Austria's parliament passes Renewables Expansion Law

The Austrian parliament last week approved the Renewables Expansion Law (EAG) that is expected to give momentum to the deployment of new capacity for green electricity production in the Alpine country.

The law is considered an important step for the acceleration of wind power expansion which has been very sluggish over the last few years. Under the new law, 390 MW of wind capacity will be auctioned annually except for 2022 when 200 MW will be awarded administratively and the remaining 190 MW will be tendered.

The addition of new turbines in the Alpine country was on the decline for several years before it hit a low in 2020 when more turbines were switched off than commissioned. The expansion of wind power started to recover in 2021 when 69 turbines with a combined capacity of 298 MW went online and investments rose to EUR 435 million. This year, new wind capacity is expected to reach a record-high 427 MW, according to Austria's wind energy association IG Windkraft.

The new law introduces also a tender for wind and hydropower projects of at least 20 MW per year.

The projects that will be subsidised under the scheme will receive a flexible market premium for a period of 20 years.

In addition, the renewables fee paid by citizens with their electricity bills will be ended in 2022, cutting costs for households and businesses by EUR 350 million (USD 395.64m).

The law is part of Austria's efforts to increase the share of renewables to 100% in 2030 from 75% currently. The country's scheme to support green electricity production was approved by the European Commission in December and payments under the scheme are estimated to total about EUR 4.4 billion until the end of 2032.

To reach its 2030 goal, Austria needs an additional 27 TWh of electricity generation. Under the EAG, about 11 TWh should come from solar supported mainly by the initiative for one million photovoltaic rooftop installations across the country. Wind power and hydropower should add 10 TWh and 5 TWh, respectively, with biomass accounting for about 1 TWh.

(EUR 1 = USD 1.130)

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