Minimum target becomes upper limit -- Austria's new law

Austria's revised energy market law, Elwog, is proving to be a major barrier to wind power despite the introduction of a fixed premium tariff for renewable energy coupled with a purchase obligation on utilities, says Interessengemeinschaft Windkraft Österreich (IGW), the Austrian wind association. It claims that Elwog's target of a minimum of 4% renewables in the supply mix by 2007 has become an effective cap on utility purchases of green power.

The revised law came into force on October 1 and was put into practice in each of the nine Länder (states) in separate regulations. Salzburg, Tyrol and Carinthia have imposed a 4% ceiling on renewables, says IGW's Stefan Hantsch, while Vienna, Kärnten, Vorarlberg and Steiermark allow unlimited purchase of renewables by utility network operators. "But many have bent the intention of the law by interpreting the minimum target as a 4% cap," says Hantsch.

Of the two remaining Länder, Lower Austria was persuaded to ditch its 2% limit on wind and biomass combined only after protests by IGW members. Biomass is now free of any cap. Wind is allowed to grow to 3%. Burgenland has so far stuck to its caps of 2% for wind and 2% for biomass. "This means that in Burgenland just 12 MW of new wind capacity can go on-line by 2007. In the larger and windier land of Lower Austria, the interpretation of the law allows for only another 100 MW, although projects for 500 MW have been proposed," says Hantsch. "In Lower Austria, the cap is blocking investments of AUS 7 billion and the creation of 2200 jobs."

Upper Austria looks like the only good guy with a 20% ceiling for renewables, but only projects successful in a tendering procedure are eligible for premium payments. "This will effectively put a brake on renewables development," according to Hantsch.

The Länder are creating further uncertainty by insisting on retaining individual tariffs for renewables, instead of adopting a federal system similar to Germany's Renewable Energy Law, says IGW. As things stand only 20 MW of wind will be added this year, bringing Austria's total to 98 MW, it predicts.

Some Länder are backing the IGW view, with the eastern states of Burgenland, Vienna and Lower Austria officially asking for a federal tariff. They argue that without a mechanism to spread the costs of the premium payments across all electricity customers, utilities and their customers in windy areas will end up paying for the clean energy which benefits all. "For the Länder to voluntarily offer to give up some of their power is quite revolutionary," Hantsch comments.

Against this background, wind power development companies seem to be "pressing on regardless," praises Hantsch. "They have lodged enquiries with major utility EVN this year about connecting 370 MW to its grid, while another utility is said to have received inquiries for 500 MW," he says.