Consequences of expensive electricity

  10.01.2022 Local News

The electricity tariff for large companies is six times higher than usual. This may affect consumers in the near future: Ski tickets are expected to become more expensive.

The reasons for the high electricity tariffs on the daily market are manifold, according to BKW’s media office. Demand is high and supply is low; in the north, the wind blew less strongly than usual; solar energy could not be fully exploited because of the rainy summer; the phase-out of nuclear power leads to less electricity; and the production capacity of gas and oil was not ramped up. “Last but not least, the increased CO2 taxes have made the production of electricity more expensive,” BKW adds. And, as the economy recovered after the Corona year 2020, the energy demand increased.

Sports centre little affected
Many large companies buy their electricity several years in advance and fix quantities and tariffs contractually. “We have purchased electricity for the next two years,” explains Ruedi Kunz of the Gstaad sports centre. He says it is a little more expensive than in the past, but not dramatically so. “We expect our energy costs to be in a similar range as in previous years,” he says, justifying this with operational and technical optimisations that should lead to lower electricity consumption.

Cable cars strongly affected
The situation is different for Bergbahnen Destination Gstaad AG (BDG). They expect electricity costs to rise by about CHF 1m this winter. Although the transport company bought about one third of its annual electricity requirements until 2024 in advance at prices of 6.5 to 8.3 centimes per kilowatt-hour, the remaining two thirds have to be procured on the spot market or at the standard tariff.

“We can only procure the electricity for cable car operations as a large consumer in advance,” explains BDG head of finance Sandro Karlen. That is about four million kilowatt-hours. For everyday use in the offices, restaurants, workshops, etc., the company purchases two and a half million kilowatt-hours at the standard tariff of the respective electricity company as a small consumer.

About five million kilowatt-hours are needed for snowmaking. This electricity has to be purchased on the spot market because peak loads are highly volatile. Therefore, purchasing in advance has not been possible. The BDG has been better off with purchasing electricity on the spot market.

With an average of 7 centimes per kilowatt-hour (excluding grid usage costs and levies), the total energy costs settled at around CHF 2m per year. Since this October, however, spot prices have skyrocketed so much that, depending on the time of day, they range between 18 and 45 centimes per kilowatt-hour. That is three- to eightfold the usual tariff. Karlen expects additional costs of around CHF 1m for the current financial year.

Price increase for winter 2022/2023
Because of the high electricity costs, the company has no choice but to bite the bullet and pay the high electricity bills. This also has an impact on ski tickets for winter 2022/23: “If the electricity costs remain at this high level, we expect a price increase. Day tickets could become about CHF 2 more expensive next winter and domestic season tickets about CHF 50,” predicts Karlen.

Difficult forecasts
Whether electricity tariffs will remain that high in the long term is difficult to assess, says BKW: “It’s hard to make a forecast.” The market expects prices to return to normal around the second quarter of 2022. However, the level is likely to remain persistently higher than the lows in spring 2020. And for private customers? “At BKW, the impact will be minimal,” they reassure.



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