We would like to ensure that you are still receiving content that you find useful – please confirm that you would like to continue to receive ILO newsletters.
January 19 2015
Several key components of the federal Energy Efficiency Law entered into force on January 1 2015. The Energy Efficiency Law is one of many legal acts enacted to implement the EU Energy Efficiency Directive 2012/27/EC into national law.
Article 9 of the law requires large companies either to perform external audits at regular intervals or install an energy and environmental management system. Small and medium-sized enterprises are obliged only to obtain advice services. Energy suppliers must implement yearly energy efficiency measures in their operations, for their final customers or for other energy consumers.
Large enterprises must perform external energy audits or introduce an energy management system. For the purposes of the law, an 'enterprise' is "any organisation, organised under private law and permanently established, that engages in independent economic activity, be it the final energy consumer or the energy supplier".(1) Therefore, the term 'enterprise' is broadly defined and extends to associations whose activities might not primarily be profit oriented, but can nevertheless be economic in nature. The term does not extend to public corporations or undertakings, such as statutory professional organisations (eg, the Chamber of Commerce).
For the purposes of the law, 'large' is defined as any enterprise with:
In the context of this classification by size, consumer enterprises (ie, companies that purchase energy with the intention of consuming it in Austria) in which another company owns more than 50% will be regarded as part of the parent company. A group view of undertakings is thus adopted to determine the size of the enterprise. Due to this group view, shareholdings must be looked at in terms of the relationship between the parent and subsidiary and individually assessed to ascertain whether a majority shareholding exists for the purposes of Article 3(3) of the EU Energy Efficiency Directive. If this is the case, and the enterprise is considered a so-called 'associated' enterprise, the entire energy efficiency obligation will pass to the parent. In the case of multi-layered groups of companies, this attribution must be followed in repeated steps to the highest-level corporate parent.
This group view has raised questions. For instance, the Energy Efficiency Law does not specify how and when newly established subsidiaries will be included in the implemented energy efficiency concepts. In the absence of a specific stipulation, it can be assumed that establishing a new subsidiary does not automatically trigger an obligation to perform an energy audit, but the subsidiary must be included in the next scheduled energy audit.
Large enterprises must carry out external energy audits or introduce an energy and environmental management system. The results of an audit or the energy management system must immediately be transmitted to the Energy Efficiency Monitoring Office.
The definition of the term 'energy audit' coincides with that of the EU Energy Efficiency Directive.(2) However, Article 18 and Annex III of the law define specific minimum criteria for energy audits that seemingly exceed those of the EU Energy Efficiency Directive. In the light of these minimum criteria, industrial enterprises will likely need to disclose their product manufacturing or processing methods. This is problematic, as it may affect the protection of company secrets. Therefore, the requirements concerning the energy audit must not be interpreted too strictly; rather, audits must be limited to energy-relevant data collections and information. Economically sensitive manufacturing processes (in the narrowest sense of the word) should neither be collected nor retained as part of an audit.
In this context, Article 18(4) of the law – which is derived from the similarly poorly worded Article 8 of the EU Energy Efficiency Directive – should be highlighted, as it stipulates that energy audit contracts cannot contain clauses that make the disclosure of audit data to qualified/accredited energy service providers dependent on the condition that the consumer raises no objections against disclosure. From this it can be concluded that the final consumer cannot prevent the disclosure of potentially sensitive audit data to qualified/accredited energy service providers by means of contractual non-disclosure arrangements. However, both Article 8 of the EU Energy Efficiency Directive and Article 18(4) of the law can be read differently. The language can be understood to mean that only an unconditional blanket prohibition on disclosure (ie, a prohibition that requires no objection) is prohibited. The latter interpretation would be preferable, at least from a data protection standpoint; nevertheless, it would be helpful for the legislature to provided clarification in this respect.
Alternatively, large enterprises may opt to introduce an energy management system. However, the management system must also include regular internal or external energy audits, which in turn must satisfy the above requirements.
Remarkably, enterprises need not actually implement the saving measures recommended in the course of an audit or by the energy management system. The legislature obviously trusts that the measures will be implemented voluntarily because of the promised reduction in energy costs.
Energy suppliers must implement energy efficiency measures in their operations, for their final customers or for other energy consumers. Forty percent of the measures must be implemented in households. Annex I of the law lists various measures that qualify as efficiency measures. It is not mandatory for the measures to be implemented by the energy suppliers themselves; they can also issue tenders for energy efficiency effects. This implicitly means that efficiency effects are assignable. The intention behind making the measures transferable is to create an incentive system that rewards those that introduce more energy efficiency measures than legally required.
Furthermore, energy suppliers may opt to make compensation payments instead of introducing obligatory efficiency measures or documenting them. The amount of payable compensation is calculated by multiplying the non-fulfilled energy-saving obligation by 0.6%.
The National Energy Efficiency Monitoring Office is responsible for the assessment and evaluation of energy efficiency measures.(3) The intention is to provide guidelines for the documentation, assessment and assignment of energy efficiency measures by means of a decree (which has not yet been passed). The Energy Efficiency Law already contains the principles for the eligibility of measures. For instance, measures must contain the efficiency effects required by EU law and must exceed legal and technical minimum requirements or obligations. The last eligibility criterion has raised a question regarding the eligibility of efficiency measures implemented to upgrade International Plant Protection Convention plants to the best available technologies. Further, the requirement that a measure based on a subsidised incentive be assigned and therefore counted towards the obligation of a third party if the subsidising agency has approved the assignment also raises several important questions. For instance, it is unclear:
Therefore, energy suppliers are keenly waiting to see whether the eligibility decree will establish the relevant definitions and determinations and, if it does, what exactly these will be.
If a large enterprise wants to fulfil its obligation under Article 9 of the law, it must carry out its first energy audit within 11 months of the obligation coming into effect (in this case, by December 1 2015). Thereafter, audits must be performed in no more than four-year intervals. The auditor must immediately report the completion of an energy audit, its content and the findings to the monitoring office.
If a large enterprise intends to fulfil its obligation by introducing a management system, it must notify the monitoring office within one month of the obligation coming into effect (in this case, by February 1 2015). The management system must be fully implemented within 11 months of the obligation coming into effect (in this case, by December 1 2015).
In practice, many legal questions will arise in connection with the efficiency obligations of large enterprises and energy suppliers. In particular, the mechanisms of assignment and the eligibility of established energy efficiency measures will be the subject of many discussions. Whether the future eligibility guidelines will provide more clarity remains to be seen.
Energy suppliers will likely attempt to pass the costs of the energy efficiency measures that they must introduce to final customers. Whether this will be permissible will depend primarily on the terms of the existing energy purchasing contracts.
For further information on this topic please contact Bernd Rajal at Schoenherr by telephone (+43 1 53 43 70), fax (+43 1 53 43 76100) or email (firstname.lastname@example.org).The Schoenherr website can be accessed at www.schoenherr.eu.
The materials contained on this website are for general information purposes only and are subject to the disclaimer.
ILO is a premium online legal update service for major companies and law firms worldwide. In-house corporate counsel and other users of legal services, as well as law firm partners, qualify for a free subscription.