23 September 2002 – Swiss voters chose on Sunday to reject the deregulation of the country’s power industry in a referendum which leaves it at odds with European Union policy. Plans for a storage facility for spent nuclear fuel were also rejected.

The outcome will be a disappointment to the Swiss power industry which is already under strong pressure from neighbouring countries such as France and Italy to open its market to foreign competition and increase price transparency for power transports over its high-voltage cables that connect much of Southern Europe with the rest of the continent.

In the national referendum on the power market opening, Swiss voters rejected the government plan by 52.5 per cent to 47.5 per cent, while 56 per cent of the voters in the tiny alpine canton of Nidwalden objected the creation of a repository for radioactive waste.

“We are very disappointed about the no vote for the opening of the electricity market but we have to accept it,” said Verena Martignier, spokeswoman for Axpo Holding, the country’s largest electricity producer.

“A liberalization of the market would have given the industry clear guidelines,” she added.

Swisselectric, an organization of the country’s leading utilities, was surprised about the negative outcome of the vote.

The organization warned that the lack of a regulatory framework could lead to yearlong legal battles between power companies and may hamper electricity trade with neighbouring countries.

“But we will look for ways to find new solutions to keep damage as low as possible,” Swisselectric said in a statement.

The Swiss power market opening was initially scheduled for early 2001. But the energy crisis in California and the breakdown of the country’s flag carrier Swissair made Swiss citizens wary of market openings, forcing the government to postpone the referendum twice. The market deregulation was later fixed for autumn 2003 and would have entailed a steady opening of the whole market within six years. The opening, as outlined in the Swiss Electricity Market Law, or EML, would have boosted renewable energy because power from environmentally friendly sources would have been exempted from transmission fees.

“For green power, the no-vote will have a negative effect,” Martignier added.

Industry analysts had reckoned that a power market opening would have increased the share of so-called green power to 10 per cent within the next five years, up from less than 1 per cent at present.

The no vote is expected to further enrage Switzerland’s neighbours, who are waiting to grab their share in one of Europe’s most lucrative power markets. In return, the access for Swiss utilities to enter into other European market will become more difficult, if not impossible.

In addition, the rejection of the EML leaves the highly debated issue of power transmission unresolved. French and German power companies have long criticized Switzerland for asking relatively high power transmission fees and have asked the country’s industry for increased transparency.

“The EML would have solved this issue on a national level, but now it will take much more time because contracts will need to be fixed on a bilateral level,” Martignier explained.

Chances that Switzerland will see the building of a permanent repository for radioactive waste have shrunk to almost zero, because the rejection in Nidwalden was the second no vote within the last seven years in this canton.

Currently, the Swiss nuclear waste disposal organization Nagra is also reviewing sites in the area north of Zurich for the foundation of a permanent or at least long-term nuclear disposal facility for spent fuel. Nagra recently probed a site near the village of Benken which lies within walking distance of Germany. But the plans have already led to widespread criticism for environmentalists.