The prices for private customers rise again significantly. There is no consensus on what to do about it.
Households in Switzerland cannot change electricity suppliers, such as health insurance companies, because the electricity market is not fully liberalised. Economists are convinced that liberalization would have great advantages. In politics, however, the project has had a difficult time for years.
Switzerland has around 600 energy suppliers, very small, but also large corporations, some with their own huge power plants, others who buy the electricity for their catchment area exclusively on the market. And they can sell this electricity to small and medium-sized consumers – including private households – at regulated prices. It is therefore not surprising that electricity prices vary greatly between providers. In 2024, electricity will cost up to five times more in one corner of Switzerland than in another.
Economist sees advantages in free choice
Economists like Stephan Vaterlaus from the consulting firm Polynomics see advantages in the complete liberalization. If all consumers were free to choose their provider, the pressure on suppliers to make better and cheaper offers would increase.
We shouldn’t liberalize the market like the Germans.
The prices would tend to fall, but above all the differences between the providers would become smaller. There would be a consolidation on the electricity market. The number of energy suppliers would tend to decrease significantly. You can see that in the surrounding countries, where the number of energy suppliers has fallen sharply as a result of liberalization, says Vaterlaus.
Political concerns from different directions
While there is a lot to be said for it from an economic point of view, the complete liberalization of the electricity market has not yet won a majority politically.
Only the FDP is unreservedly in favor of liberalization. The SVP is also in principle in favor of this, explains energy politician Christian Imark. At the same time, he adds: “We shouldn’t liberalize the market like the Germans do. That would not be a majority.”
The expansion of renewables must be guaranteed.
In fact, electricity prices in many European countries rose much more sharply in the past year than in Switzerland. However, environmental economist Vaterlaus emphasizes that this has nothing to do with liberalization, but rather with the fact that in Germany, for example, the price of gas has an important influence on the price of electricity.
Left conditions to liberalization
The SP and the Greens are against liberalization, as the Federal Council has been considering. Kurt Egger, Green National Councilor and also a member of the Energy Commission, believes that in the future he can only imagine complete liberalization under certain conditions: “The expansion of renewables must be guaranteed.”
While some fear that liberalization will bring even greater price shocks to households than today, others are only in favor of complete liberalization if rules are introduced on the market to ensure that only renewable electricity is consumed in Switzerland.
Only liberalization with restrictions would be politically capable of winning a majority. It remains to be seen whether this will then be considered sufficient by the EU for the conclusion of an electricity agreement. The EU is also currently revising the design of its electricity market.