Business and the population have to adjust to the fact that there will not be enough electricity and gas available in the coming winter. The federal government and the industry are taking precautions. But many factors cannot influence it.
Nobody knows whether the measures planned for the coming winter will be sufficient, Energy Minister Simonetta Sommaruga told the media on Wednesday.
Energy Minister Simonetta Sommaruga’s appeal was urgent. Everyone would have to work together, “because now it’s about the whole thing”. By that she meant a shortage of electricity and gas, which could hit the economy and society very hard. In concrete terms, a shortage means that companies and service providers receive less gas than they need. Companies are forced to reduce or stop production altogether. The Swiss industry is less dependent on gas than the German one. Nevertheless, according to industry associations, a severe gas shortage would threaten the existence of the majority of companies. Private households, hospitals and retirement homes would not be affected by a quota. In the case of electricity, this can mean that companies and households are temporarily disconnected from the power grid.
Gas supplies are still safe, said Sommaruga. No one can say whether the planned measures will be sufficient for the coming winter. There are no certainties. Together with Economics Minister Guy Parmelin and representatives of the electricity and gas industries, she wanted to convey this message: The situation is serious, but there is still no reason to panic: “We have been preparing for the crisis since the beginning of the year.” It is the task of the Federal Council to prepare the public for situations in which drastic measures would be necessary, said Parmelin.
Anxious waiting for the end of July
A lot will depend on whether the Nord Stream 1 gas pipeline will be back on the grid around two weeks later after the scheduled maintenance in mid-July. The German government fears that the Kremlin could extend the hiatus indefinitely under a technical pretext. If the gas flows from Russia back to Europe after the maintenance is completed, even to a reduced extent, as is currently the case, Switzerland should come through the winter reasonably well. Martin Schmid, President of the Association of the Swiss Gas Industry, assumes this.
However, he also sees the risk that from mid-July no more natural gas will flow westwards from Russia. If Putin wants to put even more pressure on the EU countries with gas, then he now has more leverage than he had in the autumn or winter, when Europe filled up its gas storage facilities.
Because Switzerland does not have its own gas storage facilities, it is completely dependent on imports. Up to three quarters of gas deliveries to Switzerland are made via Germany. Switzerland would also be affected by gas bottlenecks in the EU and especially in Germany. The industry is therefore trying to find alternatives in consultation with the Federal Council. So far, just over half of the planned physical reserve of 15 percent of annual gas consumption has been booked in the French gas storage facility near Étrez near Lyon. This is secured by a state treaty between Switzerland and France. Schmid was confident that the neighboring country would stick to it even in the event of a crisis. Options are to be purchased for a further 15 percent of annual consumption.
These options are likely to cost between CHF 500 and 800 million, which will continue to drive up gas prices for end customers. At the same time, the prices offer incentives, especially for private households, to use gas sparingly. Every kilowatt hour of gas saved helps fill European storage facilities for the winter, said Parmelin. At the start of the heating season, the federal government will launch a campaign aimed at the population and business, which will provide information on simple savings measures. The economy demands more speed: The campaign should be started now.
Great social damage
If, despite the precautions taken, the situation continues to deteriorate, additional measures will be taken in stages. For example, the Federal Council can order that indoor swimming pools may only be heated at a reduced rate. Or companies with dual-fuel systems are obliged to switch from gas to heating oil. If the gas deficit continues to increase, i.e. the difference between supply and demand is more than 20 percent, quotas will be imposed as a last resort. Different parts of the country could be affected differently, which, like the pandemic, is likely to become a stress test for national cohesion. At the end of August, the Federal Council will discuss exactly how quotas should be set in the event of a crisis.
The business umbrella organization Economiesuisse warns: Gas rationing would result in major social damage. It must be a priority to prevent plant closures and any job losses.
The situation is also tense when it comes to electricity. Because only around a third of French nuclear power plants are running, imports from France are restricted. In the event of a cold spell, France itself is likely to be dependent on electricity imports. In addition, according to current forecasts, the Swiss reservoirs will be filled to a level well below average by the end of the season. “We have to prepare for a power shortage,” said Werner Luginbühl, President of the electricity regulator Elcom. In the worst case, electricity is also subject to quotas for large consumers and cyclical shutdowns. The power supply for certain companies and households would be interrupted for a few hours on a rotating basis. Here, too, the federal government and the electricity industry are trying to prevent the worst scenario with austerity appeals.