Federal Council rushes to draft emergency plan for energy in Switzerland
Due to the high price of energy in Switzerland, the Federal Council has decided to create an emergency rescue package for utility providers. In a statement, the council noted that the failure of one large company could cause a chain reaction and jeopardize Switzerland’s already fragile energy supply.
Treacherous economic conditions in the energy sector in Switzerland
The war in Ukraine, and subsequent sanctions placed on Russia by Switzerland and the rest of Europe, have led many countries to try and wean themselves off gas and oil imports from Russia. This has led to high price fluctuations in the energy market, including in Switzerland.
In a statement on Thursday, the Federal Council said that the current treacherous economic conditions meant that electricity companies must secure their finances. To avoid any major international company going bankrupt, the Federal Council has announced that it is creating a “rescue package for system-critical electricity companies.”
Emergency energy laws to be passed by Swiss parliament in summer
The laws will be urgently discussed in parliament during the summer and will come into force immediately after passing. The Energy Minister, Simonetta Sommaruga, told the media in Bern that the emergency legislation will last for four years.
She said, "We have to be prepared for the worst case, which hopefully will never occur." Already, Alpiq, a Swiss energy company, had to create a cash buffer to avoid bankruptcy at the start of 2022.
What is the Swiss government doing to avoid an energy crisis?
While the contents of the law are yet to be finalised, Sommaruga revealed that the law would require “system critical companies” like energy providers to ensure their financial stability. The government is also planning a system of loans and financial incentives in the event of a bankruptcy, although Sommaruga said that these will be “subject to strict conditions and unattractive” in order to prevent a false subsidy.
Sommaruga made it clear that "waiting is not an option for the Federal Council." Already, nations like Austria and Germany are taking steps to guarantee their energy supply, with Sommaruga noting that “the situation is serious.”