ElWG Check 2.0: the new draft law at a glance

Authors: Johannes Hartlieb, Mario Laimgruber, Alexander Gimona

It had long been eagerly anticipated. Last Friday, the time had finally come: the new Electricity Industry Act was released for a four-week review period. Austria’s Minister for Economic Affairs, Wolfgang Hattmannsdorfer, modestly describes it as “the biggest electricity market reform in the last 20 years.”

Social tariffs, peak shaving, and flexible network charges are just some of the buzzwords that have been circulating in the (social) media since last Friday. Expectations are high. The energy transition is to be accelerated, supply security ensured, and electricity costs reduced. But what exactly is in the new ElWG? We’ve taken a close look at the draft.

The biggest electricity market reform in the last 20 years.

Minister for Economic Affairs, Hattmannsdorfer

Key points

The draft is clearly influenced by the EU’s response to the energy crisis: the “Clean Industrial Deal” and the recently amended EU directives on the internal electricity market call for far-reaching reforms. The new Electricity Industry Act aims to accelerate decarbonization, strengthen consumer rights, and adapt market rules to an increasingly decentralized system.

The following changes are particularly relevant:

Flexible tariffs and network charges: Electricity tariffs will become more diverse in the future. End customers have the right to supply contracts with dynamic prices (spot market-oriented) or fixed energy prices – both of which are mandatory in the offerings of large providers. In addition, they may conclude an aggregation contract (section 23) to, for example, market flexibility in consumption or generation. A lot is also happening with network charges: the previous fees are being restructured, and the much-discussed “peak shaving” (section 94a) is being given a legal framework (e.g., for feed-in from new PV systems).
The term “network access” is no longer used; instead, reference is made uniformly to “network connection.”
The provisions on control areas and balance groups are being adapted.
Smart metering & consumption control: Smart meters are to be rolled out more quickly and made more widely available. Quarter-hourly values will become standard (with an opt-out option), and new digital interfaces will give customers and aggregators equal access to data. In addition, there will be rights to installment payments (section 28) and prepayment meters (section 29).
The scope of direct lines is being expanded (section 59).
Energy communities & shared use: The role of citizen energy is being further strengthened. Peer-to-peer contracts, shared use, storage, and billing in energy communities are being legally secured and technically redefined. The goal: more self-sufficiency, less dependence on fossil fuels – and lower electricity bills through shared facilities.
The general network conditions for the distribution network will now be established by the regulatory authority (section 87)
Network infrastructure and supply security: Network operators are being assigned additional tasks and responsibilities. Digitalization, data platforms, flexibility procurement in the distribution network, greater transparency, and targeted feed-in control of new PV systems. The new ElWG requires operators to procure flexibility services on a market basis and defines new procedures for network reserves.
REMIT & market transparency: Market oversight rules are being tightened. The amendments to the EU REMIT Regulation are being implemented, with new obligations for market participants, greater supervisory options, and longer limitation periods for violations.
Network connection is subject to more detailed regulations, for example regarding the network connection point and grid level. The connection obligation is also being expanded (storage facilities).
The option of flexible grid access (section 96) is being introduced to facilitate the network connection of new green electricity plants, especially PV plants.
For the first time, and finally, the “closed distribution network” (section 113) is being regulated by law (in particular, electricity networks in industrial and commercial parks).
Last but not least, there is expanded protection for households (social tariff & energy poverty): a key element is the new social tariff (section 36), which automatically grants low-income households a subsidized electricity price. Within a consumption quota of 2,900 kWh, beneficiaries only pay the “lower reference value.” Above this, a price cap (“upper reference value”) applies. In addition, the Energy Poverty Definition Act (EnDG) establishes, for the first time, a clear legal framework to statistically record affected households and provide them with targeted support

Conclusion

The draft of the Electricity Industry Act represents an ambitious and comprehensive attempt to address key challenges of the future energy supply, from supply security and consumer rights to grid expansion and citizen energy. Without fundamentally questioning the existing system, the law creates innovative approaches and steers the transformation of the energy system in a regulated direction.

Ultimately, the actual implementation will be decisive, as will the final outcome of the parliamentary process. The review period runs until the beginning of August – then it will become clear whether this “biggest electricity market reform in decades” will find broad support and achieve the necessary two-thirds majority in the National Council.

In any case, we will continue to monitor current developments and keep you up to date.

Disclaimer

This article is for general information only and does not replace legal advice. Haslinger / Nagele Rechtsanwälte GmbH assumes no liability for the content and correctness of this article.