In its strategy paper dated 21 February 2007, the Federal Council named foreign policy on energy as the fourth pillar of its overall energy policy. The strategy defines the economic and political framework and is based on international agreements, creating the requisite legal certainty for the economically and ecologically viable exchange of electricity with other countries.
 
When it comes to electricity trading, Switzerland is far from an island: indeed, as a "water fortress" and an electricity hub, it plays a key role in the European interconnected grid. Good boundary conditions and sufficient line capacity are therefore essential for energy security in Switzerland.

Switzerland's integration in the European electricity landscape is essential in view of the EU's market liberalisation policy and for reasons related to network technology. An active, dynamic exchange of electricity to offset capacity surpluses and deficits between the countries in Europe is essential for energy security. Yet the current lack of grid capacity poses a challenge to shares of electricity imports.
With this in mind, Switzerland is aiming to sign a bilateral accord on electricity with the EU. The aim is to enable the successful, non-discriminatory integration of Switzerland in the European electricity grid and common market despite its non-EU member status. Negotiations to this effect are in full swing and should be completed by the end of 2010.

Switzerland must secure and strengthen its position as an important hub within the European electricity market. swisselectric members view a bilateral electricity accord with the EU as essential.

The accord must cover the following core areas, among others:

• Cross-border electricity trading
• Market access
• Recognition of proof of origin
• Co-determination right within the emerging European common market for electricity 
• Retention of long-term contracts
  

swisselectric supports the signing of an electricity accord with the EU. Without such an accord, Switzerland runs the risk of becoming an island within the European electricity market. This would reduce the value of Swiss hydroelectricity and result in more expensive ancilllary services, higher costs for imports as well as obstacles to exports, a rising price level within Switzerland, and reduced energy security for the country.

The EU for its part seeks an electricity accord with Switzerland in order to implement its energy, climate and environmental policy throughout the entire European electricity market.