Switzerland’s electricity infrastructure has evolved significantly since its initial connection to Germany and France in 1958. With over 41 power lines linked to neighboring countries, a new electricity agreement with the EU is crucial for enhancing supply resilience and affordability. While negotiations face delays, stakeholders emphasize the importance of integration for stability and cost reduction. The looming EU directive raises concerns about Switzerland’s import reliability, highlighting the urgent need for improved production capacities to ensure energy security, especially in winter.
The Evolution of Switzerland’s Electricity Infrastructure
If the European electricity framework were personified, it would have reached its golden years by now. The journey began back in 1958 when the electrical networks of Germany, France, and Switzerland interlinked for the first time in Laufenburg, Aargau, laying the groundwork for a united electricity market that positioned Switzerland at its core.
Currently, Switzerland boasts over 41 power lines connecting it to neighboring countries. This physical and geographical integration is now on the brink of being formalized through a new electricity agreement, a key aspect of the negotiations concluded with the EU in December concerning their ongoing relations.
The Urgency of an Electricity Agreement
While discussions in Parliament regarding the contract package are not anticipated until 2026, the electricity sector is already in campaign mode for a crucial vote. Michael Frank, the director of the Swiss Electricity Companies Association, emphasizes that deeper integration into the European electricity market will enhance the resilience, security, and affordability of Switzerland’s electricity supply.
The EU’s stance is unambiguous: failure to reach an agreement would leave Switzerland with no alternative plan. Petros Mavromichalis, the EU ambassador to Switzerland and Liechtenstein, recently remarked at an industry conference in Bern that Switzerland must either endorse the electricity agreement or face treatment similar to other non-EU countries. “The opportunity for an electricity agreement won’t last indefinitely,” he warned.
The industry has grasped this critical message, with representatives expressing optimistic views on the negotiation outcomes. Former cantonal council member and Elcom regulatory authority president, Werner Luginbühl, noted his pleasant surprise at the achievements made by Swiss negotiators in the electricity sector.
Swissgrid, the grid operator, highlights the importance of legal certainty, underscoring that participation in the internal electricity market would allow Switzerland to partake equally in the formulation of new regulations, thereby averting discrepancies in legal frameworks.
Axpo advocates that the electricity agreement would lay the foundation for a secure energy future, as it would eliminate restrictions on border capacities from neighboring countries, thereby ensuring stability in electricity imports for Switzerland.
BKW has also indicated that an electricity agreement could lead to lower costs for consumers through two main avenues. Firstly, it would enable Switzerland to minimize its electricity production reserves due to stable border capacities. Secondly, comprehensive integration would decrease the likelihood of emergency measures being required to stabilize the grid.
Amédée Murisier, who heads the Switzerland division at Alpiq, asserts that the EU would also stand to gain from Switzerland’s integration, particularly as Swiss hydropower plants would be crucial in stabilizing the electricity grid. “Our power plants function like batteries, facilitating the integration of variable solar and wind energy into the energy system,” he stated.
In typical years, Switzerland generates less electricity during the winter months than it requires, necessitating imports to make up the shortfall.
Historically, Switzerland has not enjoyed equal standing within the EU framework, being excluded from certain trading markets and lacking representation in various technical cooperation bodies. The EU mandates comparable regulations for all its members, and the inability of Swiss consumers to freely choose their suppliers undermines the concept of a unified European electricity market.
Since 2007, numerous attempts have been made to finalize an electricity agreement between Switzerland and the EU. However, recent EU stipulations linking the agreement to broader institutional matters have complicated negotiations, resulting in a lack of concrete outcomes regarding the electricity agreement.
Now, the EU appears to recognize the necessity of making concessions to Switzerland if the agreement is to gain traction in public voting.
While the detailed negotiation text remains under wraps, the federal government has signaled potential changes for the Swiss electricity landscape if the agreement is ratified. The practical implementation of these principles, however, remains ambiguous, and specifics regarding consumer freedom to switch suppliers would require political determination within Switzerland.
But what happens if the electricity agreement falters?
Switzerland has much at stake. Further involvement in technical cooperation bodies would need to be evaluated independently, and it remains unclear how accommodating the EU will be in this regard.
Experts express concern over future supply security, particularly with a new EU directive set to take effect in 2026. This directive mandates that member states must ensure at least 70% of their network elements’ capacity is available for trade with other EU nations. The reliability of Switzerland’s electricity imports under these conditions remains uncertain, necessitating a rapid enhancement of its production capacities to avoid shortages during winter months.