The EU Commission has managed to disappoint many sides with its proposal for a new electricity market design in Austria. For Energy Minister Leonore Gewessler (Greens), the planned reform is not “a big hit”, but the ÖGB and the Chamber of Labor cannot see any significant changes either, and WKÖ Secretary General Karlheinz Kopf misses an emergency mechanism for a temporary decoupling of electricity and gas.
“It’s not the big upheaval,” is also the first assessment of the energy agency energy market expert Karina Knaus. However, it is still far too early for a final assessment, Knaus told APA. “There are a few points that have not yet been fully defined.” It is also not a complete system changeover. That would not be possible within just one year – by then the reform is to be implemented.
Retention of merit order causes criticism
The retention of the merit order principle, in which the price of electricity is always determined by the system that is necessary to cover the electricity demand, caused the most criticism. The principle means that expensively produced electricity, for example from gas-fired power plants, drives up the entire electricity price.
Although the aim was to reduce the dependence of electricity prices on short-term price developments, the short-term price signals are of central importance for the creation of the European internal electricity market, according to EU circles. Additional mechanisms are now being introduced that enable longer-term price planning for both consumers and companies.
More stability planned
The proposal envisages cushioning the short-term price development through longer-term contracts, on the one hand between private individuals, such as an electricity producer and a company, on the other hand through “contracts for differences” with which EU countries can ensure new investments in the electricity market. These treaties are already in use in some countries.
The reform should give consumers the right to fixed electricity prices for a certain period of time. In addition, electricity consumers should be able to conclude more than one tariff, for example a tariff for the general electricity consumption of a household, combined with more variable electricity tariffs for heat pumps or charging electric cars. A new right for electricity consumers to share renewable energy, for example with neighbors, is also planned.
