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Austria

Austria

Costly network-use law overturned

AUSTRIA: Grid levies that have hit Austrian wind farms hard since their introduction in 2009 could be scrapped following a key court ruling.

In mid-September, the underlying legal framework that supports these network-use charges was declared unconstitutional by Austria's constitutional court. Delighted wind-farm operators are preparing to demand their money back.

In most European countries, network-use charges are shouldered by consumers rather than power generators. But in a regulation that took effect in 2009, Austria's generators were loaded with a new network-losses levy, which aimed to spread the cost of paying for electricity lost in the transmission process.

This was added to the existing system service charge generators already had to pay. Consumers continued to pay for 75% of network losses, but generators now had to cough up the other 25%.

This is estimated at EUR2 million yearly for wind-farm owners, according to Austrian wind association, IG Windkraft.

Foreign advantage

The new charge represented a significant disadvantage for domestic electricity generators compared with foreign suppliers whose deliveries into Austria did not incur network charges.

But wind-farm operators were especially hit because under Austrian law they get a guaranteed fixed price for the electricity they generate and cannot pass on the additional charge to consumers as conventional generators can do.

The network-loss charge, applied to generators with a capacity of more than 5MW, was fixed at between EUR0.0007/kWh and EUR0.0026/kWh, depending on the voltage of the network concerned. After deducting this charge, wind operators' profits slumped by up to 50%, claimed IG Windkraft.

Over 100 complainants including many wind-farm operators decided to go to court.

In September, the constitutional court informed them that the rules set out in the legislation - known as Elwog - which provided the basis for setting network-loss charges to generators in 2009, were "insufficiently defined". With the law too vague, the 2009 regulation is expected to be annulled by a second judgement from the court before the end of 2011. This will open the door for generators to demand back their payments.

The September judgement only applies to the old Elwog. It remains to be seen whether the Austrian government will alter the new Elwog 2010 - in force since March 2011 - or whether court appeals must be lodged afresh, said IG Windkraft.

Austria currently has 640 wind turbines with a total 1.04GW in operation, which generate around 2TWh/year. This is equivalent to the annual electricity needs of 17% (600,000) of Austrian households. Without the hindrance of the network-losses charge, the wind association claims wind investments could be speeded over the coming years.

A special concession has been introduced under the eco-electricity law 2012 (passed in July 2011) that provides an additional EUR80 million in tariff top-up support. It is predicted to result in 472MW going ahead. The concession also allows for another 150MW of applications. This 622MW adds to the 133MW of projects in 2010 and 100MW in 2011 that have been allocated support.

In view of the 855MW potential - up to 130MW of this possibly commissioned this year and around 350MW next year - Austria could meet its 2020 wind-energy target of 2GW early, said IG Windkraft.

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