Grimsel 4 pumped storage power plant: rapid expansion of hydropower

The construction of a new pumped storage power plant is usually a generational project. Anyone familiar with the Swiss energy landscape knows that years of procedures, objections and expert reports often lie between the initial idea and the start of construction.

One project in the Bernese Oberland, however, is now ready to go. Construction of Grimsel 4, the new pumped storage power plant operated by Kraftwerke Oberhasli AG (KWO), is due to begin this year. The building permit was granted at the beginning of 2026, and the amortisation agreement will be considered by the Grand Council in March 2026. If everything runs smoothly, the first electricity will already be generated in 2031. But how is this pace even possible?

Better use of existing infrastructure:
Grimsel 4 is being built entirely underground. The new power plant is intended to create an additional connection between the existing reservoirs Grimselsee and Räterichsbodensee and make more efficient use of the collected water. The impact on the landscape and environment is minimal.
Concession already in place:
As part of the “Spitallamm Dam Replacement” project, preparatory work for Grimsel 4 was therefore already carried out during the lowering of Lake Grimsel in winter 2024/2025. Thanks to this preliminary work, the project can be implemented more quickly and cost-effectively. The shareholders will be able to make the final investment decision in the coming months.
Need is widely recognised:
The expansion of solar installations is progressing rapidly – that is good, but it makes our electricity system more volatile. The need for flexibility is increasing. It is now widely recognised that the targeted expansion of flexible hydropower is central to maintaining balance in the electricity system and thus to security of supply. Combined with the minimal impact on the landscape and the environment, this ensures a high level of acceptance for the project.

As the largest shareholder of KWO, BKW supports the rapid implementation of Grimsel 4. The project not only creates a new power plant, but is also an example of how the energy transition in Switzerland can succeed: quickly, responsibly and with a view to future generations.

The amortisation agreement – basis for the investment decision

A project such as Grimsel 4 is very expensive, and the new pumped-storage power plant has a very long service life. The investment can only be made if the costs can be depreciated over a longer period. As KWO’s overall concession expires at the end of 2041 and a reversion to the Canton of Bern is possible, a clear arrangement is needed. In this event, the amortisation agreement sets out the remuneration to be paid by the canton to KWO for the investments in the new power plant. This protects KWO’s shareholders’ investments in Grimsel 4 even in the event of any reversion, and there is no need to wait for the concession renewal before making a construction decision. If the concession is reawarded to KWO, the amortisation agreement will become obsolete. The Grand Council of the Canton of Bern will consider this agreement in the spring session of 2026.

Why flexibility is the key to security of supply

The energy transition is bringing new instruments – from large-scale batteries to intelligent consumption management. At the same time, proven flexibility is more important today than ever before, especially from hydropower. Pumped-storage power plants such as Grimsel 4 can respond to fluctuations in the electricity system within minutes and reliably balance production peaks from solar and wind energy.

A stable energy system requires a combination of proven and new flexibility solutions. BKW, as the largest shareholder of KWO, markets its share of the flexibility of the Grimsel power plants. Its trading floor is staffed around the clock and ensures that this valuable flexibility is used optimally, helping to keep the system in balance – for security of supply in the canton of Bern and throughout Switzerland.

Hydropower: a value that endures for generations

For projects such as Grimsel 4 to be implemented, long-term planning certainty is needed. With amortisation agreements, the canton can support the implementation of the KWO expansion projects. This means that investments in the expansion projects are protected even in the event of future shifts in ownership shares or reversions. This is important because hydropower plants endure for generations.

For the long-term safeguarding of hydropower in the Canton of Bern, the Hydropower concession strategy is central. It defines what will happen after the KWO overall concession expires at the end of 2041. The strategy creates clarity and planning certainty – and thus the basis for rapid implementation of the KWO expansion projects.

The cantonal government is currently revising the concession strategy. BKW advocates targeted strengthening of Bernese stakeholders in KWO. It is now up to politicians to create clarity. With a forward-looking hydropower policy, the Canton of Bern can not only shape the energy transition, but also secure more added value for the canton – while at the same time strengthening security of supply for future generations.

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