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ENERGY

Switzerland mulls plan to nab Italy’s gas supply

The Swiss government is considering using a contractual clause to tap into Italy’s gas pipeline, a prospect that is already creating tension between the two countries.

Switzerland mulls plan to nab Italy’s gas supply
Gas pipeline creates tension between Switzerland and Italy. Image by David Mark from Pixabay

Neutral Switzerland is known for its role in mediating international conflicts, not creating them.

But according to a report in Tages-Anzeiger, this might change in the foreseeable future, as an impending gas shortage is threatening to drastically reduce the supply of this vital energy source to Switzerland.

As Switzerland doesn’t have its own gas storage facilities, it relies heavily on other nations, in particular Germany, for its supply.

However, Germany is seeking to maximise its own stocks, which means it could reduce or, if there is an extreme shortage, even stop exporting gas to Switzerland altogether.

Since Italy is also connected to this pipeline, Swiss authorities have already warned their Italian counterparts that they will use the gas from this pipeline for themselves.

While this may sound highly unethical, it is not illegal: the contract between the two countries states that, in the event of a crisis, Switzerland can keep the gas supplied by Germany, even if this act would stop the flow of gas towards Italy.

Not surprisingly, “the Italians have reacted strongly” to Switzerland’s stance, sparking unprecedented tensions between Bern and Rome, according to Tages-Anzeiger.

In the meantime, the Swiss are hoping this worst-case scenario can be avoided if everyone in the country starts to follow energy-saving measures.

Economy Minister Guy Parmelin has been urging businesses to switch from gas to oil, “and to do so immediately”.

“As of today, independently of market prices, we must build up reserves of fuel oil. If everyone waits until the autumn, we will have a logistical problem”, he added.

In the event of an actual shortage, “consumption restrictions may be ordered, for example restrictions on the heating of unoccupied buildings. The switching to biofuel could be imposed by ordinance”, Parmelin noted.

If the shortage persists, a quota would be implemented. Initially at least, private households and essential services, such as hospitals, will not be affected, but  “otherwise there will be no exceptions”.

READ MORE: ‘It could hit us hard’: Switzerland prepares for impending gas shortage

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ENERGY

Why your Italian electricity provider could change in 2024

A planned change in Italy’s electricity suppliers system means that many customers may be automatically assigned to a new provider in 2024. But what exactly is changing and who will it affect?

Why your Italian electricity provider could change in 2024

A long-planned reform of Italy’s utility suppliers system means that many customers around the country may have their current electricity provider automatically changed as of July 1st of this year.

But, as new details over the reform have emerged in recent days, it’s now easier to understand what the upcoming change will be all about and what it will mean for customers. 

What’s changing?

At the moment, electricity customers in Italy have two options.

You can sign up for an energy supply contract with tariffs set by the Italian national energy regulator Arera under what’s called mercato tutelato, or ‘protected market’.

Or you can sign up for a contract with a private supplier in the mercato libero (or ‘free’ market), with providers setting their own rates and being at liberty to offer a variety of discounts and promotions.

But, following the introduction of laws aimed at increasing market liberalisation in Italy, the ‘protected’ market option is now being phased out, with electricity contracts at state-controlled rates set to expire on July 1st 2024 (the original deadline fell on April 1st but was later postponed by three months). 

READ ALSO: Why you may need to switch your Italian energy supplier by 2024

This means that customers on protected contracts (approximately 4.5 million households according to the latest estimates) will have until the start of July to switch to a new provider (and contract) within the free market. 

What happens if I don’t make the switch?

Customers who don’t make the switch to a ‘free market’ provider by July 1st will be automatically assigned to a new supplier and placed under a ‘gradual protection contract’ (or servizio a tutele graduali)

This is a special three-year contract designed by national energy regulator Arera to smooth customers’ transition from the protected market to the free market. 

Under the contract, private suppliers will offer rates in line with or, at times, lower than previous ‘protected’ tariffs, with customers enjoying a fixed rate (i.e., not varying based on market price fluctuations) for the first 12 months. 

READ ALSO: At what time of day is electricity cheapest in Italy?

The switch to the ‘gradual protection’ contract will be free of charge and totally automatic, with previous direct debit arrangements set to be transferred to the new contract. 

The switch will apply to all households on protected electricity contracts, except customers identified as ‘vulnerable’ by Arera, who will continue to enjoy protected market tariffs beyond July 2024. These include people over 75, people with disabilities and severely ill patients. 

How are my bills going to change?

Automatically assigned private suppliers will apply rates generally in line with previous state-controlled tariffs. 

In some cases, the switch to the ‘gradual protection contract’ may even lead to non-negligible savings on your yearly electricity bill.

For instance, customers in Avellino, Benevento, Grosseto, Livorno, Pisa, Pistoia, Prato and Siena may see annual savings of up to 200 euros, according to a report from Italian news website Today. 

For any further information on ‘gradual protection’ contracts, see national energy regulator Arera’s website.

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