Eco-electricity law amendment threatens any new capacity

Wind power development in Austria, which in the last two years has seen nearly 450 MW in new capacity installed, will come to a virtual standstill if a draft amendment to the country's eco-electricity law is passed, says the Austrian wind energy organisation Interessengemeinschaft Windkraft Österreich (IG Windkraft). Scheduled to come into force at the start of 2005, the amendment imposes a limit of EUR 17 million a year in renewables price support, enough for just 63 MW annually, it says. Of this, wind power would account for around half. While in 2003 a total of 276 MW in new wind plant was built with a further 170 MW expected by the end of this year, bringing cumulative capacity to 585 MW, the new law would mean annual wind capacity additions of just 35 MW. Moreover, the current system of a fixed premium payment per kilowatt hour -- which acted as the catalyst for Austria's recent surge in development -- will no longer apply to wind. Instead, wind developers will have to bid for projects while being subject to a price cap, set at EUR 0.069/kWh for the first ten years and falling by 25% in the eleventh year to EUR 0.052/kWh and again in the twelfth year to EUR 0.035/kWh. These prices will apply only to scheduled generation, with payments beyond that falling to the market price for electricity. Furthermore, winning bidders will have no guarantee of a power purchase contract. "Participants will be forced to set generation volumes unrealistically high, taking up more of the limited volume of support than is necessary," says IG Windkraft. These are conditions "no-one can seriously consider participating in."