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11 May 2026
Publication series – 3 of 86 Insights
Integration into the EU electricity market: Switzerland and the EU agree on a wide-ranging agreement
- Briefing
On 2 March 2026, the European Union and Switzerland signed a comprehensive package of new and updated agreements. The aim is to secure access to a market of around 460 million consumers, create economic benefits in key sectors and intensify bilateral relations. The main focus is on a new electricity agreement between Switzerland and the EU, which is regarded as the key project within the agreements.
Context of the electricity agreement
For geographical and physical reasons, Switzerland has been closely intertwined with the European electricity grid for decades. Nevertheless, a legal integration into the European internal electricity market has been lacking until now. It was precisely this gap that led to mounting problems in recent years: Switzerland was excluded from important coordination bodies, whilst at the same time unplanned electricity flows, rising costs and uncertainties in grid operation increased.
The new electricity agreement, which came about largely at Switzerland’s instigation, is intended to fundamentally change this situation. It enables Switzerland to participate in the EU internal electricity market, creating for the first time a binding legal basis for cross-border electricity trading and grid coordination.
At the heart of the agreement is Switzerland’s integration into the European electricity market. Swiss energy suppliers will gain access to EU trading platforms, whilst the Swiss market will be opened up to European suppliers. Furthermore, Switzerland will be fully integrated into the technical and regulatory processes designed to ensure grid stability.
A key element is security of supply: EU Member States will no longer be permitted to impose export restrictions on electricity to Switzerland. This is particularly crucial during the winter months when Switzerland is heavily reliant on electricity imports. In return, it can efficiently export surplus energy – such as from hydropower – in the summer.
Switzerland is also aligning itself with the EU in regulatory terms. It is adopting key rules on state aid, whilst retaining flexibility in the promotion of renewable energy. At the same time, it is not committing to fully adopting EU environmental law but must ensure an equivalent level of protection.
Reform of the Swiss electricity market
At the heart of the electricity agreement is Switzerland’s integration into the European internal electricity market. This means that what was previously only a de facto integration into the European electricity system is now being legally secured and placed on a stable footing. Swiss energy suppliers will gain access to European electricity trading platforms and will be able to participate in cross-border trade on an equal footing. At the same time, Switzerland is opening its electricity market to suppliers from the EU, which is intended to strengthen competition and increase efficiency. Another key component is the full integration of Switzerland into the technical processes of European grid operation. The grid operator Swissgrid will be integrated into central coordination mechanisms, for example to ensure grid stability and prevent unplanned electricity flows. This is intended to make grid operation more efficient and secure overall. The provision on security of supply is particularly important: EU Member States will no longer be permitted to impose export restrictions on Switzerland. This is crucial, particularly during the winter months, when Switzerland relies on electricity imports, whilst surplus energy can be exported in the summer.
Furthermore, Switzerland has committed to the gradual liberalisation of its electricity market, whilst maintaining a regulated basic supply. In addition to businesses, some of which are already able to do so, households will in future be free to choose their supplier. Switzerland is also adopting key EU rules on state aid, though it retains some flexibility regarding the promotion of renewable energy. Moreover, larger grid operators will be required to ensure the organisational separation of grid operation and energy supply.
Further regulatory adjustments will follow in a second phase. In the long term, grid regulation is to be transferred entirely to an independent supervisory authority, as the ECJ most recently required for the Federal Network Agency in its judgment of 2 September 2021 (Case C-718/18).
Expected economic impact
Significant economic benefits are expected. Forecasts suggest that the legal safeguarding of cross-border capacities could enable annual trading profits of around one billion Swiss francs between 2030 and 2050. At the same time, costly investments in new power stations on a similar scale could be avoided.
Electricity prices could also fall significantly by up to 14 per cent, according to estimates. This would strengthen the competitiveness of the Swiss economy. Overall, the agreement promises a combination of greater security of supply and lower costs.
Outlook and conclusion
On the European side, the Council of the European Union approved the signing as early as 24 February 2026, and the European Commission was authorised accordingly. However, the European Parliament’s approval is still pending.
In Switzerland, the way forward is more uncertain. The agreements still need to be politically approved there, and it is likely that a referendum will be held, the outcome of which is unclear. This is because despite various advantages, the electricity agreement and the Bilateral III package are politically controversial overall and are viewed by some as an encroachment on Switzerland’s national sovereignty.
Furthermore, some of the wording in the electricity agreement has been criticised as unclear or lacking in legal binding force. Whilst greater legal certainty is promised, the exact scope of this certainty leaves room for interpretation.
Overall, the electricity agreement between the EU and Switzerland marks a significant step towards closer integration in energy policy. It promises greater stability, lower costs and better integration into the European electricity market. At the same time, it raises fundamental questions about Switzerland’s future role as an ‘electricity hub’ within the European framework.
In this series
THG quota 2026/2027 and beyond: What fleet operators need to know now - Focus electromobility
26 May 2026
Integration into the EU electricity market: Switzerland and the EU agree on a wide-ranging agreement
11 May 2026
Revision of energy efficiency requirements for data centres: an overview of the amendment to the Energy Efficiency Act
29 April 2026
Geothermal Energy in Germany: technology, current status and the legal framework for the heat transition
24 April 2026
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24 April 2026
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10 March 2026
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The NIS2 Directive: Challenges Renewable Energy Companies
18 February 2026
EU specifies certification of permanent CO₂ removals
11 February 2026
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Electricity Tax Amendment 2025/2026: New rules for BESS, charging infrastructure and renewable energies
14 January 2026
Battery storage systems in outdoor areas - current classification in accordance with § 35 BauGB
19 December 2025
HR compliance in the energy sector – customs authorities step up the fight against sham-employment
15 December 2025
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2 December 2025
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Offshore wind in Germany: from market premiums to Contracts for Difference?
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26 November 2025
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New amendment to the Energy Industry Act (EnWG) introduced in July and August 2025
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Court ruling on the effectiveness of availability guarantees for wind turbines
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New Legal Framework for the Commercial Use of Carbon Capture and Storage (CCS) and Carbon Capture and Utilisation (CCU)
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Amendment to the Energy Industry Act: changes for energy supply companies and grid and system operators
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Land acquisition and data protection: The importance of the GDPR when project developers request owner data
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by Dr. Patrick Vincent Zurheide, LL.M. (Aberdeen), Dr. Julia Wulff
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Updating the National Hydrogen Strategy
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by Dr. Niels L. Lange, LL.M. (Stellenbosch), Dr. Janina Pochhammer
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Challenges for data center operators - The federal government’s draft bill for an energy efficiency act
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