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HomeTradingSwitzerland quits electricity market integration with EU jeopardising security of supply

Switzerland quits electricity market integration with EU jeopardising security of supply

On 21 September 2021, Switzerland has quitted the last bit of electricity market integration with European Union countries. Therefore, market participants will need to estimate and buy cross-border capacity additionally to the electricity – which will inevitably lead to inefficiencies and overall welfare losses. This will, in the end, result in higher prices for end consumers in both Switzerland and the surrounding EU countries.

The end of the coupled Intraday auctions marks a further crucial step of a disintegration process which happens due to a missing electricity agreement between Switzerland and the EU, which would give Switzerland equal access to the EU Internal Energy Market.

The Swiss transmission grid is part of the European interconnected grid (the Continental European Synchronous Area) and today, Switzerland shares 41 interconnectors with its neighbours. Despite this, Switzerland is neither part of the Single Day-Ahead Coupling nor of the Single Intraday Coupling, although the country, being in the geographical heart of Europe, is a central platform for the EU Internal Energy Market from a physical point of view.

In short, the achievements and the benefits of the European Union Internal Energy Market – and to a certain extent, grid stability and security of supply – are put at risk by the missing electricity agreement between the EU and Switzerland. The achievement of climate neutrality is a declared goal of both the EU and Switzerland. The European Power Exchange (EPEX SPOT) therefore would welcome a new prioritisation of the electricity agreement by all involved stakeholders.

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