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Switzerland's engineering sector urges country to start energy saving now

·2-min read
FILE PHOTO: Shoppers walk along the street after the Swiss government relaxed some of its COVID-19 restrictions in Zurich

ZURICH (Reuters) - Switzerland's mechanical and electrical engineering sector said on Tuesday that businesses and households need to start energy savings immediately and called for more government support to help companies weather surging power costs.

Last week Switzerland set a voluntary gas savings target of 15% for the winter as Europe faces a potential gas shortage as a consequence of the Ukraine war. On Wednesday, the government is expected to announce new contingency plans for addressing possible future electricity shortages due to Switzerland's dependence on gas imports this winter.

SwissMEM, which represents mechanical and electrical engineering companies, said carbon reduction targets should be waived for companies that switch to heating oil from gas, and the government should provide incentives for owners of reserve power stations and streamline regulatory approvals for industries that switch production to nights or Sundays.

It proposed that energy savings start immediately, and homes, offices, production plants, museums and shopping centres should not be heated to more than 19°C (66.2°F) this winter.

New orders in the mechanical and engineering sector rose by 10.1% in the first half of 2022, sales swelled by 12.1% and exports increased by 9% year on year, SwissMEM said in a statement.

However, supply chain problems and soaring energy and commodity prices pushed up production costs just as the euro undergoes rapid nominal depreciation versus the Swiss franc.

"All these factors are putting pressure on firms' margins. On top of all this there is the looming threat of energy shortages this winter. These must be prevented at all costs," the association said.

Not all MEM members are in a position to use flexible planning to cope with power cuts that would halt output at companies that need high temperatures for products, it said.

Industrial companies that rely on uninterrupted power supplies must be exempted from any gas and electricity rationing that the government has said it could impose under a worst-case scenario.

The association also called on the government to review its longer-term energy strategy, saying: "It is clear from the current situation that we cannot abandon both nuclear and fossil fuels at the same time."

(Reporting by Michael Shields; Editing by Susan Fenton)