Energy producers warn

New “Austria surcharge” looms for electricity prices

The desired expansion of PV systems, for example, is likely to come to a standstill next year, according to energy producers.(Bild: zVg)

The "Cheaper Electricity Act" presented by the government will have the opposite effect, domestic energy producers are sounding the alarm. Due to additional grid costs, more expensive loans, etc., electricity will inevitably cost more and imports will increase. Energy communities are also threatened with burdens and complicated billing.

As reported, the draft law is now in political negotiations, as it requires a two-thirds majority in parliament. However, this is currently unlikely, as criticism is becoming increasingly strong - including from the energy industry: "Better no law than this one," warns Martina Prechtl-Grundnig, representative of private producers of renewable energy. The industry's objections have hardly been taken on board. In its current form, the planned regulation is "a deceptive package that will not result in cheaper electricity for households and businesses".

On the contrary: domestic green electricity would become more expensive compared to imported coal and nuclear energy. Planned investments worth billions in new wind, PV and hydropower plants could therefore be canceled or take place abroad. Even the successful model of energy communities would be severely affected, warns Burgenland Energie CEO Stephan Sharma. There are currently already 3,800 of these across Austria, which generate electricity themselves with PV systems and sell it cheaply within the community.

Electricity at 10 cents for energy communities
However, instead of making things easier, there is a threat of additional barriers due to complicated billing for feeding electricity into the grid. Furthermore, it makes no sense to have to set up an association for each community, and the promised simple sample invoice for a clear overview of the traded electricity is also still missing. The potential is huge: "We can currently offer guaranteed wind and solar power for 10 cents over 20 years throughout Austria via our energy community." The Kronen Zeitung is also a partner.

The desired expansion of PV systems, for example, is likely to stall next year, according to energy producers.(Bild: zVg)

The industry lists the specific reasons why electricity is likely to become more expensive instead of cheaper: The cap on sales prices at a maximum of 90 euros per megawatt hour (MWh) limits the potential revenue. Banks would therefore calculate lower profit expectations and raise the interest rates on loans for new projects due to the higher risk. Secondly, capping production peaks by 15 percent when a lot of solar or wind power is being fed into the grid has the effect of slowing down the desired low-cost domestic green energy.

Thirdly, Austria is already number two in Europe in terms of feed-in tariffs for producers, while neighboring countries often do not even have them. 

Zone with Germany called for
All of this together would mean an "Austrian surcharge" on the electricity price. In addition, electricity has already become around 2 cents per kWh more expensive since the dissolution of the common market with Germany alone. That costs us 1.3 billion euros. The government would have to start talks with Berlin immediately in order to form a zone again.

In general, politicians could do much more, criticizes Burgenland Energie boss Sharma. Electricity has become 20 percent cheaper in the last two years, but this has not reached consumers because grid costs, for example, have risen by 40 percent. "There are three factors on the energy bill: the energy part, the grid costs and taxes and levies. Two of the three are in the hands of the federal government."

In order to make grid expansion cheaper, one option would be to invest via a separate company with federal liability. This would then require a uniform grid tariff for all federal states, as there are currently over 100 with widely varying costs.