Renewable energy law and regulation in Austria

1. Brief overview of the renewables sector

Energy sourced from renewables is becoming increasingly important in Austria. According to the Energy Report, 2019 prepared by the Ministry of Agriculture, Regions and Tourism, roughly 82% of the energy generated in Austria was derived from renewable sources in 2018. Biomass accounts for 55% of all renewable energy and hydropower for 33%. However, the importance of wind and solar generation (6.6%) is also steadily increasing. The country’s topography supports the trend towards the generation and consumption of renewable energy, as does the legislative framework, which is mostly based on EU legislation. 

The driving force for the support of renewable energy within the legislative framework is currently the Green Electricity Act 2012 (Ökostromgesetz 2012), which is being continually amended to further increase the share of renewable energy. In May 2018, the Austrian Federal Government adopted a climate and energy plan for Austria: #mission2030. The #mission2030 plan imposed national targets for the renewable energy sector, such as increasing the overall share of renewables to 45-50% by 2030.

However, after early elections in 2019, the newly established Federal Government, with participation of the Green Party for the first time, released an even more ambitious government agenda stating that Austria should be climate-neutral by 2040. The programme also focuses on issues such as the greening of the tax system, the decarbonization of the heating and transport sectors and the goal of 100% renewable electricity by 2030.

2. Recent developments in the renewables sector

Small Green Electricity Act Amendment (kleine Ökostromnovelle)

In 2016, the legislator passed  the Small Electricity Act Amendment (kleine Ökostromnovelle) which introduced technical and administrative amendments to the existing green electricity support scheme in Austria. It only sought to make such amendments which were covered by the already-approved subsidy scheme, and thus would not need to comply with the new EU state aid regime. The main amendments were:

One-Stop-Shop approval procedure 

As of 1 January 2018, the Green Electricity Clearing and Settlement Agency (Ökostromabwicklungsstelle, OeMAG) would decide on applications for the approval of solar, wind and small hydropower plants and conclude contracts on subsidies for these plants. Only commodity-dependent plants (biomass and biogas) would still need to obtain approval from the competent provincial governor before applying for a contract with OeMAG.

Furthermore, the European Renewable Energy Directive (RED II) (see below) would require an extended "One Stop Shop" system, which would not only be responsible for approving and subsidising projects in the field of renewable energy, but also many space planning issues. The intention is that OeMAG will also have the corresponding instruments at its disposal to be able to fulfil this role. 

Extension of the expiry period for applications for the approval of wind, hydropower and commodity-dependent plants 

The expiry period for applications for approval was extended from three to five years as of the date of lodging the application for approval of wind, hydropower and commodity-dependent plants. Wind power plants only need to be put into operation within 48 months (instead of 36 months).

Solar power applicants must demonstrate to OeMAG that they have ordered the respective (entire) solar power plant within three months of lodging the application. Once the solar power plant has been approved, it needs to be operational within nine months (instead of 12 months). 

Amendments regarding investment subsidies 

Investment subsidies must comply with the General Block Exemption Regulation (EU) No. 651/2014. As of 2017, subsidies for small hydropower plants have been increased from EUR 16m to EUR 20m per year. By contrast, the investment subsidies for solar power plants were limited to EUR 15m for the years 2018 and 2019.

New renewable plants registry 

The amendment of the Green Electricity Act also establishes a renewable plants registry. This is kept by OeMAG and includes all approved plants.

Green Electricity Act Amendment 2019

In October 2019, the Green Electricity Act 2012 was amended again. The main goal was the reduction of waiting lists for subsidies. For this purpose, the additional annual support volume from 2021 was brought forward to 2020 and for solid biomass plants an additional EUR 8.7million was made available. Another EUR 30m were made available for medium-sized hydropower investment and at the same time the amount of subsidies was increased from 10% to 15% or from a maximum of EUR 400/kW to EUR 650/kW and a maximum total of EUR 6m per plant to EUR 10m. For the years 2020 to 2022, additional funding of EUR 36m was provided for both photovoltaics and storage.

Impact of COVID-19

The final impact of the COVID-19 pandemic remains to be seen, but recent economic policies suggest that the Federal Government’s plan to support the struggling economy is very much in line with the interests of the renewables sector. 

Financial measures: 

The stimulus package announced in June 2020 will encompass the following financial measures (until 2022): 

  • EUR 750m for a renovation plan, thermal renovation, and support for "getting out of oil" technologies, climate-friendly local and district heating as well as for modern heating systems;
  • EUR 250m for the expansion of renewable energy;
  • EUR 300m for innovations in climate protection and future technologies;
  • EUR 100m for tax reductions on repairs; and
  • EUR 200m for climate protection in urban areas.

Investment subsidy for green technologies

The investment subsidy for green technologies provides for a tax credit of 14% of investments in certain "future technologies". In addition to digitalization and investments in health care, eco-investments will receive special support for six months from September 2020. The intention is to make climate-friendly investments such as investment in renewable energies, energy efficiency the reduction of air pollutants more attractive for business. 

3. Forthcoming developments / opportunities in the renewables sector

Renewable Expansion Act (Erneuerbaren-Ausbaugesetz)

With the intention of implementing the measures outlined in #mission2030 and in the Austrian climate and energy plan, the former Federal Government presented an outline of the Austrian Renewable Expansion Act (Erneuerbaren Ausbau Gesetz, EAG), which aimed to positively shape the Austrian clean energy system. The new draft under the current Federal Government is expected to be submitted for review in July 2020. The Renewable Expansion Act will then come into force at the beginning of 2021.

According to the government agenda, the key aspects of the Renewable Expansion Act will include:

  • Measures to secure climate-neutrality by 2040.
  • 100% renewable electricity by 2030.
  • Installation of photovoltaic systems on 1 million roofs (Austria has approx. 2.19 million buildings).
  • Exploring the possibility of creating "Renewable Energy Communities" and "Citizens' Energy Communities" for increased decentralisation of energy supplies.  

In addition to the adoption of the Renewable Expansion Act, it is also intended to (i) further develop the current Energy Efficiency Act, (ii) continue to lobby against nuclear energy at EU-level, (iii) foster a technology strategy, further digititalisation and innovation measures (development of integrated energy systems, E-mobility, Smart Grids and especially hydrogen technology) and (iv) help the Austrian economy to transfer to a more climate-friendly approach with a "Green Deal". 

Picture of Johannes Trenkwalder
Johannes Trenkwalder
Partner
Vienna
Marco-Selenic-CMS-AT
Marco Selenic
Associate
Vienna