“Doing the Right Thing Now”: the government program from an energy law perspective

Better late than never: Austria (finally) has a new government. The new government program is titled “Doing the Right Thing Now. For Austria” and spans 240 pages. As expected, the chapter on energy is given considerable attention. We provide information on planned initiatives in the field of renewable energies and offer an initial assessment of the new federal government’s intentions.

Affordable energy prices as a core concern

The preamble to the government program already makes the new administration’s core concern clear: energy should remain – or once again become – affordable, following years of rising energy prices. Affordable energy and affordable housing are presented as being inextricably linked. It is evident that the government program sees the responsibility for this (also) resting with the state.

A boost for the energy transition

The government program acknowledges that accelerating approval procedures is essential for transforming the energy industry. A particular focus is placed on the planned Renewable Energy Expansion Acceleration Act (Erneuerbaren-Ausbau-Beschleunigungsgesetz, EABG), which aims to streamline approval procedures for renewable energy projects. This also includes the expansion of energy grids. Modeled after the environmental impact assessment, a one-stop shop is to be established – providing project applicants with a single point of contact.

Competition and citizen participation

Key issues are addressed in the “Energy and Grids” section: Households and businesses are to be more actively involved in the energy transition, and competition is to be strengthened – for example, through energy communities, peer-to-peer contracts or Power Purchase Agreements (PPAs). At the European level, a reform of the merit-order pricing mechanism is being pursued to ensure stable prices. Energy companies are also expected to place greater emphasis on the public interest in affordable energy.

In addition, the development of a hydrogen industry as well as the sustainable use of existing gas pipeline infrastructure are being discussed.

Gas infrastructure

The EU Gas Package is to be implemented as quickly as possible, beginning with the appointment of the responsible regulatory authority. A coordinated decommissioning of parts of the gas network is intended to ensure an efficient transition to renewable energy sources. The importance of a cost-effective and coordinated phase-out of fossil gas is repeatedly emphasized.

Network infrastructure planning

The government program also includes the development of a new expansion plan for the distribution network. The Integrated Austrian Network Infrastructure Plan (ÖNIP) is to be further developed. The decentralized expansion of renewable energy sources is to be coordinated with that of the grids and storage facilities in order to prevent oversized capacity and ensure cost efficiency.

Energy crisis management

An “energy crisis mechanism” is to be developed, the aim of which is to ensure supply as well as the affordability and competitiveness of electricity and gas prices. It is clear that price increases may still occur in times of crisis, but under the new model, they must at least be justified. In addition, the expansion of renewable energy is to be accelerated to enable full coverage of domestic electricity consumption.

Energy laws as “flagship legislation”

The Renewable Energy Expansion Acceleration Act (EABG), the Renewable Gas Act (EGG), and the Electricity Industry Act (ElWG) are described as “flagship laws.” They are scheduled to be implemented by summer 2025. This legal framework is intended to help modernize the energy system, promote the implementation of targeted innovations, and enhance market competition. This is referred to as a transformation of the energy system. The expansion of green gases is expected to reach 6.5 TWh per year by 2030, along with the practical implementation of the RED III requirements. In addition, the implementation of the EU Buildings Directive is intended to lead to the decarbonization of space heating by striving to reduce primary energy consumption and revising the funding framework for thermal renovations..

First assessment

In many areas, the new government program addresses issues that were already a focus of the previous administration. This becomes clear when the program refers to “flagship” legislation that has been in preparation for years. This applies to the new Energy Industry Act (ElWG) as well as the Renewable Energy Expansion Acceleration Act (EABG), and the Renewable Gas Act (EGG) – all laws that have been in the planning stages for some time and failed due to the high hurdles in parliament. In this respect, the plan to pass all laws by summer 2025 is certainly ambitious.

One thing is clear: The entry into force of the ElWG, EABG, and EGG would undoubtedly serve as a major boost for the transformation of the energy system – without requiring massive public spending. This is already ensured by the regulatory simplifications for energy communities and Power Purchase Agreements, as well as the accelerated approval procedures for generation facilities and grids.

It remains to be seen whether this ambitious plan will succeed. We’ll be following the developments closely.

You can find more information on this area of law here:

 

31. March 2025

 

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