Network charges reform: Draft regulation on system usage charges published – comments due by 24 July

Austria’s energy regulator E-Control published the long-awaited draft System Usage Charges Framework Regulation (SNE-G-V) on 29 June (Current consultation drafts – E-Control – available in German only). The regulation is intended to enter into force on 1 January 2027, and stakeholders may submit comments until 24 July.

The SNE-G-V establishes the methodology and principles under the new network tariff design introduced by the Electricity Industry Act (Elektrizitätswirtschaftsgesetz - ElWG), forming the basis for the annual determination of network tariffs. The regulation is therefore relevant for all network users. For energy storage operators, the exemptions available to “system-supportive storage facilities” are of particular importance. Below is a summary of the most critical points – primarily those affecting storage – which also raise a number of open questions:

1. New structure of network charges

The three principal recurring system usage charges – (a) the Network Usage Charge (NNE), consisting of a capacity component and an energy component, (b) the Network Loss Charge (NVE) and (c) the Balancing Reserve Charge (RLE) – will be calculated on the basis of the highest monthly quarter-hour value recorded at the main metering point. Additional components include a gross charge for network levels 1 and 2 and a charge for attributable reactive power per unit of electricity withdrawn where additional (i.e. cost-causing) measures are required at the network connection point. Medium- and long-duration storage facilities (defined by reference to discharge duration) will be subject to dedicated charge categories that apply uniformly across all network levels, although pumped-storage facilities are expected to be the primary beneficiaries.

As time-variable incentives, a new Winter Off-Peak Energy Charge (WiNAP) will be introduced, while the existing SNAP mechanism will continue. Under flexible grid access arrangements, the capacity component is reduced through percentage discounts – however, only for electricity withdrawal and only in respect of the capacity element. In other words, the interruptible portion of the connection capacity is exempt, but where that capacity is used, the energy component remains payable. In addition, the contractual commitment period must extend for at least ten years (beyond the minimum terms set out in the ElWG).

2. Reduced network charges for local energy sharing

A further incentive is the reduction of the NNE for participants in local energy sharing schemes. With respect to the capacity component, capacity netting applies where energy is shared via shared connection facilities. For the energy component, percentage reductions will depend on the infrastructure used and, according to the explanatory notes, may amount to up to 90% or even 100% where sharing occurs within the same main connection line or site area. On a positive note, the regulation no longer distinguishes between different legal structures (such as renewable energy communities or citizen energy communities) but instead focuses solely on the extent to which the public network is used. Other forms of local energy sharing will at least benefit from reductions to the energy component.

3. Exemptions limited to “re-injection”: co-located storage pays full charges

Section 23 SNE-G-V provides that energy storage facilities are exempt from the NNE and NVE on the withdrawal side only where they are operated “exclusively for re-injection into the grid”. This means that only stand-alone storage facilities that charge exclusively from the grid qualify. This requirement applies in addition to the cumulative conditions for a system usage charge exemption in the case of system-supportive operation (see below). Green hydrogen reconverted to electricity at the same site should also be able to benefit from the exemption. By contrast, co-located storage facilities and pumped-storage plants do not qualify.

Whether this restriction is covered by the regulation-making authority under Section 135(1) ElWG is questionable. That provision merely authorises the determination of the “basic rules for calculating system usage charges” but does not extend to the scope of the exemption for system-supportive storage, which is already enshrined in Section 127(3) ElWG. Under the SNE-G-V, eligibility for the exemption appears to depend not (only) on system-supportive benefits as required by the ElWG (cost reductions, network security and security of supply), but also on the premise that combined facilities already enjoy “inherent pricing advantages for the network user”, which should in principle preclude an exemption. Further debate on this point is to be expected.

Re-injection facilities are, however, exempt from the NVE on the injection side, which is a welcome development compared with the previous market consultation and helps avoid double charging.

4. System-supportive exemption clearer, yet still highly restrictive

The new set of criteria under the SNE-G-V is leaner and clearer than the version included in the market consultation. Nevertheless, further discussion can still be expected. In the distribution network, a re-injection facility is exempt from the NNE, NVE and REE if:

1. no grid expansion is required for the grid connection, meaning that sufficient capacity is available.
2. available connection capacity is calculated in accordance with E-Control’s methodology.
3. the facility has a connection capacity of more than 1 MW.
4. an agreement with APG for congestion management in the form of flexibility services via the flexibility platform has been concluded.
5. the network operator is entitled to restrict the operating range of the storage facility for at least five years, free of charge and in each case until 06:00 on the previous day.
6. the facility is connected to a grid node at network level 4 (directly?) where the transformer is utilised at more than 80% capacity during at least 20% of the hours in a year.

In the transmission network, re-injection facilities are exempt from the NNE, NVE and REE if:

1. the facility is connected to the transmission network;
2. the grid connection point is designated in the NEP for system-supportive operation;
3. an agreement with APG for congestion management in the form of flexibility services on the flexibility platform is in place (as described above);
4. the transmission system operator (TSO) is entitled to restrict the operating range of the storage facility as described above, albeit against remuneration;
5. the facility makes reactive power available to the TSO free of charge; and
6. the facility complies with any restrictions on grid connection imposed by the TSO (meaning that the TSO has greater discretion than a distribution system operator in this regard).

A reduced NNE is available to all providers of balancing reserves (irrespective of the conditions set out above) in proportion to the balancing reserve capacity and balancing reserve energy actually provided.

The cumulative nature of these conditions and their applicability in addition to system-supportive operation is legally controversial. One counterargument is that the ElWG defines system-supportive operation in detail as a mode of operation through which “system-supportive benefits in the form of cost reductions, cost avoidance or the maintenance of network security and security of supply are provided”. Other cost advantages for network users are not relevant in this context. Furthermore, the ElWG identifies three operating models that are each, in any event, deemed to be system-supportive. Both the wording of the legislation and the explanatory notes to the ElWG suggest that these criteria are intended to apply alternatively rather than cumulatively. Against the background of the Austrian Constitutional Court's case law on the restriction of statutorily defined concepts through subordinate legislation, the current version of the SNE-G-V is also likely to give rise to further debate.

The exemptions will expire on 31 December 2030 and will continue to apply only to storage facilities that have already been commissioned by that date. It remains unclear which regime will apply to storage facilities commissioned thereafter.

5. Overall cap on exempt storage capacity

The draft introduces an Austria-wide cap of 5 GW of congestion capacity for exempt storage facilities. All storage connection agreements must be registered centrally on a common online platform together with their congestion capacity. Once registered capacity exceeds 5 GW, priority will be granted to facilities connected at the most heavily utilised grid connection points. A particular concern is that transmission-connected facilities appear not to participate in the ranking process. Furthermore, all grid connection agreements for system-supportive storage facilities are subject to a condition precedent: if the 5 GW threshold is not reached, the agreements are to be dissolved entirely. This creates considerable investment risk for operators and uncertainty for network operators alike. On the positive side, the tendering procedures that had been included in earlier consultation drafts have been removed.

6. How will aggregators and virtual storage projects benefit from the exemption?

The draft recognises the aggregation of storage facilities by aggregators (virtual or swarm storage projects), provided that each individual facility has a capacity of at least 50 kW and the

aggregated portfolio reaches at least 1 MW. However, Section 24(3) contains several apparently incorrect cross-references and the limitation to a single network node may create significant geographical restrictions. In addition, the exemption appears to lapse if even one participating facility leaves the aggregation, regardless of whether the remaining portfolio continues to satisfy all eligibility requirements. It also remains unclear how billing is intended to operate through an aggregator that has neither a metering point nor a network connection agreement.

7. Comparison with more advanced EU markets

In Spain, battery storage systems have been generally exempt from system usage charges since March 2026, at least until flexible grid access arrangements are introduced.

In Romania, three categories of charges applicable to electricity withdrawn from the grid for storage purposes have been abolished: (i) the transmission tariff (for withdrawal), (ii) distribution tariffs and service charges for stored and re-injected energy, and (iii) payments for, or the cancellation of, green guarantees of origin for energy permanently consumed during the storage process (similar to the cancellation applied to account for efficiency losses).

Compared with Germany, the Austrian approach also appears restrictive. The German exemption for electricity withdrawn by battery storage systems is not linked to system-supportive operation but instead pursues a technology-neutral investment support model directly embedded in legislation. However, it is currently limited to projects commissioned by the end of 2029.

In the Netherlands, there is no general exemption for storage facilities. However, reduced network charges are available through so-called alternative transport rights, which function in a manner similar to flexible grid access. The most relevant of these incentives is the “time-limited transport right”, which includes a system-supportive element. Under this arrangement, transmission network users contractually waive guaranteed capacity in one or both directions during periods requiring congestion management, in return for a lower network charge.

Similar reductions also exist at the distribution level and for time-variable capacity products. In all cases, the decisive factor is the reduction of congestion and the lowering of overall network costs. In summary, other EU Member States provide substantial exemptions from network charges for energy storage facilities. Different to Austria “Inherent pricing advantages for the network user” play no role in those frameworks.