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EUROPEAN GUIDE TO ENERGY AUSTRIA
TRANSPOSING the Third Energy Package enacted by the European Union caused profound changes to the Austrian energy market. During the year 2012 the implementation process has been finalized. Taking into account the shrinking oil and gas reserves and environmental concerns the European and also the Austrian legislator have put emphasis on energy efficiency and renewable energies in 2012. In the future another big topic will be the possible exploration for shale gas in Lower Austria.
In November 2011 a new Gas Act 2011 (Gaswirtschaftsgesetz 2011) has been enacted implementing the Third Energy Package and introducing a new market model to the Austrian gas market. In Section 41 GWG 2011 the legislator authorized the national regulatory authority (E-Control) to set by way of an ordinance more detailed rules for market participants. Therefore E-Control has published the Gas Market Model Ordinance 2012 (Gasmarktmodell- Verordnung 2012) providing more detailed provisions regarding network access, capacity management and balancing. In September 2012 the Gas System Charges Ordinance 2013 (Gas-Systemnutzungsentgelte- Verordnung 2013) followed, which sets the tariffs on transmission level as of 1 January 2013.
The most important change to the Austrian market model will be the implementation of an Entry/Exit System, where system users can book entry and exit capacities independently, allowing the system users to transport gas to/from a Virtual Trading Point (VTP) from/to the Austrian border. The VTP is a virtual point in the market area, where gas can be traded without the necessity of booking entry or exit capacities. According to the Gas Act 2011 Austria will be divided into three Market Areas: Market Area East, Market Area Tyrol and Market Area Vorarlberg. For each Market Area the transmission system operators will appoint a Market Area Manager. On distribution level each Market Area corresponds to a Distribution Area. The distribution system is a regional pipeline system, for the supply of consumers. Each Distribution Area has a Distribution Area Manager, which is appointed by the operators of the distribution systems.
With the GWG 2011 all unbundling options for transmission system operators listed in Directive 2009/73/EC have been implemented. Therefore Austrian transmission system operators can choose between ownership-unbundling, the ISO-model, the ITOmodel or the ITO-plus model. At the moment just one transmission system operator, GAS CONNECT AUSTRIA GmbH, has been certified as ITO. Regarding the Austrian North-South connection, the Trans Austria Gasleitung, and the West-East connection, the West Austria Gasleitung, the operators are still in their certification procedures.
In the electricity sector the implementation of the unbundling provisions of Directive 2009/72/EC was the most substantial change. Correspondingly to the Gas Act all unbundling options have been transposed into Austrian Law. With the enacting of the Electricity Industry and Organization Act 2010 (ElWOG) the Third Energy Package has been transposed into Austrian law. In Austria the ElWOG 2010 is just an enabling act and therefore the federal states (Bundesländer) had to enact implementing laws. In July this year finally also the last Bundesländer have amended their regional Electricity Industry and Organization Acts.
On 25 October 2012 a new Energy Efficiency Directive has been issued by the European Union in order to achieve the European target to increase energy efficiency by 20% until 2020. According to the European Commission from the current perspective only 10% will be achieved, whereas with the implementation of the Directive 17% could be reached. The Directive requires the member states to define national energy efficiency targets based on the European target and obliges the public sector to purchase services, products or buildings taking into consideration their energy efficiency. In particular every year 3% of the total floor area owned by public bodies have to be renovated. Also companies will have to get active in this area. For large companies energy audits will be compulsory, which will have to be promoted by the member states. Furthermore the member states will have to set up energy efficiency obligation schemes to drive improvements also in households, industry and the transport sector. For customers the Directive will bring more transparency by guaranteeing accurate measurements, billing based on actual consumption and access to all relevant information regarding their consumption. A whole chapter of the Directive is dedicated to efficiency in energy supply, especially in heating and cooling and in energy transport. With the presentation of a draft of the new Energy Efficiency Law in March 2012 Austria already started the implementation process. Austria´s targets for 2020 are: to achieve a share of 34% of renewable energies, a 20% increase of energy efficiency and a reduction of CO2 of 16% in the non ETS (Emmission Trading Scheme) sector and of 21% in the ETS sector.
The draft Austrian Energy Efficiency Law is based on a four pillar model:
According to the draft Energy Efficiency Law companies will have to implement an energy management system or have energy audits/advice regularly depending on their company size. Mediumsized and large companies will have to appoint energy officers. Small companies are excepted from these obligations. If efficiency measures will not be set, compensation payments can be made.
According to the draft Energy Efficiency Law companies will have to take measures resulting from energy management systems or energy audits, when costs will be amortized during the next five years. In the future the collected energy efficiency contribution shall be contributed to the promotion of energy efficiency measures. The consultation phase of the Austrian Energy Efficiency Law started in autumn 2012.
GREEN ENERGY ACT 2012
In Austria the promotion of electricity generation using renewable energies is regulated by the Green Energy Act. Green energy plants are promoted by way of purchasing the generated green electricity to special feedin tariffs, as long as there are sufficient funds. For the administration a clearing and settlement agency for green energy (OeMAG) has been established, which is responsible for the purchase and sale of green energy.
In July 2012 the new Green Energy Act 2012 (Ökostromgesetz 2012) entered into force and opened the way to new investments in renewable energies. During the last years the development of new projects in this sector has nearly come to a standstill. The waiting lists for subsidies were sheer endless. Therefore the provisions of the Green Energy Act 2012 regarding the reduction of the waiting lists entered into force earlier. For hydro plants a reduction of the waiting list has been achieved by raising the yearly subsidies to an amount of 16 million Euro and with the payment of an additional single subsidy of 20 million Euro. In the photovoltaic sector for applications, which have been submitted before the 1 January 2011, OeMAG was obliged to conclude entry contracts, regardless of a possible exceedance of the contingent with a reduction between 2,5 und 22,5% to the existing feedin tariff (depending on the level of tariff applied for and the year of the ranking). For the reduction of the waiting list regarding photovoltaic plants an additional single subsidy of 28 million Euro has been provided. For wind power plants an additional single payment of 80 million Euro has been made. Another important change is the new way of raising funds for subsidies. The consumer makes its contribution by paying a fee (Ökostromförderbeitrag) in addition to the system charge. Furthermore a lump sum (Ökostrompauschale) has to be paid by consumers. On 18 September 2012 the new Green Energy Feedin Tariff Ordinance 2012 has been published in the Federal Law Gazette, setting the new feed-in tariffs for green energy plants.
TREND SHALE GAS
In Austria, OMV AG has started to explore the potential of the Wiener Becken (part of lower Austria) regarding shale gas. As soon as the exploration plans became public, a citizens initiative has been formed. Due to this negative response from the general public, OMV AG started working on a clean fracking method, which abstains from the use of chemicals, using sand, starch and water. In September OMV declared to stop such plans.
In July 2012 the Austrian Parliament enacted an amendment to the existing Act on mining (Bergbaugesetz) implementing the environmental impact assessment for the production of shale gas and thereby changing the legal framework for such production.