The Energy Regulation and Markets Review - Stikeman Elliott

Switzerland
According to the Constitution, the Confederation is in charge of determining
the principles of the use of domestic and renewable energies, as well as legislating in
certain specific areas such as nuclear energy, hydropower generation and transmission
and delivery of electricity. Legislation concerning all other areas is to be provided by the
cantons. Consequently, energy can vary considerably among cantons.
At the federal level, the principal pieces of legislation are:
a Energy: Energy Act 1998
b Hydropower: Hydropower Act 1916
Water Protection Act 1991
d Electricity: Electricity Act on Electric Facilities for Low and High Voltage 1902
Electricity Supply Act 2007
e Nuclear: Nuclear Energy Act 2003
F federal Inspectorate Nuclear Security Act 2007
Liability in Nuclear Matters Act 1983
f CO 2
: CO 2
Emission Reduction Act 1999
g Pipelines: Pipelines Act 1963
The Federal Electricity Supply Act, which was adopted by Parliament in 2007, provides
for an opening of the market in two stages starting on 1 January 2009. In the first five
years (2009 to 2013), only end-consumers with an annual consumption of more than
100,000kWh per site are granted free access to the market. After this period, households
and other small-scale end consumers will be able to freely choose their electricity supplier.
Alternatively, it is possible to remain a ‘captive consumer’ and continue to purchase
electricity at capped prices. Full market liberalisation will be introduced on the basis of
a federal resolution, which will be subject to an optional referendum (therefore, there
is no certainty as to whether the second phase will become a reality). The high-voltage
network must be operated by the national transmission system operator (Swissgrid) with
a majority Swiss holding.
The main objective of market liberalisation – the creation of a competitive and
secure electricity supply with transparent pricing – has not been achieved to date. A
lack of market transparency, non-competitive behaviour by the involved players and
the continued threat of sharply rising electricity tariffs, endangering the international
competitive capacity of energy-intensive companies, indicate that a thorough analysis
of the applicable legislation is called for (Swiss legislators did not expect European
electricity prices to increase to a level that would make it more attractive to remain
captive than to purchase electricity at market prices). At the end of 2009, a revision of
the Act begun. It is expected that the EU 3rd Energy Package will be factored into the
revision. The introduction of incentive regulation is also being considered. The initial
aim of the revised Electricity Supply Act to enter into force in 2014, to coincide with the
second stage of market liberalisation, has been postponed (at least) for a year.
Since the end of 2007, negotiations between the EU and Switzerland to enter into
a comprehensive long-term energy treaty have been ongoing. The primary aim of such an
accord (obtaining this agreement is considered one of the top priorities for Switzerland)
would be the mutual access to the free energy market. The legal developments within
the EU will be taken into consideration, namely the 3rd Energy Package, in relation to
which Switzerland is aspiring to become a member of newly established organisations
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