ElWG Check: upgrade for energy communities

Authors: Johannes Hartlieb, Kaleb Kitzmüller

A disadvantage of Austria’s pioneering role in the implementation of energy communities was that hardly any practical experience from other member states could be drawn upon. All the more positive is the fact that the legal framework introduced by the 2021 EAG legislative package for the practical implementation of energy communities has proven to be quite suitable. This is also evident from the fact that the changes to the sections concerning energy communities in the new ElWG draft are relatively limited. That the planned adjustments nevertheless constitute, in some cases, extremely important “upgrades” to the regulatory framework for energy communities is illustrated below:

Changes to the general provisions

The core provisions on energy communities (EGs) can be found in sections 53 to 56 of the draft ElWG. Regulatory adjustments affecting both the renewable energy community (EEG) and the citizen energy community (BEG) can be found in section 55 of the draft ElWG, which essentially corresponds to section 16d of the ElWOG 2010, but introduces two important innovations:

Power of attorney must be made credible

In practice, it has been shown that the process of joining and leaving an energy community as well as the ongoing administration of membership, can indeed be quite challenging. In order to spare individual members/shareholders the associated coordination requirements with the grid operator, the initiators or other “caretakers” or service providers have usually taken over communication with the grid operators. In some cases, energy communities or service providers commissioned by them have issued declarations to grid operators on behalf of (new) members without referring to a power of attorney. This is likely to have led to repeated friction in the organizational handling with grid operators.

Through the newly created section 55(3) of the draft ElWG, legal certainty is now apparently to be established for such situations. Accordingly, in the future, a power of attorney for the energy community must be “made credible to the grid operator” by a member/shareholder. This provision, which is to be understood as a clarification (also according to the materials), is apparently based on the provisions on online switching contained in section 76(3) ElWOG 2010.

According to the general provisions on power of attorney agreements [sections 1002-1033 of the Austrian Civil Code (ABGB)], there is no formal requirement for both the mandate and the power of attorney. Nevertheless, third parties often only enter into negotiations with a representative upon presentation of a corresponding document, which is why powers of attorney are often drawn up in writing. However, it should be noted that, according to the rulings of the Austrian Supreme Court of Justice (RS0019498), third parties may generally rely on the power of representation of the person acting as representative. Accordingly, third parties do not always have to verify the truthfulness of the information provided by the alleged representative in order to secure their claims. A duty to inquire can only be assumed if doubts arise in individual cases. With regard to section 55(3) of the ElWG draft, it can therefore be argued that for the purpose of “making credible” it is sufficient to merely invoke the granted power of attorney, and that no (written) proof of the power of attorney needs to be submitted to the grid operator.

It is also interesting to note that, only if the energy community itself is authorized, it is obliged to provide credible evidence. Consequently, if a service provider is directly commissioned by the member/shareholder, making credible would not be required.

If the provision serves to accelerate communication with grid operators, it is certainly to be welcomed. In detail, however, some aspects could still be refined.

Operational and disposal authority involving surplus feeders

An important provision is introduced in section 55(6) of the ElWG draft. Due to the requirement to transfer operational and disposal authority to the energy communities, the participation of “surplus feeders” has been controversial. Depending on the interpretation of the term “operational and disposal authority,” it has sometimes been assumed that, due to the inadmissibility of multiple ownership of a metering point, surplus feeders cannot participate in energy communities at all. To clarify this issue, it is to be noted that for installations operated by self-suppliers, operational and disposal authority does not have to be transferred to the community. This shall also apply in cases where a self-supplier participates in multiple communities with their power generation plant.

In the case of full feeders, operational and disposal authority must still be transferred to the energy community that actually operates and disposes of the plant.

With regard to multiple participation (permitted from January 1st, 2024, and expected to be possible from April 2024), it is stipulated that operational and disposal authority over a power generation plant may, in any case, lie with only one energy community.

Amendments to the EEG

Section 54(2) of the draft ElWG stipulates that the proximity criterion in the regional area must also be met in the future where medium-voltage busbars can be connected without transformation.

More significant, however, is the insertion of section 54(3) of the draft ElWG, according to which so-called “carrier organizations” will in the future be able to combine multiple local or regional EEGs in one legal entity, “provided that these are located in the concession area of a grid operator within a political district” This means that in the future it will be possible to combine several EEGs in one legal entity. What remains unclear is the impact this will have on the handling of these individual EEGs. With regard to voting rights, cost allocation, liability, and profit distribution, this may lead to challenges. It is conceivable that, similar to condominium law, allocation keys or voting/accounting units that deviate from the shares will be established. However, depending on the legal form used for the EEG, different solutions may be necessary. Overall, however, this change is to be welcomed.

Changes to the Citizen Energy Community (BEG)

During the consultation process on the EAG package, it was suggested that energy communities could be subject to the Austrian Trade Regulation Act. In order to remove any uncertainty in this regard, it was stipulated in section 79(4) EAG (for the EEG) and section 16b(6) ElWOG 2010 (for the BEG) that the provisions of the Trade Regulation Act 1994 do not apply to the EEG/BEG. However, the provision contained in section 16b(6) ElWOG 2010 for BEGs is no longer included in section 53 of the ElWG draft. In the absence of any comments on this in the explanatory notes, it can probably be assumed that this is a drafting oversight, since the removal of this clarification would reignite the already known debate and lead to considerable legal uncertainty.

Excursus: changes to GEA

The regulations governing communal generation plants (GEAs) are set out in section 52 of the draft ElWG and essentially correspond to the previous section 16a of the ElWOG 2010. The changes make it clear that energy storage facilities can be operated together with communal generation plants. In this case, the energy storage facility is part of the communal generation plant.

Non-discrimination requirement for suppliers

Section 57 of the ElWG draft introduces an interesting new provision. It stipulates that suppliers may not discriminate against participants in GEAs, EEGs, and BEGs. This means that they may not impose discriminatory requirements, procedures, or fees. In particular, no minimum electricity supply quantities may be specified, and only those costs that have actually been incurred by the supplier due to the respective case may be passed on to end customers.

We will discuss the possible effects of this non-discrimination requirement here in more detail.

Summary

The planned changes in the ElWG draft are largely to be considered sensible. It is unfortunate, however, that some of the “teething problems” that have emerged in practice have not been addressed. For example, a definition of the term “operational and disposal authority” would have been helpful. It remains to be seen what changes the parliamentary process will bring.

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.