Energy reform – can Switzerland do it alone? Sustainability@UBS Speaker Series employee event
Switzerland has decided to abandon atomic power and has called for energy reform. What does this mean for business, the Swiss financial services industry and government? Can there be energy reform at just the national level? Christine Novakovic and Peter Guenthardt of UBS discussed these issues with representatives from the field of science and the power industry.
The future of energy, the necessary incentives for energy reform and the role of banks – these topics were discussed at the SustainabilityatUBS Speaker Series by Christine Novakovic, head of Corporate & Institutional Clients, UBS Switzerland, Peter Guenthardt, head of UBS Investment Bank in Switzerland, Lino Guzzella, president of the Swiss Federal Institute of Technology Zurich, and Pierre-Alain Graf, CEO of Swissgrid, the transmission grid operator in Switzerland.
Hydropower covers 55-60% of Switzerland's electricity needs and atomic energy 40%. Phasing out the latter means that its 40% would have to come from other energy sources by 2035. According to Graf, this reapportionment can be accomplished by reducing energy consumption, increasing use of renewable energy sources and importing energy from abroad.
Switzerland will not be able to finance renewable energy on its own, the panellists acknowledged. To the question of what role banks should play in this financing, one suggestion was that they should provide risk capital: in the spirit of social responsibility, they should support innovation in the energy sector. Other panel members saw banks strictly as intermediaries: the capital markets will invest when it makes sense economically – having a long-term business model and the right kind of incentives are important.
The panellists agreed that banks could help prepare the utility companies, which so far have largely financed themselves on the Swiss market, to tap into the international capital markets. In order for institutional and private investors to participate in financing energy reform, more specialization in investment products based on renewable energies has to be achieved. In addition, the subject also has to become well-established among clients so their willingness to invest can grow.
The SustainabilityatUBS Speaker Series features lectures and podium discussions on select sustainability topics. Representatives of UBS senior management join leading economists, business people, researchers and other experts to discuss the topics in front of an audience of UBS employees. The events take place three to four times a year.