Swiss electricity prices are poised for a modest drop, driven by DETEC’s decision to lower the capital cost rate for electric grid investments, benefiting mainly large corporations.

Swiss electricity prices are set to see a slight reduction in 2025. This forecast comes as the Department of Energy’s move to cut the average capital cost rate for electric grid investments. The focus is more on the relief for larger companies than for private households.

The Department of the Environment, Transport, Energy and Communications (DETEC) has announced a reduction in the weighted average cost of capital (WACC) by 0.25 percentage points, bringing it down to 3.98% for the 2025 tariff year.

This adjustment is expected to decrease grid usage revenue by approximately CHF 29 million in 2025, contributing to a slight easing in electricity prices.

Despite this positive development, the average Swiss household might not feel a significant impact. The effect on larger corporations is predicted to be even less pronounced.

This comes in the wake of an estimated 18% increase in electricity prices for the current year by the Swiss Federal Electricity Commission Elcom, translating to an additional cost of around CHF 200 per household.

The WACC’s calculation method, as outlined in the Electricity Supply Ordinance, is under review. Any adjustments will align with the enactment of the Federal Act on a Secure Electricity Supply with Renewable Energies. However, the timeline for these changes to influence the 2025 tariff year remains uncertain.

Grid usage costs, as highlighted by Uvek, form a crucial component of the overall electricity price. These costs encompass grid amortization, operating expenses, and assumed interest. Public sector grid operators are typically entitled to a return on the capital invested in existing or new electricity grids.

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