Policy measures should encourage competition among renewables in order to favour the most cost-effective ones. Energy and CO 2 taxes are being seriously considered. Such taxes could better internalise the external costs of using energy. Improvements in the tax system would send the right price signals to energy consumers and suppliers, allowing them to make the right decisions on fuel choice and investments to increase energy efficiency. A large number of companies are present in the electricity and natural gas sectors.
Suppliers have monopoly rights in their areas and set prices for final consumers.
These sectors are also characterised by strong involvement of local authorities in both ownership and regulation, e.g. price controls. Local authorities levy various taxes and hidden charges on the companies. These, together with the absence of competition, have contributed to high average electricity and gas prices, in particular for industrial customers. Thus, the initiative by the Swiss Government to introduce competition in the electricity sector is a timely, welcome move. This reform, envisaging regulated Third Party Access, can increase the efficiency of this sector and reduce prices for final consumers if it is well designed and regulated so as to avoid cross-subsidies and discrimination.