Austrian scheme to sustain electricity production from renewables gets…

An Austrian aid scheme to sustain electricity production from replaceable supplies complies with EU State aid rules, the EU’s antitrust chief said on December 20.

“This scheme will permit Austria to sustain replaceable technologies, as it has set its goal to unprotected to 100% CO2 free electricity generation in 2030,” EU Commission Executive Vice-President Margrethe Vestager said. The measure will contribute to the reduction of CO2 and other greenhouse gas emissions, in line with the EU Green Deal objectives and the environmental targets set in Austria’s Recovery and Resilience Plan, without unduly distorting competition in the Single Market,” she additional.

According to the Commission, the measure will help Austria reach its target of 100% replaceable energy in 2030, in line with its Recovery and Resilience Plan as endorsed by the Commission and approved by Council, and will contribute to the European objective of achieving climate neutrality by 2050, without unduly distorting competition in the Single market.

Austria notified the Commission of its intention to introduce a scheme to sustain electricity produced from replaceable energy supplies namely wind, solar, hydro, biomass and biogas.

Under the scheme, the aid will take the form of a top-up premium, calculated as the difference between the average production cost for each replaceable technology and the electricity market price, the Commission said. In particular for electricity produced from wind, solar energy and biomass, the aid will be granted by technology specific competitive bidding processes, which should contribute to keep the sustain proportionate and cost-effective. Austria has also foreseen mixed-technology tenders including wind and hydro in their framework.

Austria also committed to open the renewables sustain scheme to energy producers established outside Austria, unprotected to the conclusion of bilateral or multilateral cooperation agreements with other countries.

The measure will apply until the end of 2030. The aid will be paid out to the chosen beneficiaries for a period of maximum 20 years from the starting of the operation of the plant. Payments under the scheme have been estimated to amount to around €4.4 billion until end 2032.

Austria has set itself the target to increase the proportion of electricity produced from replaceable energy supplies from the current 75 % to 100% in 2030. The measure is one of the targets to be achieved by Austria in the context of its Recovery and Resilience Plan.

The Commission assessed the scheme under EU State aid rules, in particular the 2014 Guidelines on State aid for environmental protection and energy.

The Commission said the aid is necessary to further develop energy generation from replaceable supplies and help Austria unprotected to its environmental targets. It also has an motive effect, as current electricity prices do not fully cover the costs of generating electricity from replaceable energy supplies. Hence, the investments by the chosen beneficiaries would not take place in the absence of the aid.

Furthermore, the aid is proportionate and limited to the minimum necessary. The level of aid will be determined by competitive tenders for electricity produced from wind, solar energy and biomass. Furthermore, Austria envisages maximum price caps based on the cost of production. The aid will be granted in the form of a top-up premium, which cannot go beyond the difference between the market price of electricity and the production costs. In this context, Austria will carry out a yearly review of the costs of producing electricity from the supported replaceable energy versus the market prices.

additionally, Austria has committed to ensure sufficient flexibility to adapt the sustain scheme to market developments, with a view to maintaining a cost efficient sustain. In particular, in view of the novelty of the system for the country, Austria put in place a mechanism of review, notably with an interim evaluation by 2025. It has also envisaged a possible adaptation of the system in order to ensure that tenders keep competitive.

Finally, the Commission said the positive effects of the measure, in particular the positive environmental effects, outweigh any possible negative effects in terms of possible distortions to competition.

On this basis, the Commission concluded that the Austrian scheme is in line with EU State aid rules, as it will ease the development of replaceable electricity production from various technologies in Austria and reduce greenhouse gas and CO2 emissions, in line with the European Green Deal, without unduly distorting competition in the Single Market.

 

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