ElWG Insights: Direct transmission lines and peer-to-peer contracts
Decentralised energy supply within the framework of communal generation facilities, renewable energy communities, and citizen energy communities has already established itself in Austria. As of early 2025, there were over 6,500 such decentralised supply concepts. The recent draft of the Austrian Electricity Industry Act (ElWG) now opens up new possibilities for the establishment and operation of direct transmission lines and introduces the concept of peer-to-peer contracts into the legal system. Regardless of the final version of the law, the reaction of market participants can be eagerly awaited.
Decentralized supply is not a novelty in Austria: In fact, Austrians are frontrunners within the EU in terms of communal generation and consumption of electrical energy, mostly from renewable sources. As of early 2025, there were over 3,000 renewable energy communities (RECs; § 16c ElWOG 2010), over 500 citizen energy communities (CECs; § 16b ElWOG 2010) and over 3,000 communal generation facilities (CGFs; § 16a ElWOG 2010). Those who join an energy community benefit from numerous advantages, in particular (partial) independence from large electricity suppliers, as well as cost transparency and savings.
However, anyone who wants to procure their own electricity in a decentralized manner or transfer their self-generated surplus energy can, under the current legal regime, essentially only do so by joining a decentralized energy supply concept. Establishing a CGF, REC, or CEC undoubtedly makes sense in many situations (e.g., joint generation/consumption in a multi-party house or within a municipality/district), but it involves administrative effort in terms of its setup and ongoing operation. In particular, corporate law topics can be a deterrent for consumers/producers who simply want to purchase/sell electricity in a decentralized manner: For instance, the establishment and decision-making process for associations, cooperatives, and corporations as legal entities for EEGs and BEGs.
→ For insights on FlexCos as legal entities for RECs: CMS | Law-Now | Energy transition meets corporate law reform: Is the FlexCo ideal for energy communities? The provision on holding RECs from the first draft of the ElWG (§ 54 para 3 ElWG draft of 10 January 2024) referred to in the Article is no longer included in the current draft.
The ElWG draft now provides solutions for these cases, namely an amendment to the provisions on direct transmission lines and the introduction of peer-to-peer contracts – this article should shed some light on these concepts:
Direct transmission lines: Legally permissible – (yet) economically pointless?
Put simply, a direct transmission line is a power line separated from the distribution grid that connects an electricity producer to a consumer. Direct transmission lines are also provided for in the (still) applicable Austrian Electricity Industry and Organisation Act (ElWOG 2010). A direct transmission line can be interesting for industrial operations, for example, if they want to cover (part of) their electricity needs with renewable energy from a spatially separate generation plant (e.g., an agrivoltaics plant). In practice, however, this method of direct supply is hardly used. The reason for this is the strict case law of the highest Austrian administrative court (VwGH 04 March 2008, 2007/05/0243): If there is a direct exchange of electricity between the direct transmission line and the public grid, such power line cannot be classified as a direct transmission line. This means that neither the consumer may feed any surplus from the direct transmission line into the public grid, nor may the producer allow electricity obtained from the public grid to flow to the consumer through such line. If an electricity supply line cannot be classified as a direct transmission line, this constitutes an unlawful interference with the grid operating monopoly of the distribution grid operator in whose licensed area the electricity supply line is located. The result: The legal possibility of establishing direct transmission lines exists – however, it is difficult to implement such a system in an economically viable manner (e.g., due to the consumer's inability to feed surplus electricity from the direct transmission line into the public grid). Under the current legal regime, an "insular operation", i.e., sole supply via a direct transmission line without a grid connection, is not a practically relevant model due to the volatility of renewable energy sources such as wind and solar power.
The ElWG intends to remedy this situation: Provided that ring flows are prevented, connection to the public grid is not detrimental to the qualification as a direct transmission line. It must be ensured that all charges and levies in connection with the electricity taken from and fed into the grid are paid. Thus, if the legislator agrees to the provisions in their current form, at least in theory the economically viable use will be possible. If the consumer uses less electricity than they obtain via the direct transmission line, they can feed the surplus into the public grid. In order to avoid being liable to the grid operator, among others, for the power generation facility the metering point for the feed-in can also be assigned to the operator of the generation facility.
The new regime promises leeway for practical applications. It will therefore be interesting to see whether the provisions on direct transmission lines are adopted in their current form and how market participants intend to use this concept.
Peer-to-peer contracts: Electricity trading between individuals
The economically viable construction and operation of direct transmission lines is promoted under the new ElWG regime, as described above. However, direct transmission lines involve investments that will generally not be affordable for "small" electricity producers; one may think of the typical case of a single-family home with a rooftop PV system. If there is no communal initiative in the sense of a CGF, REC, or CEC nearby, or if participation is not desired, there shall now be a solution: Peer-to-peer contracts. The basic idea is simple: A contract is concluded between an authorized person regarding a generation plant and a consumer for the provision of electricity from renewable sources.
The ElWOG 2010 does not provide for peer-to-peer contracts – according to the current legal regime, end customers who want to supply themselves decentrally or dispose of their surplus self-generated renewable energy regionally can only participate in a CGF, REC, and/or CEC (For insights on multiple participation: Law-Now | Multiple participation in Energy Communities from 2024 | CMS). The ElWG draft is reserved with regard to the regulation of peer-to-peer contracts. It states that the contract must contain conditions for the automatic processing and billing of the transaction. Processing/billing can be carried out – and will probably be carried out in most cases in practice – by a third party (in particular an aggregator). The purchase price is determined by the parties, whereby a purchase price of EUR 0 can also be provided for. The transfer between two metering points assigned to a single person is also permitted.
As with direct transmission lines, we must wait for the final law. From our perspective, it will be particularly interesting to see which products will be offered by established market participants and energy start-ups for the processing of peer-to-peer contracts.
The CMS Energy Team is of course available and happy to provide advice on direct transmission lines as well as on peer-to-peer contracts and concepts!
