Energy – an intensive trade

A dam © FDFA, Presence Switzerland

The EU and Switzerland have traded electricity intensively for decades. A new legal reality has emerged in the last few years with the EU single market for energy. An energy agreement with the EU is intended to ensure 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 sector by 2050. This will require far-reaching changes in current structures. Electricity is increasingly being produced from renewable sources of energy and usually in Europe’s peripheral regions. For this reason, a restructuring of the European electricity grid is necessary since electricity must be produced decentrally and transmitted over long distances to Europe’s major cities. Supply security must be safeguarded, which means that there will be a need for energy storage capacities, particularly with the increasing use of renewable sources that produce irregular volumes of energy.

Switzerland’s mountains offer an optimal starting point for storing energy. With pumped storage power plants, surplus energy supplies can be stored in mountain reservoirs for later use as required. In this way Switzerland can act as a battery for Europe and contribute to achieving the EU’s energy and climate policy objectives.

In the 1950s, the French and German electricity networks were synchronised via Switzerland. This marked the birth of the European electricity transmission network. Since then, Switzerland has been a major electricity transit country with about 10% of the continental European cross-border electricity passing through Swiss territory.

An energy agreement between Switzerland and the EU

Due to Switzerland’s physical integration in the European continental energy landscape and the existing synergies in electricity trading, the EU and Switzerland are currently negotiating an agreement on energy. The aim of the agreement is to build a legal basis for their existing close cooperation and to establish a common basis for resolving any challenges that might arise in the future. In addition to the questions of market access and cross-border electricity trading, negotiations are taking place on the promotion of renewable forms of energy and transparency in the wholesale trade in electricity.

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