PostedSeptember 15, 2022, 09:55
CommentElectricity, a public good as precious as water
In Europe, as in Switzerland, the electricity market needs a profound reform. Public authorities must regain control of this sector which has gradually escaped their control.
This electricity crisis must be the starting point for a new citizen reflection.
Getty Images
After years of overcrowding, the current crisis in the electricity market has opened up a vast debate in Bern around the aid to be granted to large companies. The underlying question is: but how did we get here? The responses were largely ideological. However, one of them seemed to prevail over the others: the electricity market is totally dysfunctional. As the President of the European Commission, Ursula von der Leyen, declared on Wednesday, this market, to which Switzerland is connected, needs “in-depth reform”.
Good weather, bad weather
Large companies, which see their electricity bills increase tenfold next year, have benefited for years from abundant supply on the open market. But the awakening is brutal, too brutal. The power exchange has shown that it works best in good weather, when supply and demand are in balance. In bad weather, when the supply began to decrease, the law of the market caused a potentially fatal runaway for healthy companies so far.
political power lost
Now is the time to look to the future with mechanisms that stabilize the price of this electricity, which is as vital as tap water in everyday life. Try to spend a day without using any electricity… This is also why, historically, the vast majority of production, transmission or distribution facilities belong to public authorities. However, the decision-making power of the owners – the power of politics therefore – has diminished with the construction of holding companies such as Alpiq or Axpo, which are the big players in the market that are currently weakened.
Powerless public authorities
In the field of electricity, a cat would not find her young there. Currently, for example, the City of Lausanne is a shareholder of EOS Holding SA, itself a shareholder of Alpiq Holding SA, whose head office is in Lausanne. The supplier Romande Energie Holding SA, whose main shareholder is the State of Vaud, is also a shareholder of EOS Holding SA. The city of Lausanne is also a shareholder of Romande Energie Holding SA. Despite the significant holdings of public authorities in these companies, they remain powerless against the Vaudois bill, which will rise by around 50% next year.
From 15 centimes to 1 franc
As the PS notes in a series of questions tabled on Wednesday: some of the KWh in Switzerland will be sold in 2023 at around 1 franc, while almost all of the Swiss electricity fleet produces at less than 15 cents per KWh. At the other end, there will necessarily be someone to collect, various intermediaries, but also public authorities through their dividends. They will therefore have to try to mitigate the rise in prices by reducing the taxes they levy on the kWh.
In Parliament, some have compared the electricity market to a casino, where gamblers have let themselves be carried away by an uncontrollable speculative spiral. In the ongoing reform process, the interests, security of the end customer and price stability must be the basis of all reflections and decisions.