Good news from the federal government Electricity tariffs to fall by an average of 10 percent in 2025

Electricity prices will fall by an average of 10 percent in 2025. The Federal Electricity Commission (Elcom) provides information on the tariffs for the coming year.

Keystone-SDA

05.09.2024, 14:55

05.09.2024, 16:48

SDA

Electricity prices will fall by an average of 10 percent in 2025. This is according to a calculation published by the Federal Electricity Commission on Thursday. The typical household will pay 29 centimes per kilowatt hour.

This is 3.14 centimes per kilowatt hour (kWh) less than in the current year, according to the Electricity Commission (Elcom). Calculated over the whole year, an average household with a consumption of 4500 kWh will have to pay electricity costs of 1305 francs. This is 141 francs less than in 2024.

The tariff consists of the levy for grid usage, the energy tariff, the compensation for local authorities and the grid surcharge. According to Elcom, the grid costs for the typical household will fall from 12.71 to 12.18 centimes per kWh. This includes the costs for the winter reserve of 0.23 centimes.

The energy tariff will be 12 percent cheaper and will now cost 13.7 centimes per kWh. At 1 centime, the levies to local authorities and the grid surcharge remain stable at 2.3 centimes. According to Elcom, the picture is similar for small and medium-sized companies.

Large price differences in Switzerland

However, consumer prices for electricity vary considerably depending on the grid operator. This is due to the differences in electricity purchasing as a result of in-house production and procurement from third parties.

There are several reasons why electricity tariffs are falling. For example, prices on the electricity market have stabilized, albeit at a high level. According to Elcom, prices have calmed down somewhat after the sometimes large price increases in 2023 and 2024.

While wholesale prices for delivery in the following year were still at 150 euros per megawatt hour (1 MWh = 1000 kWh) twelve months ago, they are currently at 90 euros. This is having a delayed effect on electricity prices in some cases.

In addition, the costs for the winter reserve, which end consumers pay via a surcharge on the grid usage fee, have fallen. The return on capital for the electricity grid also fell slightly.

Production costs below market price again

Electricity tariffs are heavily dependent on a supplier's production and procurement methods, as they are determined by the production costs for in-house production and the costs for purchased electricity.

The timing of procurement plays a major role due to fluctuations on the electricity futures market, as Elcom explained. Analyses by the supervisory authority have shown that with the recent price fluctuations in wholesale trading, even small differences in the procurement strategies of grid operators can result in large price differences. Longer-term procurement can smooth out the price fluctuations.

In addition to the prices on the market, in-house production and the production costs to be paid for it are an important factor in the tariff structure. According to Elcom, these production costs have largely been higher than market prices in recent years. In the past two years, however, they have been significantly lower again.

The persistently high market prices also influence grid costs, Elcom added. These would also include electricity price-dependent components such as active power losses or system services. System services are provided by the grid operator Swissgrid to ensure the short-term stability of the system. The approximately 600 grid operators had to inform customers and Elcom of their new tariffs by August 31.

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3.47 p.m.

The media briefing is over

3.43 pm

Why are the electricity tariffs in Ticino so high?

Elcom can't say anything about the reasons yet. Elcom has only just received the tariffs and is now beginning its analysis.

3.40 p.m.

The most important points

Altwegg summarizes: Electricity tariffs are falling on average. The costs for the winter energy reserve are falling. Prices in international electricity trading have also fallen. But they are still high.

3.37 pm

Elcom also reviews wholesale electricity prices

Swiss electricity prices generally follow those of neighboring countries, explains Urs Meister from Elcom. But there are also differences. If these were significant, Elcom would investigate the causes.

3.36 p.m.

Elcom will publish a report on the investigation of procurement costs

Urs Meister explains which aspects of electricity procurement Elcom is examining. The results will be published as soon as they are available.

The new framework decree brings with it new rules for electricity suppliers. Elcom will also provide information on this.

3.32 p.m.

Elcom carries out preliminary analyses of electricity suppliers

Elcom has checked the tariff changes at around 100 companies before they are communicated and discovered errors in some cases.

There were weaknesses in procurement processes and certain small electricity supply companies also had less formalized procedures. Elcom had pointed out inadequacies to them.

The evaluation is still ongoing and responses to inquiries from Elcom are still being received.

3.26 p.m.

Elcom reviews tariffs and costs

Urs Meister explains that many inquiries from consumers about tariffs have been sent directly to Elcom in the past year. However, Elcom is not responsible for the tariffs and their communication. That should be done by the electricity suppliers themselves.

Electricity suppliers must inform their customers in writing about tariff changes and give reasons for them.

3.20 p.m.

The impact of self-produced electricity

Delbiaggio explains that most electricity suppliers have no in-house production or only a very small amount. Some are able to generate almost all of their customers' requirements in their own plants.

Before the price explosion caused by the Ukraine invasion, self-produced electricity was more expensive than electricity from the market. This ratio has since changed. Since the extreme rise in market costs, electricity generated in-house is cheaper than the average.

3.14 p.m.

How electricity suppliers procure energy has an influence

Short-term strategy: Energy is procured within one year up to the time the tariff is announced.

Long-term strategy: Energy is purchased over three years.

Until a few years ago, the two strategies would not have led to any major differences in electricity tariffs.

In the current situation with the large price mark-ups, the long-term strategy would smooth out the fluctuations, but high prices would be maintained for longer, explains Delbiaggio.

3.11 p.m.

How the electricity tariffs are calculated

Katia Delbiaggio explains how electricity tariffs are calculated. The average price for a megawatt hour of electricity in Europe has fallen from over 130 euros to 90 euros. That is still a high price.

3.07 p.m.

Tariffs do not fall for everyone

Despite lower costs, there are municipalities and regions where electricity prices will rise in 2025 compared to 2024. This is shown on Elcom's electricity price development map. Red stands for the highest tariffs, green for the lowest. Large parts of the canton of Ticino, for example, pay particularly high prices, while various municipalities in Lucerne and Graubünden pay particularly low prices.

3.04 pm

Tariffs fall by around 10 percent

The reasons for the falling prices are the winter reserve, which no longer has to be the same size, lower fees for the electricity grid and the general calming of the European electricity market.

3 p.m.

The media conference begins

The following will present: Laurianne Altwegg, Vice President of Elcom, Katia Delbiaggio, Member of Elcom and Urs Meister, Managing Director of Elcom.

2.53 p.m.

The media briefing is scheduled for 3 pm

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Electricity prices will fall by an average of 10 percent in 2025. This is according to a calculation published by the Swiss Federal Electricity Commission on Thursday. The typical household will pay 29 centimes per kilowatt hour.

This is 3.14 centimes per kilowatt hour (kWh) less than in the current year, according to the Electricity Commission (Elcom). Calculated over the whole year, an average household with a consumption of 4500 kWh will have to pay electricity costs of 1305 francs. This is 141 francs less than in 2024.

The tariff consists of the levy for grid usage, the energy tariff, the compensation for local authorities and the grid surcharge. According to Elcom, the grid costs for the typical household will fall from 12.71 to 12.18 centimes per kWh. This includes the costs for the winter reserve of 0.23 centimes.

The energy tariff will be 12 percent cheaper and will now cost 13.7 centimes per kWh. Charges to local authorities will remain stable at 1 centime and the grid surcharge at 2.3 centimes.