The Swiss Times - Swiss News in English

Many uncertainties with regard to winter energy supply

  • By The Swiss Times
  • 6 November 2023

Contrary to the worst fears, Switzerland did not run out of energy last winter. And the situation has eased even further since then. Nevertheless, experts are not giving the all-clear for this winter.

Many uncertainties with regard to winter energy supply

Things are looking good at the moment: The supply of electricity, gas, heating oil and petrol in Switzerland is guaranteed. For example, all four Swiss nuclear power plants are connected to the grid and producing electricity, and the reservoirs are full in line with the long-term average. There are also currently no problems with the electricity supply in neighboring countries.

Switzerland can therefore enter the cold season much more relaxed than a year ago. “European gas storage facilities are almost completely full and the availability of French nuclear power plants is significantly better than last winter,” said the energy company Alpiq in response to an inquiry from the news agency AWP. At the same time, demand for electricity and gas has fallen significantly.

How cold will it get?

However, this does not mean that there might not be a shortage in winter. Experience from last year has shown how quickly assessments can change, according to Bern-based BKW, for example. “It is therefore definitely good that Switzerland has reserves for difficult situations with the emergency power plant in Birr, the hydropower reserve and the pool of emergency power generators.”

The situation on the electricity market remains fragile, also because it is closely linked to the European gas market, according to Alpiq’s experts. Supply shocks on the gas market could change the situation abruptly – for example through strikes or damage to the energy infrastructure.

Last but not least, demand in winter is also heavily influenced by the weather. So the question is: how cold will the winter be in Europe? Switzerland is dependent on electricity imports from abroad during the winter months. In an “icy” winter, “electricity could well become scarce”, says Tobias Habegger from BKW.

High nervousness on the market

The future course of the economy is also a question mark: it is not certain whether demand in Europe will remain depressed. Demand for gas in Asia, especially in China, could also increase due to an economic recovery. The supply of LNG could then become scarce in Europe, says Thomas Hegglin from the Swiss Gas Industry Association (VSG).

It also remains to be seen whether Russian gas will still flow to Europe in winter. According to Hegglin, it is currently around twelve percent. “Efforts to replace Russian gas are being driven forward in Europe and the LNG infrastructure is being continuously optimized, but this won’t happen overnight.” The coming winter will also be the first winter entirely without German nuclear power.

All this uncertainty is also reflected on the markets: “We are seeing a lot of nervousness and therefore high volatility in energy prices,” says Noël Graber from Axpo. The escalation of the Middle East conflict, for example, could be reflected in higher prices in the coming weeks, says Habegger from BKW. The conflict is overshadowing the “balanced” picture with currently above-average warm temperatures, high wind production, full gas storage facilities and high power plant availability.

Energy crisis not yet over

Although the market prices for electricity and natural gas are no longer at the extreme record levels of 2022, they have clearly retreated from these highs but are still higher than before the first very noticeable increase since autumn 2021. And with the start of the war in Ukraine in February 2022, prices continued to explode.

“Prices have stabilized at an above-average level compared to the years before 2021,” says the Association of Swiss Electricity Companies (VSE) with regard to the electricity market. However, a slight upward trend has recently become apparent again, presumably due to the war in the Middle East. However, the continued above-average prices are also an expression of the fact that “Europe has not yet overcome the energy crisis”.

©Keystone/SDA

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