IN Brief:
- Swissgrid reduced first-half procurement costs by 50% to CHF150.1 million.
- Transmission network modernisation investment reached CHF164.8 million during the same period.
- A new imbalance price mechanism, improved solar forecasts, AI optimisation, and revised control power procurement contributed to lower balancing costs.
Swissgrid cut procurement costs by half during the first six months of 2026 while investing CHF164.8 million in modernising Switzerland’s transmission network. The national grid operator reported procurement costs of CHF150.1 million for the period, down from CHF300.2 million a year earlier, as a new imbalance energy pricing mechanism and changes to control power procurement reduced balancing requirements and costs.
The new imbalance price mechanism was introduced at the start of 2026 and is intended to give balance groups a stronger financial incentive to keep their positions closer to the energy they actually inject into or withdraw from the system. Swissgrid says the change has reduced the quantity of control energy it needs to deploy, lowering the operating cost associated with maintaining system balance.
Control energy is one of the less visible costs of running a transmission system, but its importance grows as generation and demand patterns become more variable. When scheduled production and consumption diverge from actual system conditions, the grid operator needs resources able to increase or decrease output or demand quickly enough to restore balance. The cost of keeping those resources available and activating them forms part of the wider cost of operating the electricity system.
Swissgrid attributes the lower procurement bill to several measures. Improved photovoltaic generation forecasts developed with industry have reduced uncertainty around expected solar output, while AI optimisation is being used more widely in control energy processes. The company also changed the way it procures control power, with that measure alone producing CHF63.9 million of savings during the half year.
The reduction in operating expenditure sits alongside a substantial physical investment programme. Swissgrid invested CHF164.8 million during the period in transmission network modernisation, reflecting the continuing requirement for lines, substations, control systems, and digital infrastructure even as software and market mechanisms improve the use of existing assets. Net income for the six months was CHF37.8 million, compared with CHF45 million a year earlier, while revenue declined to CHF513.8 million from CHF795.5 million following lower tariffs for 2026.
Better forecasting, balancing incentives, and optimisation can reduce avoidable operating costs and extract more useful capacity from existing infrastructure, but they do not remove the need for reinforcement. Swissgrid has argued that approval processes for major network projects need to accelerate and supports proposed Grid express legislation intended to shorten delivery times for critical infrastructure.
The company is also participating in wider European efforts to increase capacity from existing networks. In September, Swissgrid joined seven other transmission system operators in a technology call focused on congestion, monitoring, forecasting, power flow control, and uprating. Those initiatives address the long development period for new transmission by looking for technologies and operating methods capable of raising the usable capability of assets already in service.
Switzerland’s position makes the cross-border dimension particularly important. Its transmission system is closely connected to neighbouring European networks, and Swissgrid expects the country to remain dependent on adequate import capacity during winter periods. The operator therefore regards the electricity agreement with the European Union as important to security of supply, access to European power markets, and participation in continental control energy platforms.
Participation in those platforms could widen the pool of balancing resources available to the Swiss system and allow control energy to be exchanged across a larger market. A broader balancing area can make it easier to match shortfalls and surpluses between systems, provided sufficient cross-border transmission capacity is available and market, control, and communications arrangements are aligned.
The half-year figures also show the operational importance of photovoltaic forecasting. Solar generation can change quickly with weather conditions and now contributes sufficient energy in many European systems for forecast errors to create material balancing requirements. Improving expected-output accuracy allows system operators and market participants to schedule resources more closely to real conditions, reducing corrective action later.
AI optimisation is being applied in the same operational area, although Swissgrid attributes the reported savings to a combination of market, forecasting, procurement, and software changes rather than to one technology. The imbalance price mechanism, improved solar forecasts, AI supported optimisation, and revised procurement have together reduced the need for control energy and lowered the cost of securing the capability that remains necessary.
The durability of those savings will become clearer as the year progresses. CHF164.8 million of capital investment in six months confirms that Switzerland remains in a transmission modernisation cycle even as balancing becomes more efficient. Rising renewable generation, electrified demand, and cross-border flows will continue to require both better operation of existing infrastructure and substantial physical network investment.
