Eight years after Switzerland opened its market to large consumers, we surveyed 27 public and private organisations on their electricity procurement policy, covering industry and services, B2B and B2C activities, with local and national players.
An open but static market
The most striking finding lies in the gap between two figures. Eight in ten have moved to the open market, driven first by economics, putting the incumbent supplier under competitive pressure, and second by negotiable contract duration, which brings visibility on the bill.
But only one in ten has left their incumbent supplier. That loyalty is openly claimed, often justified by a wish to support the local economy and by a long-standing relationship. Electricity supply thus follows the pattern seen in banking or insurance: customers negotiate their bill down but remain averse to the perceived risk of switching provider. Notably, those who did switch reported no particular difficulty.
Highly uneven maturity
The survey reveals wide disparities in maturity. Some organisations show marked expertise in how the market and the power system work. Others reveal only partial understanding, sometimes with a telling confusion between the role of the network operator, a monopoly, and that of the supplier, in competition.
Two explanations compound each other. Electricity procurement is not strategic for these companies, and the relationship with the supplier remains distant and infrequent. Weak market dynamics add to this: competitors prospect only modestly, particularly among customers consuming a few GWh a year.
Five supplier selection criteria
- Price level, decisive for the majority. Observed levels nonetheless sometimes sit well above the market benchmark, where baseload was trading between 3.5 and 4 centimes per kWh.
- Local origin of the supplier, strongly differentiating: on equal offers, the local supplier wins.
- Origin of the electricity, covering technology, renewable status, certification and location. 65 % of the panel’s consumed volume carries renewable guarantees of origin, a high figure explained by their low cost, and 30 % carries cantonal guarantees, showing strong interest in local provenance.
- Contract duration, revealing low risk aversion in a falling market. Most secured supply over three to five years, and three in ten expressed interest in longer terms. Those long commitments mechanically limit competitive intensity.
- Associated services, energy or multi-utility, which in some cases create a close bond with the supplier. The opposite trend, separating supply from energy services, was observed just as often.
The first challenge is educational
The survey confirms that market opening met its primary objectives: lower procurement costs and more flexible offers. But the low switching rate points to considerable market power held by incumbents in their territories.
Given the maturity observed at the consumption levels surveyed, below 50 GWh a year, the first challenge lies in the educational effort needed to explain the fundamentals of the market and the power system.
Rising customer expertise could then energise the market by opening new lines of differentiation: electricity origin and sub-annual energy labelling, the trade-off between market indexation and long-term price security, and associated services. Two dynamics will contribute: the growing importance of energy performance and the new consumption models driven by national energy strategy, self-consumption and consumer groupings, alongside digitalisation of the power system.
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