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Swiss agency warns of much higher power prices

·1-min read
FILE PHOTO: Electricity pylons are seen near Tagelswangen

ZURICH (Reuters) - A Swiss government agency warned households and businesses to brace for much higher prices next year and said on Thursday it could not rule out supply bottlenecks this winter.

The Federal Electricity Commission (ElCom), which oversees the electricity sector, said most of the 172 utilities that responded to a survey it conducted planned to increase tariffs by 47% on average in 2023.

For a five-room household that consumes 4,500 kilowatt hours of power a year, this would mean electricity bills would rise by around 180 Swiss francs ($188) per year.

Companies that use 150,000 kilowatt hours face extra costs of around 6,000 francs excluding value-added tax, but this could be higher in individual cases, it added.

Electricity prices have soared since last August, driven by higher gas prices amid the war in Ukraine, a sharp increase in coal prices, high carbon prices and below-average availability of power in recent months from nuclear plants in neighbour France, it noted.

Switzerland relies on neighbours for power in winter, and imports from France would likely be "very limited" this winter.

That meant Switzerland's structural import requirement of around 4 megawatt hours in the winter semester would have to be covered primarily by imports from Germany, Austria and Italy, whose exports hinge on the availability of fossil fuels.

On the other hand, power from Swiss nuclear power plants is readily available, industry has cut consumption given high prices, and the government is readying a strategic hydropower reserve for the first time, it noted.

($1 = 0.9586 Swiss francs)

(Reporting by Michael Shields; Editing by David Holmes)

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