Cleaner, Digital, Affordable: Government Defends Electricity Market Act Proposal

"After seven months of very intensive work, including six weeks of review with almost 600 submissions, we have a law on the table that will shape the energy future of this country," said Energy State Secretary Elisabeth Zehetner (ÖVP) at a press conference.

The "Cheap Electricity Act" or "Affordable Electricity Act," as the government now calls it, aims to make the energy system "cleaner, more digital, more efficient, and above all, more affordable," said Zehetner. Compared to the first proposal, the government has introduced a de minimis threshold for feed-in tariffs for electricity producers, exempting small plants with less than 7 kilowatts (kW) of capacity. Large plants pay for the capacity that exceeds 7 kW. "It is clearly stated in the law that the profitability of any plant cannot be jeopardized," said the Energy State Secretary.

Electricity Market Act Proposal: Level of Feed-in Tariffs Likely to Align with EU Directive

The level of the feed-in tariffs is set by the regulatory authority, but an EU directive, which caps network usage fees at 0.05 cents/kWh, could provide guidance, explained NEOS energy spokesperson Karin Doppelbauer.

"We will handle the tariffs very carefully and cautiously and calculate them very precisely with regard to their impact on the overall energy price," reassured E-Control board member Alfons Haber on Wednesday to the APA. The feed-in tariff will be due for electricity quantities exceeding 7 kW - this can be measured with the help of smart meters.

Even if the law comes into force at the beginning of the coming year, the tariffs will only become effective on January 1, 2027, explained Haber. "We need at least until mid-2026 for the corresponding regulation and consultations."

For the construction of new facilities, such as wind farms, high costs would be incurred, "we have to build a substation, we have to lay large cables there, and we all pay for that," said Minister of Economic Affairs Wolfgang Hattmannsdorfer (ÖVP) with regard to network fees. And: "Those who are complaining now are the ones making the profits," he said, addressing the renewable energy associations. "We are talking about a network here. Every hauler driving on a road also pays truck tolls," said State Secretary Michaela Schmidt (SPÖ). The participation in network costs applies to all forms of generation, and no one will be disadvantaged.

The peak capping should be designed to be "fair and predictable," said Zehetner. Thus, the network operator will have to announce a planned peak capping by 9 a.m. the day before. Hybrid plants that combine photovoltaics, wind, and storage are "explicitly exempt from peak capping because they contribute to network stabilization," according to the Energy State Secretary.

Work Price to be Capped at 10 Cents/kWh in Crisis

Additionally, the government is issuing a "price-down guarantee." This should stipulate that lower purchase prices must be passed on to households within six months, provided they have a variable tariff. Furthermore, there should be a "crisis mechanism" that caps the work price at 10 cents net in the event of a crisis, explained Schmidt. The exact design is not yet determined but is to be presented in December. In any case, the price law should also include electricity and gas in the future; currently, there is an exception for this. However, the work price only accounts for about one-third of the final price on the electricity bill, with two-thirds going to taxes and network fees. The planned social tariff for low-income households is also expected to be implemented.

Additionally, the increase in network costs is to be cushioned with 450 million euros from the dissolution of two reserve accounts. "These are two accounts, a special account and a regulation account," within the scope of the regulatory authority E-Control and the transmission system operator APG, said Hattmannsdorfer. The dissolution of such reserves also curbed the increase in network costs from 2025 to 2026 to an average of 1.1 percent, whereas from 2024 to 2025, they had increased by 23 percent, said the Minister of Economic Affairs.

The law is planned to be passed by the government in December, but a two-thirds majority in parliament is necessary. Therefore, it needs the votes of the Greens or the FPÖ.

(APA/Red)

This article has been automatically translated, read the original article here.