Green light from Brussels for Austria’s electricity network reserve!

Authors: Johannes Hartlieb, Alexander Gimona

On October 7th, 2025, the European Commission announced that it had approved the Austrian state aid scheme to ensure security of electricity supply (network reserve).

Background

The so-called network reserve was already approved in 2021 with the aim of activating reserves to safeguard against shortages. It was limited until 2026.

The current measure expands and extends this network reserve and replaces it with a new program that is to apply from October 2026 for five years. It provides that all types of capacities, including conventional power plants and storage facilities, can participate in competitive procedures. In this way, efficiency gains and cost limitations are to be achieved.

Commission decision

The Commission has examined the measure under the EU state aid rules and found it to be compatible with the internal market. In particular, it took into account that the measure can counteract a genuine market failure or a systemic risk to the electricity supply. In addition, public tenders ensure fair competition.

According to Executive Vice-President and Competition Commissioner Teresa Ribera, the scheme makes an important contribution to the security of electricity supply in Austria – and thus also to supply security in the European grid.

Significance for Austria and the EU

For Austria, this approval means two things: First, it creates planning certainty, as a legally secured instrument for the network reserve will be available from 2026 onwards. Second, it shows that Austria is acting in accordance with EU state aid requirements regarding capacity mechanisms and network reserve.

At the EU level, it is significant that the measure is open to various technologies – not only conventional generation, but also storage systems. In this way, Austria is following the trend toward more flexible, market-oriented systems for network and supply security..

Assessment and outlook

From a competition and electricity industry perspective, the approval is positive: The measure establishes a clear legal basis for capacity reserves without unnecessarily distorting competition. Nevertheless, some questions remain:

What will the detailed tendering and award modalities look like (e.g., durations, remuneration mechanisms, participation conditions)?
How will it be ensured that smaller or decentralized providers can also participate in the tenders and that not only large power plants are awarded?
To what extent will the costs be passed on to grid fees or electricity prices, and how transparent will this process be?

Conclusion

The approval of the Austrian state aid scheme for electricity supply security by the European Commission is an important step for national supply security and, at the same time, a signal that capacity mechanisms can be designed with competition and technology neutrality. However, it remains crucial how the practical implementation is carried out and how effectively the measure mobilizes the network reserve capacities.

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.