Swiss gas sector views coming winter with concern

Gas prices have tripled since the start of the year. Liang Sen / Keystone

Switzerland relies on natural gas as part of its energy mix, both for heating and for industrial processes. But prices have tripled this year due to the tense political situation in supplier countries in the Middle East.

The situation is tense, says Daniela Decurtins, the director of the Association of the Swiss Gas Industry. “We are seeing historically low storage levels in Germany and the Netherlands, whilst they are well stocked in France and Italy.”

The Strait of Hormuz is currently still closed, which means there is less liquefied natural gas (LNG) available on the global market.

Overall, the uncertainty ahead of the coming winter is significantly higher than in previous years. Above all, the question of just how cold the winter will be is a major concern for the industry.

This could result in the price of gas on the international market rising even further – it has already climbed from €28 (CHF26.30) per megawatt hour to almost €73 since January, mainly due to the war in the Middle East.

“We certainly won’t see a situation like in 2022 again, when we saw price rises of up to €340. In a worst-case scenario, experts are perhaps anticipating a doubling of prices,” says Decurtins.

Last ditch insurance

Switzerland has no gas storage facilities of its own. Traditionally, it has sourced gas mainly from Germany. In recent years, however, the gas industry has been seeking alternatives.

In spring, the idea was mooted of diverting gas – in the case of an emergency – from the transit pipeline running from France via Switzerland to Italy.

“In the event of short supplies, this option allows us to retain in Switzerland gas that is already here and was destined for Italy, and in return to purchase gas in Italy and exchange it accordingly. It is a form of insurance which, as with any insurance, you hopes you will never need,” said Decurtins. “But above all, it serves to protect industry and commerce.”

Biogas alternative

Switzerland would be considerably less vulnerable to gas market turbulence if it consumed more renewable gas produced in Europe – for example, from biogas plants. At present, such climate-neutral gases account for just 10% on average; by 2050, the target is for this figure to reach 100%.

Decurtins believes the target is achievable. “We have set ourselves a target of 15% of total gas consumption by 2030. We are well on the way to achieving that,” she says.

Domestic biogas production is expected to double by 2030. But Switzerland is also the largest importer of biomethane in Europe.

This development promises to ease the situation in future winters. Gas could become scarcer and more expensive in Switzerland. However, it is unlikely to become so scarce that the tap would be turned off for households and industrial businesses.

Translated from German, sub-edited by Matthew Allen/dos