Austria (2013)

Degree of reliance on imported energy:

Austria imports most of its oil from Kazakhstan. The imported crude oil is primarily transported via the Adria Wien Pipeline (AWP) to the refinery in Schwechat. The largest Austrian petroleum company, OMV AG, is 31.5%-owned by the state and it is the biggest integrated petroleum company in Central Europe. It undertakes petroleum exploration and production (E&P), refining, wholesale and retail sales, both domestically and internationally. Its biggest E&P activities are carried out in Austria and Romania. The company holds significant stakes in other petroleum companies abroad – for example, it owns a majority of share in Petrom SA (the largest petroleum company in Romania) and has a 97% stake in Petrol Ofisi (a leading retail and commercial petroleum company in Turkey).

To satisfy its national gas demand, Austria is highly dependent on imports, its domestic production being limited to 1.7 billion cubic meters/year in 2010. In that year, Austria imported 78% of its national consumption, with 67% from Russia, 18% from Germany and the rest from Norway. Both Russia and Norway sell their gas to Austria on the basis of long-term ‘take or pay’ contracts.

Austria exports approximately 80% of the natural gas it physically imports, with most of these exports going to Italy. Other exports go to Germany. Physical reverse-flow capabilities from Germany to Austria have been operational since April 2011 and from Italy to Austria since October 2011.

Main sources of Energy:

Austria has a relatively large share of renewable energy in its total primary energy supply (TPES). In 2010, over 28% of TPES in Austria was produced from renewable sources — about 17% from wind, solar and geothermal power, 10% from hydropower and 2% from combustible waste. Fossil fuels — comprised of oil, natural gas and coal (37%, 25% and 10%, respectively) — accounted for the remaining 70% of TPES. Around 30% of Austria’s energy needs are produced domestically. Despite having a significant share of fossil fuels in TPES, Austria produces about two-thirds of its electricity from renewable-energy sources.

With large hydro resources, Austria intends to meet its overall 34% renewables (RES) target largely through the increase of renewables in the power mix. As such, Austria has set itself the highest target of electricity from renewables (RES-E) of any EU Member State: 71% in 2020.

Country:

Austria

Extent of the network:

Austria occupies a central position in the EU electricity network and is connected to all of its neighbouring countries, with the exception of the Slovak Republic.

Capacity concerns:

The need for more interconnections with Italy, Slovenia and Switzerland is considerable. The current high levels of utilisation at the Czech/Austrian border may be the result of high loop flows, caused by the generation situation in Germany.

Potential for Renewable Energy:

Solar

Solar thermal power has been heavily supported at state level for decades and, alongside Greece, Austria is one of the countries with the highest square meterage of collectors per head of population.

Wind Energy

Although Austria is a landlocked country with a distinguished hilly topography, meteorological preconditions permit the utilization of wind power. First calculations on the basis of wind measuring data assessed at the meteorological stations in the early 1980s rendered the result of annually approx. 6,600 to 10,000 gigawatt-hour (GWh) of technically exploitable wind energy potential in Austria.

Biomass

Austria has intensively utilised the biomass available to it, thanks to its extensive forests, and has even been doing so since before the Industrial Revolution. In terms of domestic heating, this “old” form of biomass was still very much in use up to the 1980s and 1990s and was also responsible for the relatively high percentage of renewable energy generated in Austria. This form of biomass that was often used for heating in multi-purpose furnaces in the home has since been massively overtaken in almost every region of Austria by the intensive expansion of natural gas networks and gas heating systems. This development was more pronounced up to the start of the new millennium than the development of “new” biomass, such as the use of wood pellet-based district heating systems.

Biogas

The estimated total biogas potential per year lies between 265 and 414 million m3. With an average consumption of 1.200 nm3 per vehicle per annum a total amount of 345,000 vehicles could run on biogas in Austria. In comparison to that 4,600 vehicles were driving on natural gas in Austria in 2009. If energy crops and animal manure potential is considered, the total theoretical biogas potential amounts to 2.47 billion m3. If entire biogas potential would be used for transportation sector, 27% of conventional fuels could be replaced through biomethane.

Hydro

A significant proportion of electricity generated in Austria has traditionally come from (large scale) hydroelectric power stations. For over a century, this form of energy has been used for economic reasons and also because of its local availability in the Alpine region that is abundant in water and, especially after the Second World War, also along the River Danube. In the 1990s, it already constituted over 70% of total electricity production. Due to rising fossil fuel prices since then, and the resulting higher electricity prices in Europe, the production of electricity from new large-scale hydroelectric power plants in Austria once again became economically attractive to the now more liberalised European electricity market.

Potential for Energy Efficiency:

Energy intensities of the Austrian economy did not show substantial changes in the period from 1990 to 2010, where primary energy intensity decreased by 10.7%, and final energy intensity by 6.6%. This can be attributed to a decreasing in overall energy efficiency in the industrial sector following 2007, and the weak economic situation in 2009, contributed to a 9% fall in industry energy efficiency in that period.

As of 2013, notable areas for improvement in the Austrian economy include in appliances and in the transport sector. The current National Energy Efficiency Action Plan (NEEAP) provides little information on policies or measures to address appliance efficiency, aside from advice and information programs and a current mandatory standard to remove the least efficient appliances, however no measure are planned in the coming period. In transport, there is a lack of policy that takes energy efficiency into account, and no binding savings target for the sector to 2020. Austria also suffers from “fuel tourism”, due to their lower fuel taxes relative to neighbouring countries increasing the purchase of Austrian fuel by large transport outfits, increasing the overall consumption of the sector, particularly following the 2009 economic downturn.

Ownership:

Electricity

Austria liberalised its electricity market, ahead of the EU regulation, in 2001. Most of the significant electricity suppliers are partially owned by the federal and state governments. Public ownership of the main companies is prescribed by legislation with constitutional status. The transmission network has been unbundled and it is divided into two regions, each of which is operated by a different company. Both the electricity and the gas markets are concentrated in the hands of big suppliers: about 70% of the gas market is controlled by OMV, while the biggest electricity supplier and generator, Verbund (51% owned by the state), accounts for approximately half of all electricity production. Similarly to all the other electricity generators, its portfolio comprises a mix of small and large hydropower stations. EnergieAllianz is the second-largest electricity company, indirectly owned by two states and the city of Vienna. A range of smaller regional and municipal electricity and gas suppliers are active in Austria, mostly in the regions and municipalities which own them.

Gas

EconGas is the largest Austrian gas supplier. OMV owns 50% of EconGas; the remaining 50% is in the hands of five municipal and state utilities in Vienna, Linz, Upper Austria, Lower Austria, and Burgenland. OMV also owns the Baumgarten gas hub operator.

Structure / extent of competition:

Electricity

Austria has achieved progress with regard to fostering competition in the retail market for electricity. In 2010, market concentration at retail level was moderate to high. The market share of the three largest household suppliers was 58%, with the five largest suppliers having 71%. Of the roughly 140 retailers, many operate only at local or regional level. The close cooperation between Wien Energie, ENV and BEWAG through Energieallianz had already increased market concentration at the outset of Austria’s market liberalisation.

Austria’s wholesale trading market is joined with Germany and forms a single price zone (both Over-the-Counter and power exchange). In this wider market, Austrian traders have a relatively small market share. However, foreign wholesale traders are not very active in Austria, limiting themselves to sales to larger customers consuming between 10-20 GWh. In all, 11 domestic wholesale traders are active in the country. APG is a member of the Central Auction Office (CAO), which brings together the eight TSOs of the Central Eastern European (CEE) region.

Austrian Power Grid AG (APG) is the main Austrian electricity TSO, owning approximately 94% of the Austrian high-voltage electricity grid (6 454 km) and operating it as well. APG has been certified as an Independent Transmission Operator (ITO). At distribution level in the electricity sector, there are approximately 130 DSOs. Legal ownership unbundling has so far been the preferred unbundling model, leaving DSOs rather limited control over the power grids, which they rent from a vertically integrated producer and/or supplier.

Gas

Market concentration at retail level is high. The combined market share of the three largest suppliers was 74% in 2010, with the largest market share held by Energieallianz (61%). The twelve gas suppliers in Austria are all majority-owned by regional governments and are partially interlinked. Switching is low, with 1.1% of all end-customers switching supplier in 2011. Since market opening, only around 6% of all final customers have changed supplier. Gas prices are not regulated in Austria, neither for households nor for industrial customers.

Austria’s gas TSO Gas Connect Austria GmbH has also been certified as an ITO. The certification procedures for Trans Austria Gasleitung GmbH (TAG), Baumgarten Oberkappel Gasleitungsges. m.b.H. (BOG) and Nabucco are still pending.

Existence of an energy framework and programmes to promote sustainable energy:

RES-E

The key policy instrument at the national level to support RES-E is the Austrian Green Electricity Act (Ökostromgesetz). After its adoption in 2002, finely tuned feed-in tariffs caused a particularly strong deployment of wind energy, biomass and biogas. After a decline of support levels and further modifications (i.e. budget restrictions and reduced guaranteed duration of support) in recent years, the development of new RES-E projects in Austria had almost stopped. As a consequence, on September 23rd, 2009, the federal parliament passed an extensive amendment which included several improvements, notably longer support periods, adjusted tariffs and slightly increased and technology independent overall budget. These changes have recently stimulated capacity additions especially in wind and hydro power and biomass plants.

RES-H&C

In Austria, national support policy for RES-H&C projects is provided by the Environmental Support Act (Umwelförderungsgesetz), which promotes RES mainly in the form of investment grants. It has recently been revised and a new extended support structure has been effective since October 1st 2009. This national regulation addresses commercial entities, non-profit organizations, public institutions and utilities. Private households receive investment grants for RES-H&C projects at the provincial level. From a financial point of view and also with regard to the observed effectiveness, these programs clearly represent the main promotion scheme for RES-H in Austria.

RES-T

In Austria, RES in the transport sector are mainly supported in the form of biofuels. The support strategy is twofold. On the one hand, minimum blending obligations guarantee market access for biogenic products and, on the other hand, tax incentives provide financial support for biofuel production.

The Resource Efficiency Action Plan (REAP)

The Resource Efficiency Action Plan (REAP) was published in early 2012 by the Austrian Federal Ministry of Agriculture, Forestry, Environment and Water Management. It is an ongoing process and entails a multi-stakeholder partnership approach to achieving increased resource efficiency in Austria. Its overall objectives are to reduce the environmental impacts of resource consumption to create new markets, export opportunities and green jobs and to support the economy and industry in designing innovative and sustainable technologies, products and services.

The REAP provides an analysis of recent resource efficiency trends and sets medium and long term national targets for increased resource efficiency. By 2020, resource consumption should be fully decoupled from economy growth, and resource efficiency should be increased by at least 50% compared with 2008. As a long-term goal (2050) has been set to accomplish a 4/10 gain in resource efficiency. In order to achieve these medium and long-term goals, REAP includes a short term implementation programme (2012-13), which focuses on four main “action fields”: i) resource-efficient production, ii) public procurement, iii) a closed loop economy and iv) raising awareness, in particular identifying specific measures of sustainable consumption and production, and identifying measures of the cascading use of natural resources.

All renewable electricity generation technologies are eligible for the Austrian feed-in tariff. In contrast to the tariff, subsidies are available for small and medium-sized hydro-electric power stations only.

Feed-in tariff. In Austria, electricity from renewable sources is supported mainly through a feed-in tariff, which is set out in the ÖSG 2012 and the regulations related thereto. The operators of renewable energy plants are entitled against the government purchasing agency, the so-called Ökostromabwicklungsstelle (hereinafter called "Clearing and Settlement Agency"), to the conclusion of a contract on the purchase of the electricity they produce ("obligation to enter into a contract").
Subsidy I. The construction of small and medium-sized hydro-electric power stations is subsidised by investment grants. The legal basis of these grants is the ÖSG 2012 in conjunction with the applicable subsidy directive.
Subsidy II. Additionally to the feed-in tariff, an investment subsidy is granted for PV installations on buildings exceeding 5 kW.
Subsidy III. Furthermore, subsidies are granted for small PV installations with a maximum capacity of 5 kW.

Current energy debates or legislation:

There have been plans for some years by the Austrian energy industry to expand large scale -hydroelectric power stations, completely independently of renewable energy and climate protection targets, which have now been included in the Austrian Energy Strategy to facilitate their political implementation.

The obstacles in the way of the expansion of large-scale hydroelectric power lay not so much in its financial viability but rather in resistance by the nature conservation movement and the Green party, and, more recently, in the conflict over the strict interpretation of the EU Water Framework Directive. Owing to the competitive market that already exists, the Energy Strategy does not provide for any financial subsidies for large-scale hydroelectric power with a bottleneck capacity of over 30 MW.

Major energy studies:

European Energy Network

Austria is member of the EnR, which is a voluntary network of European energy agencies which aims at promoting sustainable energy good and best practice. EnR also strengthens cooperation between members and other key European actors on all sustainable energy issues (energy efficiency, sustainable transport and renewable energy).

Role of government:

Austria’s energy policy is simultaneously conducted at two levels, the federal and the joint federal/state levels. The federal Constitution allocates responsibilities either to the federal level or to the joint federal and state level. Energy policy is formulated and implemented in close co-operation with the social partner organisations, which represent important groups of society (employers, employees, agriculture), and in dialogue with non-governmental organisations (NGOs) and the public. At the regional level, the governments of the nine states have responsibility for policy making, setting subsidy levels, and implementing regulatory control of energy companies. Most of the states have energy agencies undertaking activities similar to that of the Austrian Energy Agency.

The most important Austrian energy policy making institutions at the federal level are:

Federal Ministry of Economics and Labour: the main government institution responsible for energy matters at the federal level e.g. for the “Gewerbeordnung” and “ELWOG”
Federal Ministry of Agriculture, Forestry, Environment and Water Management: responsible for environmental protection, including climate change and emissions from combustion e.g. for the “Abfallwirtschaftsgesetz”
Federal Ministry of Transport, Innovation and Technology: responsible for transport policy and energy R&D
Federal Ministry of Finance: responsible of setting energy taxes
The approval of plants for the production of energy from renewable sources falls within the jurisdiction of the district administrative authority. By the one-stop-shop principle, there is only one authority as a focal point for the approval process.

Government agencies in sustainable energy:

ESV - Upper-Austria Energy Agency (O.Ö. Energiesparverband)

Upper-Austria Energy Agency (ESV) is the regional energy agency of Oberösterreich/Upper Austria, an industrial region in the Northern part of Austria. ESV supports the regional government in the development of its energy strategies and is responsible for the implementation of most of its programmes. Presently, ESV is involved in the development and implementation of the Regional Action Plan for 2030. The main activities of the agency include comprehensive information and awareness raising activities on sustainable energy production and use, e.g. the provision of energy advice to private households, public bodies and companies (more than 15,000 advice sessions/year), media campaigns, training courses or publications for different target groups. This also includes the organisation of meetings and events, e.g. the international conference World Sustainable Energy Days, one of the largest annual European conferences on sustainable energy (850 participants from 53 countries in 2009). The agency provides a number of services for municipalities, including support in tender procedures for new buildings/installations and local energy strategies.

Austrian Energy Agency

The Austrian Energy Agency was founded in 1977 as a non-profit-making scientific association. Its General Assembly comprises some of the most distinguished representatives of the Austrian Energy Sector. In 2009 the Austrian Energy Agency counted among its approximately 50 members the federal government, eight out of the nine federal provinces (Bundesländer), important enterprises from the fields of energy industry and energy engineering, banks, interest groups, scientific organisations, energy agencies and consulting companies. This diversified structure is an essential prerequisite for independence and at the same time guarantees a good balance between theoretical scientific background and practical approach.

Energy planning procedures:

The new Green Electricity Act 2012 increases the funding volume to about EUR 50 million, thus serving as a further incentive to further expand the number of facilities producing green electricity. This offensive is designed to boost the share of electricity consumption generated by renewable energy sources to 85% by the year 2020, a top performance in global comparison. Moreover, some 3,300 experts in Austria are focusing on smart grids i.e. the intelligent network management on the basis of modern information and communication technologies. The objective is to equip 80% of Austrian households with smart meters, in the years ahead.

In July 2002 the Austrian Parliament adopted a new legislation to comply with the RES-E directive, the Ökostromgesetz/Green Electricity Act (Official Journal BGBl I 2002/244). This act implements a feed-in system for RES and makes it mandatory to purchase "green” electricity. Compared to the former Electricity Act ElWOG (Official Journal BGBl I 2000/121) the feed-in system also applies to small hydroelectric power plants (up to 10 MW). Before the Green Electricity Act came into force there was a system of green certificates for small hydropower plants. The Green Electricity Act introduced a system of guarantees of origin. Grid operators are obliged to give electronic proof of origin to RES-producers, with the provincial head (Landeshauptmann) in charge of this system.

A fast-track planning procedure for producers of renewable electricity does not exist. The Provincial governments are (more or less) in charge of the procedure and many different permissions have to be obtained (electricity act, protection of landscape, regional development plan, security of aviation). Only projects with a size of more than 20 MW enjoy a centralised planning procedure at the provincial government level. Grid access is also a stumbling block in RE system planning, with no guarantees available for RE operators regarding transmission or distribution of RES-E, and the liability for all grid reinforcements and connections resting with the RE producer.

National Renewable Energy Action Plan

Under Directive 2009/28/EC of the European Commission, the Austrian government created the 2010 NREAP, based on the Austrian Energy Strategy 2010. Targets under this plan stretch to 2020, and include:

A 34% target share of renewable energy in gross final consumption,
13% reductions in final energy consumption and an 18% increase in renewable energy volume (based on 2008 levels),
A 10% target for biofuels in the share of renewable energy
A targeted 9,217 ktoe of energy from renewable sources by 2020

Energy regulator Date of creation:

E-Control (ECG) is the government regulator for electricity and natural gas markets in Austria. It was founded in 2001 on the basis of the Energy Liberalisation Act. On 3 March 2011, the company was transformed into a public authority by virtue of the E-Control-Gesetz (E-Control Act).

Degree of independence:

E-Control is an independent regulatory authority.

Regulatory framework for sustainable energy:

In Austria, electricity from renewable sources is granted access to the grid according to the general legislation on energy and according to non-discriminatory principles. Only the use of the grid by electricity from renewable energy sources is subject to a specific order. When grid capacity is insufficient, grid operators are obliged to give priority transmission to electricity from renewable sources.

ÖSG 2012 (Bundesgesetz, mit dem Neuregelungen auf dem Gebiet der Elektrizitätserzeugung aus Erneuerbaren Energieträgern und auf dem Gebiet der Kraft-Wärme-Kopplung erlassen werden - Federal Act on the Support of Electricity Produced from Renewable Energy Sources)
Subsidy Directive 2012 (Förderungsrichtlinien 2012 für die Gewährung von Investitionszuschüssen gemäß § 24 bis § 27 Ökostromgesetz für die Errichtung von KWK-Anlagen auf der Basis von Ablauge, Kleinwasserkraftanlagen und mittleren Wasserkraftwerken sowie § 7 KWK-Gesetz zur Errichtung von KWK-Anlagen - Subsidy Directive 2012 on the granting of investment subsidies, as set out in § 12, § 12a and § 13a of the ÖSG 2012, for the construction of CHP plants and small and medium-sized hydro-power plants)
Ökostromverordnung 2012 (Verordnung, mit der Preise für die Abnahme elektrischer Energie aus Ökostromanlagen auf Grund von Verträgen festgesetzt werden, zu deren Abschluss die Ökostromabwicklungsstelle im Jahr 2012 verpflichtet ist - Regulation setting the prices for the purchase of electricity generated by green power plants as set out in the purchase agreements the Clearing and Settlement Agency is obliged to enter into in 2012)
PV Guidelines 2013 (Leitfaden Photovoltaik-Anlagen 2013).

The annual budget regarding net support expenditures for yearly new RES-E installations is set at 21 million Euros, which has resulted in € 340 million of cumulative net support expenditures for new RES-E installations in 2009. The budget is defined over the difference between the feed-in-tariff and the electricity market price and correspondingly the electricity market price development will have an influence on the effectively available support volumes. The budget is not pre-allocated to specific technologies, with the exception of photovoltaic installations, where the reserved annual budget is set to 10% (€ 2.1 million).

Regulatory roles:

E-Control is entrusted with the task of monitoring, accompanying and, if necessary, regulating the liberalisation of the Austrian electricity and gas markets.

E-Control's duties are:

Setting the framework:
establishing market rules for competition
regulating network tariffs
Exercising market oversight:
identifying and remedying competition violations
tracking and analysing market development

Role of government department in energy regulation:

As of 3 March 2011, E-Control was transformed into a public authority, but remains independent from the government. Other government agencies are only involved in energy regulation when breaches of market competition rules occur, in which case the Federal Competition Authority and Federal Cartel Prosecutor can be called upon by E-Control for their involvement.

Regulatory barriers:

Stop-and-go support policy

While the applied feed-in tariffs and other incentives for renewable energy projects can be generally considered as favourable for the development of PV, wind and other renewable energy technologies, the unclear funding situation due to the annual support cap can lead to considerable latencies. This “stop and go” support policy could therefore scare off possible investors.

The new subsidy-structure for PV (a mixture of invest-subsidy and feed in tariff) is expected to cause unnecessary bureaucracy. For a positive administration decision too many public authorities have to be contacted, whereas projects cannot be started until the disbursement of subsidies is granted. Therefore, the implementation of PV projects could be delayed.

The decentralised political system of the Federal Republic of Austria can lead to non-transparencies and sometimes even hampers the implementation of national renewable energy targets. Furthermore, it has a negative effect on the realisation of new support schemes and leads to inefficient administrative steps and in some cases even double subsidies.

There is a lack of harmonised guidelines for the installation of renewable energy plants. If there are no clear national guidelines, the quality of the RES installations could suffer which would eventually lead to a general loss of trust in the renewable energy sector. Some federal states in Austria developed their own planning guideline while others failed to do so. Currently, Austria is trying to harmonise these guidelines with own regulations (so called 15a arrangements). However, the implementation of guidelines still lies in the competency of the federal states.

Similar to the electricity sector, the federal political system of Austria may in some cases also constitute a barrier to the development of the renewable heating sector. As the heating legislation as well as the planning and building laws lie in the competency of the federal states, the harmonisation of the different regulations can prove difficult.

References:

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[Accessed 30th November]

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[Accessed 1st December]

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