Switzerland grants CHF 21.4 million in market premiums for two unprofitable large hydropower plants
Switzerland’s Federal Office of Energy has granted market premiums of CHF 21.4 million for 2,142 million kWh generated in 2025 by large hydropower plants and sold below production cost. Only three applicants filed requests amid high prices, and much of the roughly CHF 100 million available remains unused.
EuroEnergy Newsroom · 
Switzerland · 2 min read
The Swiss Federal Office of Energy (SFOE/BFE) has granted market premiums totalling CHF 21.4 million for electricity generated in 2025 by large hydropower plants and sold on the market below production cost, the Federal Department of the Environment, Transport, Energy and Communications (DETEC/UVEK) announced on Monday, 2 November. The money goes to three applicants for their shares in two hydropower schemes; the recipients’ names are not published, in line with the energy promotion ordinance.
The figures. The premium covers 2,142 million kWh, or 5.7% of Switzerland’s hydropower generation in 2025, and is capped at 1 centime (Rappen) per kWh. Around CHF 100 million was available for 2026, so the funds were not exhausted; unused amounts go to other purposes set out in the Energy Act. For the 2024 financial year the premium had totalled about CHF 19.6 million, and in December 2021 the SFOE had announced CHF 155 million.
Why so few applications. According to the SFOE fact sheet, the small number of applications is a consequence of high prices: the average spot price in 2025 was CHF 95.33/MWh, compared with an average of CHF 48.4/MWh in 2017–2020. The SFOE’s energeia plus magazine wrote in July that at such prices most large hydropower plants were profitable.
How it works. The instrument has existed since 2018 for plants above 10 MW and is financed from the grid surcharge fund, into which consumers pay 2.3 centimes per kWh. Since 2025 the calculation also includes revenues from ancillary services, the forward market, the winter reserve and guarantees of origin. The premium is distinct from the new sliding market premium for new, expanded or renewed plants, which could be applied for for the first time in June 2026.
What comes next. The decisions can be appealed within 30 days to the Federal Administrative Court. For the 2026 financial year, applications must be submitted by 31 May 2027, and the last premium payment will be made in 2031.
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