Introduction

A consultation on the revised Electricity Supply Act has shown that a majority of people support a full market opening, but that more incentives for investment in domestic renewable energies and planning security are desired. The amendments envisaged by the Federal Council will enable Switzerland to:

  • increase electricity production from renewable energies (Energy Act);
  • better integrate such electricity into the electricity market; and
  • strengthen its supply security (Energy Supply Act).

The amendments to the law also serve to achieve Switzerland's climate targets.

Electricity Supply Act revisions

The aim of the revised Electricity Supply Act is to adapt the regulatory framework in accordance with both the Swiss Energy Strategy 2050 and the European electricity market. The integration of renewable energy into the electricity market will be improved by, among other things, strengthening the country's decentralised electricity production. Further, any solar energy produced in surplus can be sold in the end consumer's neighbourhood. Consumer protection will be improved by increasing the transparency of advertising offers. For example, the Federal Council can require electricity suppliers to provide certain information on the origin of electricity.

The revised Electricity Supply Act focuses on the following areas, among others:

  • The revised act would allow households and small businesses to freely choose their electricity supplier; currently, only large-scale consumers (ie, over 100,000kWh per year) can do so. Households and small businesses have the right to remain in basic supply and may switch from the free market to basic supply at the beginning of each year. In basic supply, local low-voltage grid operators offer standard electricity consisting exclusively of domestic and predominantly renewable energy.
  • Local electricity distribution network low-voltage operators must provide basic supply customers with electricity from Swiss renewable energy sources. A guarantee of origin will be required.
  • The revised act provides for the creation of a storage reserve to safeguard short-term supply security in the event of extraordinary and unforeseeable circumstances (eg, the weather, technical problems, market failures or political intervention abroad).
  • The Swiss Federal Electricity Commission (ElCom) started to measure and analyse the performance of low-voltage distribution network operators in 2016. Thus, the revised act allows consumers to compare suppliers directly, thereby enabling suppliers to continuously improve their performance.
  • A regulatory sandbox will be created in which it will be possible to deviate from the specifications of the act within a limited framework in order to test innovations in pilot projects and conduct field tests.

Energy Act revisions

The Federal Department of the Environment, Transport, Energy and Communications has submitted a consultation draft on the revision of the Energy Act on behalf of the Federal Council. Among other things, the draft intends to strengthen competition in the solar sector and focus on domestic hydropower supply security. One-off governmental subsidies for large photovoltaic systems will be replaced by contributions based on tenders (auctions). Under this new regime, the contract will be awarded to the producer which generates solar energy at the lowest cost. In terms of subsidies, important hydropower plants (eg, those with a large additional annual production or substantial storage expansion or which make an important contribution to winter production) can be prioritised.