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24 February 2020
On 2 January 2020 the new government composed of the Austrian People's Party and the Green Party presented the government programme for 2020 to 2024. The programme contains comprehensive measures to promote the expansion of renewable energies. Accordingly, the Renewable Energies Expansion Act, which has been planned for a long time and was drawn up under the penultimate government, is to be enacted as quickly as possible. Based on the draft act already available, it is considered likely that the draft will need to be adapted only at individual points and not comprehensively revised.(1)
The reform of the green electricity support system is one of the core elements of the proposed package of measures for the expansion of renewable energies. It provides for:
Market premiums are to be determined within the framework of competitive tender procedures in which competing bidders will offer a certain remuneration price for the generation of renewable energy in cents per kilowatt hour. However, the price (ie, the value to be invested) does not correspond to the actual payments from the subsidies, but rather serves as an indicator to determine the market premium. Via direct marketing, the electricity is sold on the stock exchange at the best market value that can be achieved. The market value is also used to determine the market premium. Finally, the sliding market premium is calculated based on the remuneration price determined in the tender procedure minus the average market value achieved on the exchange.
As mentioned, this system essentially corresponds to the German Renewable Energy Act. The 'first come, first served' principle has been discussed for some time and is necessary for state aid law reasons.
Of particular note is the reservation made in the government programme that invitations to tender should only take place "where it makes sense to do so in order to achieve the objectives". This leaves the door open for exceptions for certain technologies, plant sizes and decentralised supply concepts. For example, exceptions could be granted for small plants or for citizen energy communities to spare these market participants cost-intensive tendering procedures and thus enable them to participate in the support system. It would also be possible to exempt certain technologies from the tendering principle.
As already circulated in the run-up to the Renewable Energies Expansion Act draft, the possibilities for designing so-called 'renewable energy communities' and 'citizens' energy communities' for increased decentralised energy supply are to be expanded and regional supply concepts strengthened. This complies with the requirements of the recently adopted EU Renewable Energy Directive (2018/2001/EU) and the EU Electricity Directive (2019/944/EU). 'Energy communities' are essentially associations of certain groups of persons or companies that invest in local generation units for the purpose of self and external supply or (innovative) energy services. Further, they aim to achieve economic benefits primarily for themselves and are designed to increase independence from established energy suppliers.
The government programme does not specify a legal form in which the implementation of decentralised supply concepts should be made possible. However, it includes a reference to the promotion of "cooperative associations", so it can be assumed that the foundation of renewable energy communities and citizen energy communities in the legal form of cooperatives will be made possible.
Against the background of the requirements for energy communities pursuant to the abovementioned EU directives, the legal form of a cooperative is comprehensible, since it meets all the mandatory requirements, especially the provision for open membership (ie, no fixed nominal capital) with the possibility of a simple exit option. Further, the legal form must not be primarily geared to producing financial profits, but to generating ecological, economic or social community benefits. Nevertheless, special regulations under the Austrian law on cooperatives will be required for the promotion of energy communities.
It remains to be seen whether the Austrian legislature will finally settle the question of the legal form of energy communities or leave the decision to the respective communities. In this case, an energy community may be formed in any legal form, provided that it meets the conditions of the relevant EU directives. These can include, for example, legal forms such as non-profit corporations (GmbHs). In any case, special provisions would have to be made under company law, which would be more or less extensive depending on the legal form.
The new government programme continues the aim of developing renewable energies. By 2030, 100% of Austria's electricity supply should come from renewable energy sources. To achieve this objective, fixed feed-in tariffs are to be replaced by sliding market premiums. The market premiums will be determined by means of tendering procedures and are generally to be extended to a term of 20 years. Exceptions to the tendering principle should be possible, but the details remain unclear. In addition, the role of decentralised supply systems, such as energy communities, should be strengthened. The focus will probably be on energy communities organised on a cooperative basis.
For further information on this topic please contact Bernd Rajal at Schoenherr by telephone (+43 1 534 37 50203) or email (email@example.com). The Schoenherr website can be accessed at www.schoenherr.eu.
(1) For further details on the government programme please see "New opportunities for renewable energy: Austrian government programme 2020 to 2024".
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