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28 October 2019
On 27 September 2019 the government confirmed its proposal to fully liberalise the Swiss electricity market. This liberalisation will be accompanied by measures which strengthen domestic renewable energies and improve supply security. It is now up to the Federal Department of the Environment, Transport, Energy and Communications to submit a discussion paper to the government setting out the key parameters for such liberalisation and additional adjustments to be made to the Electricity Supply Act (eg, drafting a respective amendment to the Energy Act).
Switzerland has a secure and cost-effective energy supply. However, until now, only large-scale consumers (ie, those with a yearly consumption of at least 100,000kWh) have been allowed to opt into the free market. This equates to approximately 1% of all electricity consumers – the remaining 99% cannot choose their own electricity supplier under the current legal framework.
The government's proposal to liberalise completely the domestic electricity market is not a novel proposition. In fact, such liberalisation should have occurred five years ago. However, due to the extensive works on the Energy Strategy 2050 (which was decided after the Fukushima reactor disaster), the liberalisation was put on hold. Finally, in 2018, during the consultation on the revision of the Electricity Supply Act, the government came back to this issue and proposed to complete the liberalisation of the domestic electricity market.
The consultation process to revise the Electricity Supply Act has resulted in the majority of participants favouring the full liberalisation of the electricity market. However, a significant number of participants called for accompanying measures in the form of additional investment incentives for domestic renewable energies to strengthen the security of supply and achieve the objectives of the Energy Strategy 2050.
Based on this outcome, on 27 September 2019 the government confirmed its policy decision of liberalising the domestic electricity market. In addition, it instructed the Federal Department of the Environment, Transport, Energy and Communications to submit a consultation draft on the revision of the Energy Act, taking into account the results of the consultation process.
Switzerland has been negotiating a bilateral electricity agreement with the European Union since 2007. Although such an agreement would give Switzerland access to the EU electricity market, it must first liberalise its domestic electricity market.
As Switzerland's integration into the EU electricity market is crucial for securing its domestic energy supply in future, the liberalisation of its electricity market is inevitable.
For more information please contact Marcel Meinhardt at Lenz & Staehelin by telephone (+41 58 450 80 00) or email (email@example.com). The Lenz & Staehelin website can be accessed at www.lenzstaehelin.com.
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