"When economic obligations systematically result in losses without those costs being recognized, a fundamental question arises: is this compatible with the economic freedom protected by the Constitution?" asks Michael Frank, CEO of the AES.
Switzerland is pursuing the ambitious objectives set by the Electricity Act and accelerating its energy transition. But this transition is not limited to developing renewable capacities and adapting our grids; it is radically transforming the way we must think about and manage our entire electricity system. Security of supply is a necessary condition for the energy transition.
A central area concerns the supply and billing of electricity as well as its organization. Since the energy crisis, DSOs must cover their needs in the long term and in a structured manner in order to minimize risks related to market prices and guarantee supply. However, this model only works if it allows for medium-term adjustments and short-term corrections, for example in the event of weather-related fluctuations or variations in demand.
Currently, this is not the case, because a high coverage rate precisely requires this flexibility: surpluses must be sold and shortages covered. This reality results from seasonal fluctuations, uncertainties related to forecasts, short-term consumption variations, or the increase in decentralized supply from renewable energies. Nevertheless, according to ElCom, these sales cannot be taken into account in basic supply, even though they stem directly from the obligation to supply.
DSOs are required to purchase, take back and, where applicable, resell electricity. These resales cannot be taken into account in basic supply tariffs. According to ElCom’s current interpretation, these resales are systematically excluded, even when they result from legal obligations.
Given that these sales often have to be made at prices below acquisition costs, this frequently leads to losses and we risk that this cash outflow will weaken security of supply, because investments in the national infrastructure are insufficient.
The Swiss electricity system must reconcile security of supply, profitability and respect for the environment. For this, regulation must follow the realities on the ground.
There is a price to pay: in 2024, Romande Energie reported 33 million in losses related to the buy-back of solar power; a figure comparable to that of other suppliers. This is neither speculation nor management errors, but the predictable consequences of a system that did not follow the market’s evolution. Do we really want to weaken our economy and impose losses on companies because of the increasing decentralization caused by renewable energies? Not to mention that this would also weaken investments in the country’s infrastructure.
When economic obligations systematically lead to losses without those costs being recognized, a fundamental question arises: is this compatible with the economic freedom protected by the Constitution? It undermines the constitutional principle of economic freedom and endangers the actors who are actively committed to the energy transition.
In its von Roll ruling, the Federal Supreme Court decided that a supplier must not systematically bear the losses resulting from a regulated activity. It is therefore essential that electricity for basic supply can be billed not only at purchase but also at sale. Otherwise, DSOs will be forced to follow an extremely cautious procurement strategy that is not in accordance with the law, mainly in the short term, resulting in a risk of high electricity costs for the Swiss population.
The energy transition requires clear and fair rules. Whoever demands long-term planning must also allow flexible adaptation, otherwise investments will be hampered, economic freedom restricted, losses recorded and the development of important infrastructure impeded. Consequence: unnecessary additional costs, including for consumers.
The Swiss electricity system must reconcile security of supply, profitability and respect for the environment. For this, regulation must follow the realities on the ground. The sector is committed to an objective, transparent and sustainable framework, in the interest of customers and suppliers.
Clarification of the attribution of legitimate resales is a long-awaited measure. It creates coherence, strengthens legal certainty and investment security, prevents unnecessary losses and lays solid foundations for the success of the energy transition.
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