A quantitative analysis of the electricity market in Switzerland

The electricity market in Switzerland began liberalisation in 2008, with the passing of the Federal Electricity Supply Act, and is still not fully liberalised. Owing to its relative immaturity, there is little in the way of centralised reporting of its stylised facts, a situation the current work attempts to rectify. As a guideline, a standard Hourly Price Forward Curve (HPFC) is developed. Since Switzerland does not yet boast a financial index for energy Futures, the implementation of this model is not straightforward. This issue is addressed by a quantitative market analysis based on regionally specific stylised facts. The resulting model also yields insights on the influence of bottom-up factors driving Swiss spot prices, in particular with regards to the relatively high share of hydro-power in Switzerland. We conclude with a discussion of this “Swiss-made” HPFC and its implications for the evolution of the Swiss market.