Greed from China: National Council decides on sale of hydropower After solar offensive, councils also decide on wind energy offensive

Many mountain communities sit on a treasure. In the past, they regularly collected interest for the precious resource water. But now the really big jackpot awaits, a blessing in the billions – because the concessions of many hydroelectric power plants have to be renewed. Finhaut already made money in 2010: the Valais community of 355 people raised CHF 112 million, so that the SBB can continue to operate the hydroelectric power station of Barberine.

Hydro billions and poor mountain communities: the constellation carries risks. Especially at a time when China is strategically seizing systemically important infrastructure. A third of Chinese direct investment in Europe goes to the energy sector.

The takeover appetite of the Asian superpower has also given federal politicians a fright. To ensure that Swiss electricity grids and hydroelectric power stations do not fall into foreign hands, Parliament has launched an investment control. Today, Wednesday, the National Council is debating a Lex Koller for critical energy infrastructures. A foreign takeover would only be possible in exceptional cases.

The electricity infrastructure is in public hands

From the point of view of the Federal Council, no reform is necessary. The Federal Council states that the electricity infrastructure is in public hands anyway. That’s not quite right. Virtually unnoticed by the public, the investment company Energy Infrastructure Partners (EIP), which has spun off from Credit Suisse, has invested in energy infrastructure. It owns 49 percent of the BKW network interest through the investment vehicle “CSA Energy Infrastructure Switzerland”. This in turn is the largest shareholder of network operator Swissgrid.

There is also a loophole for hydropower plants. This is called reversal in technical jargon. When a concession for the use of hydropower expires after 80 years, the majority of a power station will go back into the ownership of the municipality or canton – almost for free.

Admittedly, a relapse is rare. As a rule, the municipalities do not allow the installations to be operated themselves and sell the new concession to an electricity company for a lot of money. This can be the previous operator or a competitor. If it remains with the previous concessionaire, a fee is payable. In the case of Finhaut, it was 112 million Swiss francs.

However, Swiss electricity producers would not be able to “make substantial one-off payments at the start of a new concession,” their association VSE writes in a statement.

That’s the crux: while local energy companies need to be profitable, Chinese companies operate by a different long-term logic. The best example is the «New Silk Road». With the prospect of cheap credit and widespread infrastructure projects, Beijing is extending its influence from Central Asia to Latin America.

War in Ukraine as a turning point in energy policy

It is true that the war in Ukraine has led to a rethinking in Europe of power supply. But there was a time before that when cheap energy suddenly abounded. Instead of a power gap, it was called a power surplus. That was ten years ago. Prices plummeted and almost broke the necks of Swiss suppliers such as Axpo and Alpiq.

It went so far that in 2016 the then chairman of the board of directors of Alpiq, Jens Alder, went on a roadshow and wanted to sell half of the shares in Swiss hydropower. The Chinese state-owned company State Grid also showed interest. A photo of a smiling alder with Chinese managers circulated at the time.

The municipalities and cantons still have it in their own hands. There is a threat of a future EU electricity deal. If Switzerland does not make any reservations, the water concessions could be auctioned internationally in the future. About 30 terawatt hours of annual production will need to be re-licensed over the next 20 years. “Who wants to hear the outcry in Switzerland when water concessions go to the Qatari sovereign wealth fund?” asked Jacqueline Badran in 2016. The Zurich SP National Council came up with the idea of ​​a Lex Koller for critical infrastructure.

After all, awareness of the strategic importance of energy infrastructure has grown. Wallis is a pioneer in this. The canton has decided that at least 60 percent of the hydropower must remain in Valais hands.

The Valais would like to curb the influence of the “Üsserschwyz”. The canton is Switzerland’s moated castle. But only 20 percent of production is in-house. Like Graubünden, Valais therefore wants to “bring home” the power plants in its own canton. Expiring concessions may not be extended.

There is also a good chance that the National Council will now subject critical infrastructure to Lex Koller in federal Bern. In the preparatory advisory committee, the decision was clear with a vote of 15 against 8. A so-called unholy alliance of the pool parties SP and SVP should help the case to a breakthrough.