Swiss-EU electricity agreement: answers to key questions

What is BKW's position on the planned electricity agreement between Switzerland and the EU?

BKW supports the conclusion of an electricity agreement between Switzerland and the EU. An electricity agreement will bring Switzerland greater security of supply and more innovation in the electricity market. Switzerland’s electricity grid is already technically very strongly integrated into the European electricity grid today. With an electricity agreement, this technical integration will also gain a stable legal basis in the long term. At the same time, the basic supply for private customers will be maintained. BKW will comment on the proposal in detail as part of the consultation process that has been launched. This runs until 31 October 2025.

What are BKW's arguments in favour of such an electricity agreement?

An electricity agreement between Switzerland and the EU significantly improves Switzerland's security of supply. With an electricity agreement, Switzerland is fully integrated into the European electricity grid, which increases grid stability. Such an agreement also secures the necessary capacity for electricity imports into Switzerland – particularly during the winter months, when Switzerland depends on imports. The Federal Electricity Commission (ElCom) has made it clear that, without an electricity agreement, Switzerland will need significantly larger reserve power plants in future than it would with such an agreement. The electricity agreement therefore enables a reliable and economical electricity supply for Switzerland.

The full market opening associated with an electricity agreement enables all consumers to choose their electricity supplier freely. A competitive market also promotes innovation and the efficient integration of renewable energies into the overall system.

What impact will the electricity agreement have on private customers who currently have to obtain their electricity via the statutory regulated basic supply?

The electricity agreement and the associated opening of the electricity market will not lead to the abolition of the basic supply. It will continue to be available to all households and small businesses (consumption 50 MWh per year) that wish to use it. It will also be possible to return to the basic supply. This gives all customers the freedom to choose between the free market, with its opportunities and risks, and a regulated basic supply. The opening of the electricity market has no direct impact on the electricity price for customers on the basic supply. Rather, with the electricity agreement, Switzerland can continue to decide for itself how the price in the basic supply is set. This is the subject of political debate.

What will happen to electricity prices?

A look at Switzerland’s neighbouring countries shows that electricity prices in the liberalised markets there are not systematically higher. On the contrary, an electricity agreement between Switzerland and the EU has a dampening effect on end-customer prices: Switzerland needs fewer expensive reserve power plants because it does not have to prepare for longer-term restrictions on imports. In addition, it will have to take emergency measures to stabilise the grid less often, which also has a price-reducing effect.

Will the opening of the electricity market have a negative impact on the expansion of renewable energies?

No. On the contrary, BKW assumes that the opening of the market will have a positive impact on the expansion of renewable energies. It will now be possible for all customers to choose their electricity suppliers freely and thus focus more specifically on renewable energies. These are already often the most cost-effective way of realising additional energy generation capacity. This will be the case even more often in future. This is influenced, among other things, by the fact that the energy price is made up of several factors, with incentive taxes playing an increasingly important role (such as the CO2 price). Support measures also influence the decision to expand renewable energies. These can continue to be used as an incentive instrument even if the electricity market is opened up.

A look at the EU essentially shows that renewable energies are also being expanded in a competitive electricity market. Although the market has been fully liberalised since 2007, expansion is progressing even faster in many areas than in Switzerland. The opening of the electricity market does not hinder the expansion of renewable energies; there is a strong willingness to invest. Rather, it is the lengthy approval procedures and the many objections that are blocking expansion.

What are the disadvantages if there is still no electricity agreement between Switzerland and the EU in future?

Without an agreement between Switzerland and the EU in the electricity sector, there is a risk that Switzerland will increasingly be excluded from bodies, trading platforms and coordination measures for secure grid operation. The result of this is potentially reduced import capacities and increasing unplanned electricity flows through Switzerland. This jeopardises security of supply, grid and system stability, and has a negative impact on the economic operation of domestic generation plants and thus also on the economy. In addition, the costs are high if Switzerland has to build up additional reserve capacities due to the lack of an electricity agreement.

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