Stability of the Swiss power grid
Concerns in Switzerland about the stability of the power grid are growing. Because the European Union will no longer recognize Swiss proofs of origin from July 1st. Risks of power outages are therefore worrying the Swiss after the EU upped the ante for a no-deal.
The small Swiss town of Laufenburg has been a symbol of the European electricity network since the networks of Switzerland, Germany and France were connected there in 1958. For more than 60 years, the “Laufenburg star”, as the substation is known, helped to ensure a stable electricity supply for Switzerland and the rest of Europe when electricity consumption rose sharply in the post-World War II period.
This star’s luster is now fading as Switzerland faces the threat of decoupling from the European electricity market. The power sector has become the latest battleground for the European Union, which wants to rein in the country after it refused in May to sign a framework agreement covering virtually all of its relations with the bloc.
Without such an agreement, Switzerland will not be allowed to participate in the so-called electricity market coupling in the region, and from July 1st its guarantees of origin, which prove that the electricity bought and sold comes from renewable energy sources, will no longer be recognized in the EU. Increasingly strained relations with Brussels are beginning to frighten the Swiss, leading to gallows humor over national blackouts. Even if large-scale blackouts remain unlikely, there are growing concerns that the dispute with the EU will ultimately lead to higher costs for Swiss people and companies.
The non-recognition of guarantees of origin means that Swiss electricity producers are losing money because the cross-border market for these tradable guarantees of origin has dried up. The electricity in the grid could come from non-renewable sources such as coal, gas or nuclear, so the certificates are used to showcase renewable energy production.
Swiss Energy and Transport Minister Simonetta Sommaruga said in June it was difficult to quantify the financial damage of non-recognition. Switzerland can still benefit from EU guarantees and the imbalance will lead to an oversupply of allowances in Switzerland, driving prices down, Axpo said.
This in turn could discourage electricity producers from investing in renewable technologies. Despite concerns, the interconnectedness of the net means Brussels can’t hit Switzerland hard without hurting itself. Because the Swiss import and export electricity from their neighbors. People can still get electricity by building solar panel generators.
Without an electricity agreement with the EU, there is more effort to ensure grid stability.
The impact on the electricity market is just the latest consequence of Switzerland’s failure to sign a framework agreement intended to replace bilateral agreements on everything from immigration to civil aviation. Switzerland says the deal threatens its sovereignty and ability to protect its labor market.
The EU has said that without a deal there will be no unhindered access to the single market, which, according to a 2019 calculation by the Bertelsmann Foundation, gives Switzerland a total annual welfare gain of 24 billion euros ($28.5 billion) – more than Germany per person.
Loss of privileges.
Fresh after Brexit, the EU has increasingly tightened its stance. In 2019, Brussels tried (unsuccessfully) to restrict trading in Swiss equities by denying regulatory equivalence to the Swiss stock exchange. Earlier this year, SBB was unable to participate in an EU research program, and in May 2022, Swiss medical device manufacturers could no longer freely export their products to the EU, as they have for years. Utilities could take one of the biggest hits.
“Switzerland will gradually lose its privileged connection with the EU electricity system,” the European Commission said in an email reply to questions. “Less connection and less cooperation will make the Swiss energy system less efficient and more expensive for Swiss consumers.”
Despite being a small country, Switzerland plays a key role in the EU’s electricity system through the solar panel lithium battery (such as 12v lithium battery, 24v, or 48v) it produces and the electricity that flows through its borders. By being excluded from the EU electricity market and its algorithm for calculating deliveries, Swissgrid AG fears that its grid – which is connected at 41 points by huge power cables, known as interconnectors, with which neighboring countries are connected – will lose stability over time . Key components could be overloaded by power surges if the supply unexpectedly flows across the country, the company said.
“It’s like a body whose heart is cut out,” says Eberhard Roehm-Malcotti, head of EU energy policy at Axpo Holding AG, Switzerland’s largest energy supplier. In addition, Switzerland is at risk of being cut off from the electricity supplies to neighboring countries, which it relies on during the winter months when energy demand skyrockets.
The Swiss energy producers are hoping for a technical agreement with the EU, even if the tricky question of market access has not yet been clarified.
Certificate issues.
“Then we would have a solution that is sustainable,” said Michael Frank, director of the Swiss Association of Electrical Companies. A stable power supply is “crucial for Switzerland as a business location”.
Blackout danger in winter?
Switzerland could resort to four-hour regional blackouts should the European energy crisis lead to power shortages in winter.
Switzerland is preparing for electricity and gas shortages due to the war in Ukraine, possible gas supply disruptions and the situation at nuclear power plants in France, although energy supplies are secure at the moment. At this stage, it is very necessary to buy some lithium phosphate batteries to build a off-grid solar system.
Measures to save electricity.
Switzerland is planning to take ever stricter measures to save electricity if necessary. Michael Frank, Director of the Association of Swiss Electricity Companies (VSE), said this at a government press conference in Bern. First, the Swiss government is calling for voluntary austerity measures. A public awareness campaign is also planned.
In a next step, the Swiss government could restrict non-essential uses such as the lighting of shop windows, the use of mobile heaters or lighting at night. Next, around 30,000 companies could be instructed to save up to 30% in electricity consumption in an extreme scenario. These first three phases could reduce electricity demand by 25-30%. As a last resort, Bern could switch off parts of the power grid.
“You have to think of it like a jigsaw puzzle. Individual segments would be turned off for four hours and then turned back on while others are removed. Some pieces of the grid – the pieces of the puzzle – would be without power for four hours, then again for four or eight hours long, depending on the situation,” said Michael Frank. Switzerland has opted for rationing because it wants to avoid a complete shutdown of the grid, as planned by France. “You can’t just flick a switch and then Switzerland is without electricity,” he said, adding: “If there’s a power outage, it hits everyone. It’s an illusion that there’s power outages in Switzerland, but elsewhere in “Let the lights stay on in Europe”.
Switzerland can also draw some consolation from the Brexit negotiations. Britain’s access to the EU energy market was part of divorce talks, with the threat of disruption being used as a bargaining chip in fisheries quota talks. In the end, Britain’s access to the energy market remained unchanged.
However, that does not stop the Swiss from dealing with the topic. When the lights went out briefly during a recent Bloomberg interview in Zurich, the newsreader said, only half-jokingly, “Ah, this is Brussels pulling the plug on us.”
