The ElWG will bring significant changes to charges for network use. Read here whether the electricity grid eventually becomes cheaper and who the winners and losers of Austria’s brand new electricity market law are going to be.
Previously favoured system users such as PV system operators will also have to pay charges for feeding electricity into the network. The jungle of different charges will be clarified. At the same time, E-Control will be given more autonomy in setting charges, which means that the statutory provisions themselves can and must become less detailed.
From 7 to 5: The new network charges
What remains: The ElWG will reduce the number of different charges from seven to five. The charges for use of the network (for the ongoing use of the network by feeders and consumers), the network loss fee (costs for compensation by feeders and consumers for physical network losses incurred by operators) and the fee for other services will remain unchanged.
Industry representatives such as Österreichs Energie welcome the greater proportion of the capacity component in network charges as a step towards a more user-based allocation of costs: “Network capacities are an expensive and valuable asset – we must use them carefully and make the best possible use of existing capacities. A performance limit prevents excessive investment and at the same time enables more facilities to be integrated into the system quickly." Stakeholders representing PV plant operators disagree.
→ The most discussed change is undoubtedly the one planned for the charges for use of the network (Section 120 ElWG). This charge compensates system operators for the costs of constructing, expanding, maintaining and operating the system, as well as for metering equipment, data readout, etc., i.e. for providing an operational network. In future, system users feeding into the network, such as operators of PV systems, will also have to pay this charge.
However, energy storage systems that are operated in a way supporting the system (e.g. batteries, pumped storage, electrolysers) are to be exempt from the network usage charge for 20 years from their commissioning. System-supporting operation reduces peak loads, e.g. from PV systems, and expensive network expansion can be avoided. Previously, batteries had to pay the network use charge twice – for withdrawal and for feeding-in (Section 119 (3) ElWG).
→ The second component of the network usage fees, the network loss charge (Section 121 ElWG), is to remain in place. It covers the system operator's costs for the transparent and non-discriminatory procurement of energy to compensate for physical network losses. As before, the network loss charge is to be borne by users withdrawing from the network and those feeding into it. Small system users with a connected load of up to 5 MW will continue to be exempt. The 20-year exemption for system-supporting energy storage facilities described above also applies (Section 119(3) ElWG).
→ The fee for other services remains in place. However, it is only payable if services are actually used.
Services provided by system operators in connection with energy communities will continue to be excluded from the fee for other services (Section 124 ElWG).
What is coming:
→ Charge for connection to the network: The previous network access and network provision charges for the construction of the network connection are to be combined into a new network connection charge (for the initial establishment of a network con-nection or for increasing the connection capacity). All system users must pay this fee. The draft clarifies that in the event of an increase in connection capacity, the charge shall only be payable proportional to the actual increase. Unlike in the past, both consumers and feeders shall be responsible for paying the fee.
Reduction: Appropriate reductions will be possible in the case of flexible network ac-cess or limited or restricted network access for feeders in the transmission system. The existing exemption for installations for converting renewable electricity into hydrogen or synthetic gases is no longer included in the current draft law (cf. Section 54(6) El-WOG).
→ Balancing services charge: The previous system service fee will be transferred to the new balancing services charge, which will only have to be paid by feeders. The new balancing services fee (Section 123 ElWG) is intended to compensate the system oper-ator not only for the procurement costs for secondary balancing power, but also for primary and tertiary balancing power.
→ The fee for metering services is to be abolished.
The draft clarifies that network use charges are to be paid separately for feed-in and withdrawal, thus ruling out net metering. All network usage is to be paid for.
The existing possibility of exempting certain innovative research and demonstration projects from network usage charges is to be retained in principle (Section 125 ElWG). However, the regulatory authority will be responsible for the detailed design.
The draft also clarifies that no network usage charges are incurred for the operation of self-supply systems (behind-the-meter), as the network is not used (Section 60(4) ElWG).
Network usage charges will continue to be collected by the distribution system operators (Sec-tion 107(6) ElWG).
Changes to the determination of network usage charges
The ElWG also introduces a different tariff method for determining network usage charges, with expanded powers for E-Control. In addition to its power to issue ordinances on the cost-based level of charges, as before, the power to determine the principles for this calculation is also being transferred from the electricity law to E-Control. In future, it will have to issue two separate ordinances – a basic ordinance and a network charge ordinance.
In the basic ordinance, E-Control will have to determine the method for calculating charges (Section 127(1) ElWG). The previous provision in the ElWOG was incompatible with the
independence of national regulatory authorities required under EU law (ECJ judgment of 2 September 2021, C-718/18, Commission v Germany). The reason is that only if the regulatory authority can act completely independent from economic operators and public institutions it is made sure that the decisions it takes are impartial and non-discriminatory. Otherwise, there would be a risk that a government favours certain companies and disadvantage others.
Although the ElWG continues to impose requirements on E-Control in this regard, these are only rudimentary. For example, E-Control is required to determine the tariff components and their basis of assessment as well as tariff periods. The basis of assessment may be capped or provide for a floor. Furthermore, E-Control is to determine the network level of plants and the billing modalities. It is just authorised to provide for temporary connections (flexible network access – see our separate article on this subject). E-Control should also be able to set flat rates, discounts or surcharges for dynamic tariffs.
In a second ordinance, E-Control must – as it does now – set the amount of the individual network usage charge on an annual basis (Section 127(2) ElWG). In doing so, it must determine the charges for all network areas and network levels to which the installations are connected. As before, the costs will be determined on the basis of the actual costs and quantities of the system operators. It remains to be seen to what extent E-Control will base its determination of network use charges on its current system usage fee ordinance. However, a reduction in fees cannot, of course, be achieved by a different calculation methodology. This is ensured by other measures such as peak shaving, flexible network access and system-supporting operation of batteries.
Concerning the procedure, before E-Control issues either of these two ordinances, it must ob-tain comments (Section 127(3) ElWG), as it has done in the past when determining the grid usage fees (Section 49 ElWOG 2010) and consult the so-called regulatory advisory board (Sec-tion 19 E-ControlG, Section 127(5) ElWG). When determining the fee levels, E-Control will also publish a detailed description of the methodology used and the underlying costs. This in-formation will be available to all interested parties upon request.
What happens next?
These changes will certainly lead to greater transparency and give E-Control the means to achieve an even higher degree of accuracy and cost fairness. Network users will find it easier to understand and verify whether they are being charged the correct fees. However, significant savings are not to be expected.
A clear overview of the network use charges under the ElWG is available for download below
