility – fast response time crucial for grid stability

Sizeable

Sizeable storage volume with long storage period; suitable for seasonal storage

Efficient

High round-trip energy efficiency and very low self-discharge

Note (1): Mechanical energy storage includes various technologies; i.e. flywheel energy storage whereby a rotor spins at high speed, storing the rotational energy. Global operational electricity storage power capacity, mid-2017.

Alpiq’s hydropower assets: Engineering masterpieces

Grande Dixence

Tallest gravity dam wall globally with 285m height and base thickness of 200m, requiring 6 million m³ concrete weighing 15 million tons – heavier than the Great Pyramid of Giza and enough for a 1.5m x 0.1m wall around the equator.

Grande Dixence

Largest storage lake in Switzerland with a storage capacity of 400 million m³ corresponding to one fifth of Switzerland’s storage energy; the energy reserve can supply 400,000 households for a year.

Nant de Drance