Avenir Suisse calls for EU electricity agreement and new financing
Published: Tuesday, Nov 7th 2023, 06:11
Updated At: Wednesday, Nov 8th 2023, 00:53
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The liberal think tank Avenir Suisse advocates an electricity agreement with the EU and a new financing model with regard to security of supply. Instead of subsidies for renewable energies, it proposes the consistent pricing of CO2 emissions.
A stable, affordable and yet climate-neutral energy supply is no easy task, Avenir Suisse admitted on Tuesday in the conclusions of the study. With 41 cross-border power lines, Switzerland is more closely integrated into the European market than any other country.
However, it has little say in the matter. According to the think tank, prices for consumers are rising because it has to compensate for unplanned electricity flows and the threat of import restrictions at home.
This is why Switzerland must at least conclude technical agreements to stabilize the Swiss electricity grid, as Avenir Suisse demands. However, these could not replace the medium-term conclusion of an electricity agreement with the EU.
To achieve the climate targets, the think tank proposes moving away from subsidies. It would be better to achieve cost transparency by setting prices for CO2 emissions.
Contracts for difference as an investment stimulus
Investments in security of supply could promote new financial constructs, namely contracts for differences (CFDs). In the case of electricity, producers and investors or buyers would agree a price by means of a CFD.
If the price is lower at the time of purchase, the investor/purchaser pays the difference to the producer. If the price is higher than the agreed price, the producer pays the difference to the buyer. This protects producers against low prices and buyers against high prices.
Other proposals include bringing water rates closer to the market, opening up to foreign investors and liberalizing the electricity market. Until a certain level of security of supply is achieved, landscape protection should take a back seat. Avenir Suisse wants to keep nuclear power plants on the grid as long as their operation is safe and economical. In addition, the affordability of electricity should be guaranteed.
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