Austrian draft law seen to be 'useless'

AUSTRIA: Austria's draft 2012 eco-electricity law, due to be presented to parliament at the end of this month, is a "useless instrument", according to an open letter sent to the country's economic ministry last month by about 200 companies and federations - including Austria's wind energy association IG Windkraft.

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"The draft will have a massive braking effect rather than accelerating the switch to ecological electricity generation," says Stefan Moidl, the wind association's managing director.

The association expects around 120MW of new wind capacity to be installed in Austria this year, raising the total to 1.13GW. More than 200MW could be added in 2012 but, if the draft legislation is implemented, the outlook becomes very uncertain, according to the association.

While about 800MW of projects have received permits and are ready to proceed, 550MW of these are still awaiting a contract from the eco-electricity administration office (Okostromabwicklungsstelle), which provides additional support funds.

Changing rules in midstream

The projects were developed under current eco-electricity law rules and expect a feed-in tariff (FIT) of EUR0.097/kWh. But the new draft law institutes a payment cut of EUR0.004/kWh as a condition for providing financial support. Projects that cannot or will not accept the cut may drop out and will have to apply afresh.

"This is an unacceptable undermining of the principle that legal frameworks have to be reliable," says IG Windkraft.

Among other problems, planned changes to the provision of support funds will effectively allow only 129MW of new wind energy projects to be supported each year, says IG Windkraft. But even this number may not be achieved.

Each year's support quota will be granted in six-month tranches. If an overbooking for funds takes place, the FIT will be decreased, by 5% for overbookings of up to 50% and by 10% for more than 50% overbooking.

As wind developers require several years to get to the point of receiving permits for their wind farm and are not informed of the progress of competitors' projects, they will be unable to assess the likely level of payment and therefore whether a project is economically feasible.

On top of that, the 13-year FIT for new projects installed each year is to drop automatically by 10% per year.

The draft law arrangements raise questions over whether Austria will achieve the wind target set out in its National Renewable Energy Action Plan of a 1.57GW increase in wind capacity between 2011 and 2020. Under the draft 2012 law, even at an optimistic 129MW a year from 2012 on top of the planned 120MW in 2011, only an additional 1.28GW can be expected to be installed by 2020.

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