Swiss electricity cross-border trading could be curtailed from 2014 - Alpiq
Swiss wholesale power traders face the risk of being barred from trading the cross-border intraday and day-ahead market from the start of next year unless the country's electricity and gas markets are fully liberalised.
Swiss utility Alpiq fears that an electricity accord between Switzerland and the EU can only be signed if Switzerland fully liberalises its power market, it said in a statement on Thursday. However, this looks likely to be delayed until 2015 or 2016 instead of 2014 (see EDEM 27 July 2012). In July, the International Energy agency already urged the country to deregulate end-user prices by 2015 (see EDEM 4 July 2012).
"It is scarcely realistic to assume that a reliable import policy can be pursued without political acceptance on the part of the EU," Alpiq said in the statement. But the utility also urged that such an agreement should not be concluded at "any cost".
The European Commission confirmed that an accord was needed, given the target of market integration by 2014.
"The EU will continue discussions in the field of electricity and remains interested and optimistic about finding a solution for the remaining problems."
"However, participation in internal electricity market as today by just maintaining the status quo without agreeing on institutional mechanisms may become difficult in a harmonised electricity world by 2014," the European Commission spokeswoman for energy said in an emailed statement on Friday.
Both the EU and Switzerland have a great interest in transferring power across their borders.
Last year, Switzerland's net imports from Germany totalled 6.1TWh, according to ENTSO-E data, equivalent to an hourly average of 700MW. Germany exported 7.5TWh to Switzerland during 2012, while Switzerland exported 1.4TWh in the reverse direction.
Switzerland also benefits from Germany's cheaper power prices (see graph). The average traded level for the front month in 2012 was €50.86/MWh, while ICIS assessed the German front month at an average of €44.73/MWh.
Swiss pump storage capacity plays an integral part in Germany's plans to expand its renewable power generation as they would act as a battery for excess electricity (see EDEM 17 May 2012).
Switzerland therefore plays an important part in the stability of the European grid, a spokesman for domestic rival BKW said.
"We don't expect that such measures [blocking Swiss power traders] will be taken," he said. "We expect that an amicable solution can be found."
The European Commission and the Swiss authorities were unavailable to comment as ICIS went to press.
As Switzerland is looking to transform its energy system phasing out nuclear power until 2035, it is likely to increase its own share of intermittent solar and wind-power generation, making the need for cross-border flows more pressing to balance renewable production.
On Thursday, BKW reported that its 50 wind, biomass, solar power as well as small hydro plants generated 67GWh electricity in 2012, 31% more than the year before. MD
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