Energy Crisis Contribution Act - extension of revenue absorption planned until the end of 2024

An extension of the levy for renewable electricity producers has been announced for 2024.

"It is positive that the eligibility of investments is to be extended. Nevertheless, the fact remains that in no neighboring country are the revenues of electricity producers skimmed off, while Austria now wants to extend this for another year," comments Stefan Moidl, Managing Director of IG Windkraft, and Fritz Herzog, Chairman of IG Windkraft, adds: "Continued direct intervention in markets does not increase confidence in the wind energy growth market, which will be so important in the future. Only the expansion of renewables will stabilize the electricity price in the medium term."

Today, the government announced a new revenue levy for renewable electricity producers. The federal law on the energy crisis contribution for electricity is to be extended and remain in force until the end of 2024.

"It is positive that the scope for eligible investments is to be increased," notes Moidl, but points out: "While the legal basis for this law at European level already expired in mid-2023 and hardly any other European country is now skimming off the proceeds of electricity producers, Austria will now see an extension until the end of 2024. Unfortunately, this means that we are moving away from harmonized electricity markets in Europe and making the production conditions for electricity in Austria more difficult compared to our neighboring countries."

 

Levy does not reduce the end customer electricity price at all

The levy is applied to producers of renewable energy. For the most part, they do not supply their electricity to end customers, but sell it on the electricity exchange to electricity traders or electricity suppliers. Any intervention in the revenues of electricity producers therefore has no effect on the end customer price.

"Cutting the turnover of renewable producers in order to get electricity traders to reduce sales prices is like continuing to cap the milk price for the few dairy farmers when there is not enough milk on the market, in the hope that this will make milk cheaper in the supermarket," says Herzog.

 

Skimming increases risk in the implementation of renewables

Over the next few years, the industry will need very high levels of investment for the energy transition. If these are withdrawn from the companies, there will be a lack of equity capital to implement the many upcoming renewable energy projects.

"Continued direct intervention in markets will certainly not increase confidence in wind energy, which will be such an important growth market in the future. Because only the expansion of renewables will stabilize the electricity price in the medium term," says Herzog: "If confidence in a healthy market is lost, it will be difficult to stimulate the investments needed for the major growth of the energy transition."