Is it necessary to integrate Switzerland into the european electricity grid?

In practice, complete electricity self-sufficiency is not feasible for a small, landlocked country such as ours. Switzerland’s integration into the European electricity grid and its participation in the “coupled market” of the European Union are two key elements of our energy policy, both for economic reasons and for our security of supply.

Switzerland imports and exports large volumes of electricity in relation to its domestic production and consumption [→ Q66]. It is a hub in the European electricity market. For decades, Switzerland has benefited from decades of electricity trade with other countries, earning billions each year.

In addition, Switzerland is obliged to import electricity at certain times of the year, as it is unable to cover its needs in winter. It also has to export electricity because it cannot avoid producing more than it consumes in the summer months and has limited seasonal storage capacities [→ Q75]. With the development of renewable electricity, this seasonal variability will continue to grow, thereby increasing our need to exchange with the European grid.

Finally, the massive increase in electricity production from solar and wind power is also pushing towards strong integration into the European grid. When a wind turbine suddenly stops turning because the wind drops, this loss of production must be instantaneously compensated by another reserve structure (called a “control” structure), so that the production is always equal to the consumption [→ Q72]. At the local level, one MW of controllable reserve power (gas-fired, storage hydro, etc.) should therefore theoretically be available for every MW of installed solar and wind power. This reserve, which can be mobilised very quickly, is indispensable when the wind is not blowing or the sun is not shining. Naturally, a reserve power plant that produces no (or little) electricity is very expensive, because the investment for its construction cannot be recovered through the sale of electricity.

For economic reasons, the aim is therefore to invest as little as possible in reserve power plants. One way of solving this difficulty is to be integrated into the large European electricity grid, which allows a better balance between production and consumption because it is much larger in scale. The increasing volatility of production due to regional weather vagaries is easier to erase on a European scale than in Switzerland. The exchange of electricity via a large network enables electricity companies to keep expensive reserve capacities to the minimum necessary, by pooling them on a European scale.

In addition, Switzerland could take advantage of its unique pumped storage capacity in the heart of the continent to store surplus electricity generated by wind farms in northern Europe or photovoltaic installations in the Mediterranean basin [→ Q73]. Electricity storage needs in the European Union are estimated at some 90 GW by 2050, and few options for large-scale storage exist. Switzerland therefore has a card to play as a “battery” of Europe. However, this strategy requires a strong integration of the Swiss grid into the European grid, including a connection to the continental supergrid which is in preparation. The Swiss grid development plan must therefore be integrated into the Europe-wide planning process.

But the physical connection of the Swiss network to the European network is not enough. It is also essential for Switzerland to be able to participate in the “coupled market” for electricity. In the current market system, electricity volumes and the rights to use the electricity grid to transport electricity are traded completely separately. This decoupled system is not optimal and leads in particular to an under-utilisation of cross-border transmission capacities and significant additional import costs due to “congestion charges”. Market coupling makes it possible to merge these two markets (the electricity market and the transmission market) into a single integrated electricity market. This single market is much more efficient as it allows the optimal use of existing transmission capacity. Switzerland is currently negotiating its access to the coupled market, which has been gradually taking shape in the European Union since 2008. This is essential to remain competitive on the European market while limiting investments in the strengthening of our physical transport capacities (pylons, high-voltage cables, etc.).

On the European Union side, however, interconnection with Switzerland is no longer considered to be the only strategic option. In particular, the expansion of the European grid towards the East offers new opportunities. As for north-south and east-west transit, the future electricity highways could easily bypass Switzerland and thus exclude it from the European market. Technically, it would be possible for Switzerland to cut itself off (or be cut off…) from the European grid. But this would be a very bad economic calculation, and it could be very dangerous for our security of supply.