IERN International Energy Regulation Network

The generation sector is mainly publicly owned. Due to a constitutional act the main Austrian electricity companies are owned by federal, provincial or municipal governments.

The main generator is Österreichische Elektrizitätswirtschafts-AG (Verbund), followed by the nine provincial utilities: EVN, Wien Strom, STEWEAG-STEG , EAG OÖ, KELAG, TIWAG, Vorarlberger Kraftwerke AG, BEWAG and Linz AG. These few companies generate almost 95 % of all electricity injected into the public grid.

Since large numbers of cross-holdings are a feature of the Austrian electricity industry the generation sector is (from a national point of view) highly concentrated and new players only enter the protected (subsidised) area of renewables.

Wholesale market relies on bilateral negotiation, the Austrian Energy Exchange (EXAA) and the German Power Exchange (EEX). The Austrian and German electricity wholesale markets are closely interlinked and can be perceived as one price region.Balancing services (minute reserve) are provided by a market based mechanism.

Transmission and Distribution belong mainly to above mentioned state-owned vertically-integrated companies.

The national grid is divided into three control areas. The transmission networks are owned by the three legally unbundled TSOs: APG (100% subsidiary of Verbund), TIWAG Netz AG (100% subsidiary of TIWAG) and VKW.

Large distribution networks belong to the nine provincial utilities and are legally unbundled. There are further small distribution networks which add up to about 130 DSOs in Austria (mere accounting unbundling is required for small DSOs).

The grid tariffs are fixed by the NRA

The sector is mainly state-owned and dominated by the above mentioned vertically integrated provincial utilities. In 2001 five of them (Wienenergie, BEWAG/BEGAS, EVN, Linz AG and Energie AG) joined their trading and retail business into the Energieallianz Austria GmbH (EAA) and dominate the end customer market. In 2006 Linz AG and Energie AG withdrew from Energie Allianz.

But EAA still dominates the market for industrial customers in Austria. The vertically integrated utilities dominate the mass customer market in their respective network areas.

Foreign suppliers still have a very limited presence on the Austrian retail market. They evidently continue to prefer direct investments in Austrian energy companies.

Since full liberalisation in 2001 only few retailers have entered the market. Most of them are discount subsidiaries of incumbent companies, some others left the market and only two of them are fully independent from incumbents offering niche products (renewables). Switching ratios are still very modest.

Small portion of demand (about 12% in 2006) was met by domestic production, with OMV AG and RAG as producers OMV AG is owned 31.5% by ÖIAG (Austrian State) and 17,6% by IPIC (United Arabs Emirates). RAG is owned by Shell E&P Holding GmbH (25%) and RAG Beteiligungsgesellschaft (75%).

About 69% of the gas demand is met by imports from Russia, Norway (8%) and Germany (11%) on the basis of long-term supply contracts. Contracts until 2027 with Gazexport are held by EconGas GmbH and Gas - und Warenhandelsgesellschaft mbH (GWH).

The gas wholesale market is dominated by these long-term supply contracts which are linked to the oil price. Short-term trade on the wholesale market is carried out via the Central European Gas Hub which is located at Baumgarten between 36 active traders.

The network is divided in three levels:

• Three national transmission (transit) companies: TAG GmbH (89% owned by Italy's ENI SpA), BOG GmbH (51% owned by OMV Gas GmbH) and OMV Gas GmbH.
• Five supra-regional transmission companies
• 19 Regional Distribution Companies, subsidiaries of partly publicly owned integrated regional gas companies.

Almost 80% of the gas imported into Austria is transited to neighboring countries. Access to distribution, national and transit transmission systems is regulated, including General Terms and Conditions approved by the regulatory authority and determined tariffs (national transmission) or approved tariff methodology (transit transmission) respectively.

Gas is transported through Austria to downstream markets on the following transit systems:

• Trans-Austria-Gasleitung (TAG), running southwards;
• West-Austria-Gasleitung (WAG), running westwards;
• March-Baumgarten-Gasleitung (MAB), running northwards;
• Hungaria-Austria-Gasleitung (HAG), running to the south-east;
• Penta-West-Gasleitung (PW), running westwards; and
• Süd-Ost-Leitung (SOL), running southwards.

The Gas market was fully opened to October 1st, 2002. Unbundling between distribution system operation and supply has occurred – customers can freely choose their supplier of natural gas (principle “capacity goes with customer” – Balance Group Model.

The share of gas-fired power plants in natural gas consumption amounts to 39%, industrial customers account for 32% and residential & commercial customers account for 29%.

With the rising demand for gas especially in the South of Austria, a system expansion, based on a long-term plan will be realized over the next few years. The long term plan takes into account the market demand and will be approved by E-Control Commission.

• Consolidated Version of the Acts amended by the Energy Security of Supply Act of 2006 and the amendment to the Austrian Green Electricity Act of 2006 (German)­
• Electricity Act (ElWOG) (English)­
• Energy Steering Act (German)­
• Green Electricity Act (English)
• Regulatory Authority Act (English)
• Settlement Agencies Act (English)
• Competition Act (German)­

The Gas Management Act (GWG) is available here

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