Impending energy emergency: For Switzerland, it’s about the whole

AIn Switzerland, too, energy could become scarce next winter. “It’s all at stake now,” the Swiss Energy Minister, Simonetta Sommaruga, recently warned in order to shake up companies and the population and prepare them for a possible gas and electricity shortage. At first glance, the situation in Switzerland does not look so bleak compared to other countries: it generates a large part of its electricity with hydropower. In addition, the country is significantly less dependent on gas than Germany: only 15 percent of total energy consumption is attributable to this energy source.

The problem, however, is that the Swiss energy supply is sewn to the brim. Especially in winter, the capacities are not sufficient to cover the demand. Then the country is dependent on electricity imports from abroad, especially from Germany and France. The anxious question is: Will and can the neighbors continue to deliver? Should President Putin continue to turn off the gas tap, they will ultimately need every kilowatt hour themselves to keep the economy running.

Switzerland has failed to build natural gas storage facilities

At the end of May, Sommaruga agreed with Federal Minister of Economics Robert Habeck to start negotiations on a so-called solidarity agreement. The goal: In the event of a gas shortage, the two countries should support each other. Switzerland is including its transit pipeline, through which gas flows from Germany to Italy, in the negotiations. The pipeline could also be used in the opposite direction for deliveries from liquid gas terminals on the Mediterranean coast to Germany. However, experts doubt that this is a really strong trump card for Switzerland. It would be more valuable if the Confederates – like the Austrians – had their own natural gas storage facilities. But there are just as few of those in Switzerland as there are gas-fired power plants. This investment failure could now take revenge.

The impending emergency in the energy supply is largely self-inflicted. Long before Putin’s attack on Ukraine, leading industry representatives were warning of possible gaps in the power supply, especially since the Swiss nuclear power plants will sooner or later have to go offline following the popular vote. Nevertheless, politicians failed to set the course for an accelerated expansion of generation capacities. When it comes to renewable energies from wind and sun, Switzerland lags far behind most countries in Europe. This is due to the lengthy, multi-stage approval process and the far-reaching objection rights. It often takes 20 years for a wind turbine to go into operation. The construction of new solar and hydroelectric power plants is also of little interest to investors because of the incalculably long approval procedures and the comparatively unattractive public funding.

The Federal Council, as the government in Bern is called, now wants to improve the framework conditions and accelerate the procedures. However, in Switzerland’s complex and sluggish semi-direct-democratic political system, this cannot be achieved overnight. In the short and medium term, the country is dependent on the goodwill of its European partners in order to counteract a possible electricity shortage. But the Federal Council severely upset them last year by breaking off negotiations on an institutional framework agreement with the European Union. This also blocks the way to an electricity agreement with Brussels, which Switzerland now needs more urgently than ever. Without such an agreement, it remains excluded from the system of market coupling, which enables transmission capacities to be used efficiently across national borders. In addition, from 2025 onwards, the EU network operators are obliged to keep at least 70 percent of the capacities relevant for cross-border trade free for the European internal market. This limits Switzerland’s import ability.

The Swiss would do well to put aside their concerns about the framework agreement and shake hands with the EU Commission. However, in view of the opposition from left and right, the multi-party government’s willingness to compromise is still limited. It may first take an energy emergency and the resulting economic crisis to shake up the Federal Council and Parliament. It really is all about it.