Return of concessions – Alpiq, a leading industrial player

Between the Orsières and Niollet plants, Forces Motrices d’Orsières produces approximately 110 GWh a year, which is enough to supply 24,500 households with electricity. From 2027, the company will be jointly owned by Alpiq, the Canton of Valais (30%), and the granting municipalities of Liddes and Orsières, which will retain 60%. 

This acquisition is a significant achievement for Alpiq. Amédée Murisier, Head of Switzerland at Alpiq, explains why. 

Why is it so significant for Alpiq to have been chosen as a partner for the new concession of Forces Motrices d’Orsières?

The decision by Liddes and Orsières to sell 10% of FMO to Alpiq confirms that we are able to deliver solutions to the granting municipalities and that we have settled on an attractive model – for us as well as them. This decision is also a vote of confidence. We have a long-standing relationship with the Municipality of Orsières, which is also granting for some of the water in the Emosson dam, in which Alpiq is a 50% shareholder. I am delighted that we have acquired these two municipalities as partners, and that Alpiq will be able to share its wealth of experience in the field of hydropower. 

Finally, having a presence in several facilities that produce electricity with water from the Dranse river will enable us, together with our partners, to develop measures to optimise the use of the water, from Grand-Saint-Bernard to the Rhône.  

What is the recipe for your success? 

Alpiq’s tender convinced the granting municipalities with its collaborative and innovative approach. The company has committed to paying half of the concession sale price at the start of 2027. It will pay the municipalities an amount equivalent to at least the remaining half in the form of resource rent. This means that, each year, Alpiq will pay an agreed percentage of its annual earnings corresponding to its holding. This arrangement will enable the municipalities to manage the potential risks of managing a hydropower facility over the long term, and also to benefit from the opportunities – i.e. uncapped earnings – that it will generate on the basis of electricity prices on the markets. It is an innovative approach that will enable Alpiq, for the first time, to become a partner in a facility in which it did not initially hold a stake. 

Will Alpiq replicate this strategy elsewhere? 

The concessions of multiple hydropower facilities in Valais and elsewhere in the Alps, particularly in Grisons, will expire over the next two decades. Cantons such as Valais have established strategies calling for these facilities to be majority public sector-owned when the existing concessions expire. It is important for us to maintain a diversified hydropower portfolio, currently comprising storage, pumped storage and run-of-river power plants, in different regions of Switzerland. This portfolio can consist of facilities owned by Alpiq, such as FMO, as well as contracts with owners, for example public institutions. 

Where we believe we could help to develop a facility and integrate it in our portfolio, we are keen to work with the granting municipalities to explore how we could participate in a renewed concession, and demonstrate the benefits we could deliver to the municipalities. The arrangements will need to be adapted to each individual situation and the needs of the granting municipalities. 

Further information: Alpiq acquires 10% of Forces Motrices d’Orsières SA