Expert opinion at HEC Lausanne (UNIL) - The Confederation is considering a financial aid system for Swiss companies that should be available by next winter. Should we be surprised by this state intervention in support of private companies?
The opinion of Professor Ann van Ackere, Department of Operations at HEC Lausanne (UNIL)
To the question “Should we be surprised by this state intervention in support of private companies?”, the answer is no. The energy supply, and electricity in particular, are essential for the country's economy and the quality of life of its population.
Preventive measures are possible, such as UNIL’s decision to lower the temperature to 20°C. While such measures may help, their impact is limited.
But is the Swiss population ready to accept restrictive/authoritarian decisions to avoid a shortage? UNIL's initiative has already generated some reactions. Compare this to Italy, which has just imposed a minimum setting of 27°C for air-conditioning in summer and a maximum of 19°C in winter in public buildings. (Politico article, 28.4.2022)
More importantly, the size of some market players is such that the failure of one company could lead to shortages or even power cuts across the country. The UK experienced this last year in the context of gas supply: the UK had to act massively to prevent many people from being exposed to the cold. (SkyNews article, 25.4.2021)
This issue was already raised in 2018 by Prof. Ann van Ackere, Department of Operations at HEC Lausanne (UNIL) and her co-authors Erik R. Larsen and Sebastian Osorio, in the article on HECimpact, entitled "Keeping the lights on: are electricity firms the next “too big to fail” crisis?”, and based on their research paper "Can electricity companies be too big to fail?", Energy Policy, 2018.