Bottlenecks threaten in winter: electricity could become 20 percent more expensive

Bottlenecks threaten in winter: electricity could become 20 percent more expensive

After the turbulence in gasoline, oil and gas prices, now comes the electricity price hammer! From next year, consumers will have to pay much more.

The increase in wholesale prices will reach end customers in the basic service in 2023. According to a study by the Federal Electricity Commission (Elcom) on the expected development of prices and tariffs at 172 energy companies, tariffs are being increased significantly here.

Electricity price rises by 20 percent

On average, energy tariffs for actually delivered electricity are increasing by 47 percent! However, energy tariffs only make up a fraction of the electricity price – a good two-fifths for the average household. There is also a tariff for the use of the grid and political taxes, for example for the promotion of renewable energy.

Therefore, Elcom expects the price of electricity to rise from 21 to 25 centimes per kilowatt hour on average by 2023. Still a solid increase of a good 20 percent!

For a five-room household with an average annual consumption of 4,500 kilowatt hours, this means an additional financial burden of 180 francs per year, according to Elcom’s calculations. For companies, it really pours: with an annual consumption of 150,000 kilowatt hours, the additional costs are around 6,000 francs.

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It’s serious in September

The degree of tariff adjustment depends on the respective electricity supplier. Moreover, it is a preliminary assessment. In early September, the matter is serious – then Elcom will announce the final electricity prices for consumers.

Until then, there may still be changes. On the one hand, it depends on the further development of prices in the market. On the other hand, it also depends on an appropriate purchasing strategy and the energy company’s own production portfolio. For example, if cheaper electricity has already been purchased in the long run, this has a positive effect on energy tariffs. The same is true if the electricity is self-produced. There are also accounting options that absorb price increases.

An impending winter power cut

However, Elcom is not only worried about rising electricity prices, but also about the impending power shortage.

And that could hit us faster than we’d like: With security of supply in mind in the coming winter, Elcom speaks of “uncertainties”. And: Depending on development, “bottlenecks cannot be excluded”.

To be on the safe side, the Minister of the Environment SP Simonetta Sommaruga (61) wants to oblige hydropower plants to prepare a reserve from next winter. Storage power plant operators have to keep a certain amount of electricity for a fee, which can then be extracted when needed.

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Whether an emergency occurs already depends on various factors. In addition to the availability of domestic nuclear energy, export supplies from neighboring countries are decisive for the security of supply in the coming winter.

Hardly any nuclear energy from France

Much less electricity is expected from France than in other years as the rows of French reactors are currently closed. Accordingly, electricity imports from France should be “possible only to a very limited extent” in the coming winter months. In addition, prices in France for the winter of 2022/23 are already much higher than in Germany and Switzerland.

Switzerland’s import needs in the winter six months are a good four terawatt hours – and now this has to be covered mainly by imports from Germany, Austria and Italy. But here too, question marks arise as electricity production is heavily dependent on fossil fuels such as gas and coal. The Russian aggressive war in Ukraine has a particular impact on prices here.

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But there are also mitigating factors, as Elcom points out. The advantage is now the good availability of Swiss nuclear power plants. With prices remaining high, greater savings efforts can be seen especially in industry. And of course: preparatory work for the Strategic Hydropower Reserve is underway.

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The population wants security of supply

So let’s hope there is enough electricity from the socket next winter. Because when it comes to energy supply, the Swiss people’s priorities are clear, as a new study shows: security of supply is top priority, followed by climate-neutral energy production and affordable electricity prices.

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