Bill on a Secure Electricity Supply from Renewable Energy – What are the Changes?

Background
 

• The new law primarily comprises amendments to the Energy Act and the Electricity Supply Act, but also to the Spatial Planning Act and the Forestry Act.
• The amendments are to come into force on 1 January 2025.
• Of practical relevance will be the implementing ordinances, which are currently still in the legislative process (the consultation procedure ended on 28 May 2024).

Harmonisation of Remuneration for Surplus Solar Electricity

Until now, each grid operator could, apart from certain legal requirements, determine the remuneration for surplus solar electricity itself. As a result, remuneration currently varies considerably across Switzerland.

In accordance with the Federal Act on a Secure Electricity Supply from Renewable Energy, a price based on the quarterly market price on the European electricity exchange will now apply throughout Switzerland if no agreement on remuneration is reached. The Federal Council sets a minimum remuneration for smaller plants (according to the consultation draft: up to 30 kW = 4.6 centime/kWh, 30 to 150 kW without self-consumption = 6.7 centime/kWh, 30 to 150 kW with own consumption = no minimum remuneration).

Introduction of Local Electricity Communities

End consumers, producers and electricity storage operators can now form local electricity communities to trade in self-produced electricity at a neighbourhood level.

Background: The decentralisation of the electricity supply is part of the Energy Strategy 2050. The new instrument of the local electricity community will allow for more extensive energy communities than with the self-consumption association (Zusammenschluss zum Eigenverbrauch, ZEV). In addition, the ZEV regulations will be slightly eased.

Self-generated electricity can be sold freely within the local electricity community, and the public distribution grid can also be used at reduced grid utilisation costs (this is not possible with the ZEV). In contrast to the ZEV, the individual participants remain end consumers in the sense of the Electricity Supply Act.

New Regulations for Basic Supply (Grundversorgung)

Parliament once again refrained from a complete liberalisation of the electricity market, but the tariff structure for the basic supply will be largely reorganised:

To promote the production of electricity from renewable energies in Switzerland, basic supply companies are now obliged to use a minimum proportion of electricity from their own renewable production for the basic supply. If the minimum proportion cannot be achieved with their "expanded own production" (the energy company's own production plus electricity purchased in the grid area on the basis of the purchase obligation), medium- and long-term contracts for domestic renewable energies must be concluded additionally. This is likely to increase demand for power purchase agreements (PPAs) in Switzerland. In addition, basic supply companies must now offer an electricity product as standard that is based essentially on domestic renewable energies.

In connection with the basic supply tariffs, ElCom's controversial "average price method" will be abolished and replaced by a separate procurement strategy for basic supply customers on the one hand and free market customers on the other. The aim is to avoid price distortions and cross-subsidies to the free market at the expense of the basic supply. The basic supply companies are also obliged to hedge price risks as far as possible through structured and longer-term procurement.

Efficiency Targets for Electricity Suppliers

Electricity suppliers are now required to increase the efficiency of electricity use. They can do this by implementing measures for end users - such as advising households or helping commercial enterprises to install energy efficiency measures (efficiency services).

Electricity suppliers can provide efficiency services themselves, but they can also buy respective certification from third parties. Overall, the new requirements are expected to significantly increase the demand for efficiency measures and related certificates (so-called white certificates).

Some Further Changes
 

• The existing nationwide obligations to install solar plants which have been in force since autumn 2022 (the so-called solar offensive, i.e. obligations to install solar plants on the roofs or facades of new buildings) have been permanently enshrined in the Energy Act.
• Spatial Planning Act: Easing for sufficiently adapted solar plants on facades and solar plants above and on the edge of car parks.
• Wind and solar installations above a certain size and significance are considered as installations of national interest. There are simplified planning conditions for such installations if they are planned in areas suitable for the use of wind and solar energy and if they are not located in a protected landscape of national importance.
• There is also a new promotional program for large photovoltaic systems without self-consumption (gleitende Marktprämie).