Energy – an intensive trade

A dam
A dam © FDFA, Presence Switzerland

The EU and Switzerland have traded electricity intensively for decades. As European energy markets have previously been clearly nationalized, an EU single market for energy has emerged over the last few years. Therefore the legal and economic reality of the energy markets surrounding Switzerland changes. An energy agreement with the EU is intended to allow both full access for Switzerland to the single market for energy and ensure cooperation in this sector with the EU in the future.

The EU aims to create a low-emission, competitive and safe energy supply. This will require far-reaching changes in current structures. Electricity is being produced increasingly from renewable sources of energy. Because sun and wind are not always available when the consumption increases, more flexibility and interconnectivity are needed. With its single market, the EU wants to ensure that those challenges are met across borders and cost-efficiently.

Physically, Switzerland is perfectly connected into the European electricity network. Since the synchronization of the French, German and Swiss electricity networks in 1958, our country plays an important role as an “electricity hub”. Around 10% of the continental European cross-border electricity passes through our territory. Economically speaking, both Swiss consumers and producers profit significantly from this integration, as energy supply becomes safer and cheaper. On the other hand, Switzerland contributes to achieving the EU’s energy and climate policy objectives with its’ hydroelectric power plants and power supply lines.

An energy agreement between Switzerland and the EU

Although Switzerland is physically well integrated in the energy landscape continental Europe, the EU energy single market changes the legal and economic reality for Switzerland. In order to react accordingly and because both sides profit from the exchange of energy, the EU and Switzerland are currently negotiating an agreement on energy. The aim of the agreement is to build a secure, market orientated, efficient and sustainable energy supply. The negotiations cover mainly the following aspects: equal, free and fair market access, common application of rules in the field of electricity for all stakeholders involved, fair competition, integer and transparent wholesale trade in electricity, electricity infrastructure (in particular transmission networks and cross-border connecting cables), cross-border energy trade, promotion of renewable energy, environmental protection in the electricity sector, state aids as well as cooperation between contracting parties, authorities and institutions.

More information regarding the negotiations can be found hereunder in the “links” info box.