Opportunities and limits of energy efficiency auctions – milestones in 16 years of tenders for electricity efficiency in Switzerland

Extended abstract 3-205-26

Competitive tenders are a policy instrument, aiming at realising energy efficiency potentials at the most cost-effective level for public spending. A number of European countries have already adopted tendering schemes for energy efficiency, such as Germany, Denmark, Portugal or Greece. In Switzerland, competitive tenders have been introduced in 2010 and are still in use to this day. The instrument covers efficiency measures that require investments in appliances, installations, vehicles or equipment powered by electricity where the payback period exceeds four years. Two categories of applications are supported, projects (bids submitted by the owner of an installation) and programmes (bids submitted by intermediaries who realise measures for different end-consumers).

The display starts with an overview of the principles of the tendering scheme and key performance indicators. It highlights the different phases this instrument has passed through, from its inception to this day. A first implementation phase involved the introduction and launch of the instrument with a deliberately broad scope (2009-2013). The second phase consisted of standardisation, simplification, and scaling (2014-2019). In particular, it describes and analyses innovative changes in the methodology made to minimise transaction costs while still avoiding, to the best possible extent, deadweight effects. A third phase can be described by further optimisation and saturation (2020-2024). Among others, a principle of “continuous auction” was successfully introduced: whereas in the beginning, applications for projects could  be submitted twice a year, it is now possible to apply anytime during the year and to get a decision within a few weeks. This new feature is explained and its consequences analyzed.

As of 2025, the instrument is entering into a new phase of redefinition and limitation. The outcome of this phase is still open. The main challenges observed are: a stagnation of the competitiveness degree in the tendering of programmes over the last years and the beginning of a cannibalisation effect. Even more important, and starting with 2025, Switzerland is implementing an energy efficiency obligation scheme (EEOS). The EEOS targets electricity suppliers and potentially leads to numerous overlaps between the two instruments.

Download presentation.