Are mini-suppliers responsible for the electricity price debacle?: ‘The know-how to successfully purchase electricity is often lacking’

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It sounds like a bad joke, but it’s the sad reality: a calculation error forces the municipality of Büttikon AG to increase the electricity price by 158 percent. Unfortunately, this is not an isolated case: this year the price of electricity has risen enormously – also because individual electricity companies gambled when purchasing and speculated on low prices.

Buying electricity is complicated. Nevertheless, a large part of the more than 600 Swiss network operators have to do this time and time again. Many of them are small companies, says Andreas Tresch (33) of consultancy firm Enerprice to Blick. “There is often a lack of knowledge and experience to successfully purchase electricity in volatile markets and times of crisis.” This is also evident from the current figures.

“Not everywhere” professional

Electricity prices will rise by an average of 18 percent next year. For a typical household with a 5-room apartment, this amounts to about 222 francs compared to 2023. According to the Elcom Electricity Commission, there are several reasons why prices are rising again. For example, there are new or higher taxes.

But Elcom chairman Werner Luginbühl (65) also says: “I assume that the purchases were not made with the necessary professionalism everywhere.” In these communities, there may now be significant price increases. Luginbühl is sure: “Citizens will put pressure on them to improve this professionalism.” Or that network operators should merge.

Whether prices go up does not only depend on professionalism, puts Urs Meister, general manager of Elcom’s technical secretariat, into perspective. When it comes to electricity, it’s all about timing. Even a less well positioned EW can get lucky and buy at a low price. But especially for smaller companies it makes sense to seek advice.

Association defends itself

The Association of Electricity Suppliers rejects the indirect accusations. The suppliers would purchase the electricity “largely professionally”. But since mid-2021, market prices have risen sharply. “Price increases could not be avoided even in low-risk tenders,” it says.

The short-term sourcing strategies would also have led to very low prices through 2021. That means: with the low market prices of recent years, it really didn’t matter how professionally you purchased electricity.

This has now changed. “More than 600 network operators is too high a number,” says energy politician Priska Wismer-Felder (52). The center council member thinks that mergers will take place in the coming years. “The situation in the market is difficult, it is becoming increasingly difficult to find good people who can professionally manage these electricity purchases.” There is no need for more government regulation: “Even a small entrepreneur can have a good procurement policy.”

EWs must produce their own energy

SP energy politician Roger Nordmann (50), on the other hand, sees the lack of professionalism as an afterthought. The problem is different: “If a power station produces its own energy, the costs remain stable. Everyone who buys on the market has been driving cheaper for years. But now you pay more.” That is why Parliament now wants to create incentives so that smaller power stations can also produce their own electricity.

SVP Landraad member Monika Rüegger (55) does not see a stronger merger of the individual electricity suppliers. “It makes perfect sense that there are regional differences.” Because, she says, it is not the fault of the electricity suppliers. But the ‘failed energy strategy’ that makes electricity ‘scarce and increasingly expensive’.

Source:Blick