Alternative Energy & Power 2019

Last Updated August 07, 2019

Austria

Law and Practice

Authors



DLA Piper Weiss-Tessbach Rechtsanwälte GmbH was founded in 1878 in Vienna and is the longest-established business law firm in Austria. It has been a fully integrated part of the global law firm DLA Piper since 2003 and provides its clients with legal and business solutions locally, regionally and internationally using integrated teams of lawyers with experience that spans a broad range of disciplines. DLA Piper Austria is widely recognised for its sector-specific approach to legal services including a top-of-the-market energy sector practice offering in-depth knowledge of all regulatory and operational, as well as transactional, legal aspects related to the energy sector in Austria and beyond. With a particular emphasis on renewables projects and electricity transmission and transport, the Austrian energy team regularly advises national and international players in the energy sector on all aspects of financing and operating energy infrastructure and energy transportation and distribution.

Austria is a federal state (Bund) with certain legislative competences retained by the federal legislator, and others delegated to the nine states (Länder), which comprise Burgenland, Carinthia (Kärnten), Lower Austria (Niederösterreich), Salzburg, Styria (Steiermark), Tyrol (Tirol), Upper Austria (Oberösterreich), Vienna (Wien) and Vorarlberg.

The principal law governing the ownership and structure of the power industry is the federal state-level Electricity Management and Organisation Act (Elektrizitätswirtschafts- und -organisationsgesetz 2010, or the ElWOG 2010).

The ElWOG implements the third energy package of the European Union (EU) which is designed to liberalise the electricity markets of individual EU member states. The ElWOG sets out provisions on the operation of electricity networks; the rights and obligations of network operators, specifically third party network access; the unbundling of transmission system operators; the operation of transmission networks and the conditions for concessions to operate distribution networks; and the determination of system usage tariffs.

While the ElWOG is a federal act, some of the ElWOG provisions delegate authority to the state parliaments to enact state-specific legislation. The main state-level acts are:

  • Burgenland Electricity Act (Bürgenländisches Elektrizitätswesensgesetz 2006);
  • Carinthian Electricity Management and Organisation Act (Kärtner Elektrizitätswirtschafts- und -organisationsgesetz 2011);
  • Lower Austrian Electricity Act (Niederösterreichisches Elektrizitätswesensgesetz 2006);
  • Salzburg State Electricity Act (Salzburger Landeselektrizitätsgesetz 1999);
  • Styrian Electricity Management and Organisation Act (Steiermärkisches Elektrizitätswirtschafts- und -organisationsgesetz 2005);
  • Tyrolean Electricity Act (Tiroler Elektrizitätswesensgesetz 2012);
  • Upper Austrian Electricity Management and Organisation Act (Oberösterreichisches Elektrizitätswirtschafts- und -organisationsgesetz 2006);
  • Viennese Electricity Management Act (Wiener Elektrizitätswirtschaftsgesetz 2005); and
  • Vorarlberg Electricity Management Act (Vorarlberger Elektrizitätswirtschaftsgesetz 2014).

By way of example, this chapter makes reference to the state of Lower Austria as one of the most populous states and one of the most relevant from an electricity infrastructure perspective. In Lower Austria therefore, both the ElWOG and the Lower Austrian Electricity Act 2005 (Niederösterreichisches Elektrizitätswesengesetz 2005, or NÖEWG) apply.

The Federal Constitutional Law which regulates ownership in Austrian Electricity Market Companies (Bundesverfassungsgesetz, mit dem die Eigentumsverhältnisse an den Unternehmen der österreichischen Elektrizitätswirtschaft geregelt werden, or Constitutional Law on Ownership) sets out the minimum state ownership of listed energy companies. This adopts provisions from the second Electricity Market Nationalisation Law (Bundesgesetzes über die Verstaatlichung der Elektrizitätswirtschaft) which originated in 1947 as a basic law with non-constitutional status, thereby giving these nationalisation provisions constitutional status.

Annex 1 of the Constitutional Law on Ownership sets out that the following companies must be at least 51% in the ownership of either the Federal State or Verbund:

•       Österreichische Donaukraftwerke AG (Vienna);

•       Österreichische Draukraftwerke AG (Klagenfurt);

•       Osttiroler Kraftwerke GmbH (Innsbruck);

•       Tauernkraftwerke AG (Salzburg); and

•       Verbundkraft Elektrizitätswerke GmbH (Vienna).

Annex 2 of the Constitutional Law on Ownership sets out that the following companies must be at least 50% in the ownership of either the Federal State or Verbund:

•       Donaukraftwerk Jochenstein AG (Passau);

•       Die Ennskraftwerke AG (Steyr); and

•       Die Österreichisch-Bayerische Kraftwerke AG (Simbach/Inn).

Annex 2 of the Constitutional Law on Ownership sets out that the following state companies (Landesgesellschaften) must be at least 51% in the ownership of one of the nine relevant states or an entity which is at least 51% in the ownership of one of the nine relevant states:

•       Burgenländische Elektrizitätswirtschafts Aktiensgesellschaft (Burgenland);

•       Kärntner Elektrizitäts-Aktiengesellschaft (Carinthia);

•       EVN Energieversorgung Niederösterreich AG (Lower Austria);

•       Oberösterreichische Kraftwerke AG (Upper Austria);

•       Salzburger Aktiengesellschaft für Energiewirtschaft (Salzburg);

•       Steirische Wasserkraft- und Elektrizitäts-Aktiensgesellschaft (Styria);

•       Tiroler Wasserkraftwerke AG (Tyrol);

•       Vorarlberger Kraftwerke AG (Vorarlberg); and

•       Wiener Stadtwerke Elektrizitätswerke Wienstrom (Vienna).

Generation

The main generation companies in Austria are Verbund AG (51% state owned), EVN AG (51% owned by the State of Lower Austria) and Wien Energie GmbH (indirectly owned by the City of Vienna).

Transmission

The main transmission system operator in Austria is the Austrian Power Grid AG (APG), which is responsible for the transmission system across eight of the nine Austrian states. APG is a 100% subsidiary of Verbund AG, however APG is functionally unbundled from Verbund as an independent transmission system operator (ITO). Key requirements of this unbundling are the complete separation of the personnel, information technology and communication sectors, a ban on shared services and the strict regulation of the relationship of APG management with respect to Verbund AG.

Transmission in the western-most state, Vorarlberg, is operated by VKW-Übertragungsnetz AG (indirectly owned by the State of Vorarlberg).

Distribution

The main distribution system operators in Austria are the provincial electricity companies, eg, Wiener Netze, Netz Niederösterreich, Netz Oberösterreich, Netz Burgenland, Salzburg Netz, and Energienetze Steiermark, which are mostly directly or indirectly owned by the respective states.

Supply

There are over 100 suppliers in Austria, but the main suppliers include Verbund AG (as above, 51% state owned) and individual state companies, which are constitutionally at least 51% owned by local authorities or companies in which local authorities hold at least 51% ownership (see 1.1 Principal Laws Governing the Structure and Ownership of the Power Industry).

The control of the acquisition of certain shareholdings in Austrian companies, which are considered as being of general interest and of interest to the defence goods industry, has been integrated into the Foreign Trade Act (Außenwirtschaftsgesetz 2011). As the energy sector is deemed as being of general interest, any potential acquisitions which fall within the scope of the Act require the approval of the Federal Ministry of Digital and Economic Affairs (Bundesministerium Digitalisierung und Wirtschaftsstandort).

Authorisation is required if the following apply:

  • the target is a private limited company (Gesellschaft mit beschränkten Haftung or GmbH) or public limited company (Aktiengesellschaft AG) or a partnership with an annual turnover of EUR700,000;
  • the acquirer is an individual who is not a citizen of an EU member state, an EEA state or Switzerland, or is a company with its seat in a country outside the EU, EEA or Switzerland; and
  • the acquirer will hold a stake of at least 25% or more of the voting rights in the target after the transaction.

The benchmark is the impact of the acquisition on the security of supply.

There are no specific restrictions regarding the sale of power industry assets or businesses, or other transactions such as amalgamations and mergers. In Austria, the commercial law (Unternehmensgesetzbuch or UGB), the civil code (Allgemeines bürgerliches Gesetzbuch or ABGB), the Limited Liability Company Act (Gesetz über Gesellschaften mit beschränkter Haftung or GmbHG) and the Stock Corporation Act (Aktiengesetz or AktG) govern the establishment of companies, as well as the process of mergers and acquisitions.

In addition, every entrepreneur working in Austria is bound by antitrust rules in the exercise of their economic activity. On the one hand these arise directly from European Competition Law (Articles 101 and 102 TFEU) and on the other hand from domestic legislation, in particular the Cartel Act (Kartellgesetz 2005 or KartG) and the Competition Act (Wettbewerbsgesetz or WettG). To prevent a concentrated market structure from leading to a reduction in competition, anticipatory control is provided for mergers based on their turnover. Mergers that exceed specified turnover thresholds must register with the relevant competition authority (either the EU Commission in cases with EU relevance or the Federal Competition Authority for Austrian matters).

The main regulatory authority for the electricity and gas sector is Energie Control Austria (E-Control), established by the Energie Control Act (Energie-Control-Gesetz 2010). E-Control is a public law institution with its own legal personality.

The main aims of E-Control are:

  • the promotion of a competitive, secure and environmentally sustainable internal market in electricity and natural gas;
  • the effective opening up of the market to all EU customers and suppliers;
  • ensuring the conditions are right for the effective and reliable operation of electricity and gas networks, taking into account the long-term objectives;
  • the development of competitive and functioning regional markets in the EU;
  • the lifting of existing restrictions on electricity and gas trade between EU member states;
  • ensuring that network operators and network users have appropriate incentives, both short and long term, to increase network efficiency and promote market integration;
  • to implement measures that ensure customers benefit from the efficient functioning of the national market, promote effective competition and contribute to consumer protection; and
  • to ensure the integrity and transparency of the wholesale energy market.

In June 2019, the EU co-legislator passed the final act of the Clean Energy for All Europeans package. This is designed to develop upon the Third Energy Package to cover the period from 2021 until 2030. The acts are:

  • Directive (EU) 2018/844 on the energy performance of buildings and Directive 2012/27/EU on energy efficiency;
  • Directive (EU) 2018/2001 on the promotion of the use of energy from renewable sources;
  • Directive (EU) 2018/2002 amending Directive 2012/27/EU on energy efficiency;
  • Regulation (EU) 2018/1999 on the Governance of the Energy Union and Climate Action, amending Regulations (EC) No 663/2009 and (EC) No 715/2009 of the European Parliament and of the Council, Directives 94/22/EC, 98/70/EC, 2009/31/EC, 2009/73/EC, 2010/31/EU, 2012/27/EU and 2013/30/EU of the European Parliament and of the Council, Council Directives 2009/119/EC and (EU) 2015/652 and repealing Regulation (EU) No 525/2013 of the European Parliament and of the Council;
  • Regulation (EU) 2019/941 on risk-preparedness in the electricity sector and repealing Directive 2005/89/EC;
  • Regulation (EU) 2019/942 establishing a European Union agency for the co-operation of energy regulators;
  • Regulation (EU) 2019/943 on the internal market for electricity; and
  • Directive (EU) 2019/944 on common rules for the internal market for electricity and amending Directive 2012/27/EU.

Most of the directives are to be implemented prior to 2021. In the context of the electricity markets, the ElWOG is expected to be the legal instrument which will be used to implement the updated electricity directive. In turn, the nine individual states will be expected to implement the relevant delegated provisions.

As part of its Mission 2030 climate-energy strategy published in September 2018, the Austrian government under Chancellor Sebastian Kurz set itself the goal of covering 100% of Austria's total national electricity consumption from renewable sources by 2030.

Following the collapse of the ruling ÖVP-FPÖ coalition and subsequent motion of no confidence against Chancellor Kurz in early 2019, however, an interim government was sworn in until national elections take place in late 2019.

Austria has generally been progressive in promoting the development of renewable energy generation, the use of biofuels and e-mobility, and has one of the highest renewable percentages in the gross final consumption of energy within the EU. As such, it is therefore unlikely that these policies will be materially changed moving forward.

In Austria, currently more than 70% of electricity generated originates from renewable sources. Due to its topographic location, water (both run-of-the-river and pumped storage) and wind are the two main renewable energy sources in Austria.

Historically, Austria has not directly relied on nuclear power. In 1978, shortly after the completion of construction of the first Austrian nuclear power plant in Zwentendorf an der Donau in Lower Austria, a referendum initiated by then-Chancellor Bruno Kreisky on the use of nuclear power was held. This was the first national referendum in the Austrian Second Republic. With an outcome of 50.5% against the use of nuclear power, the Zwentendorf power plant never became operational. Subsequently, the prohibition of nuclear power generation in Austria was enacted into law in 1978, and as of 1999 this prohibition was given constitutional status.

Nevertheless, there are a number of nuclear power plants located close to Austria's borders, such as Temelíin in the Czech Republic which is 60 km from the border. As such, despite its anti-nuclear standpoint, through the import of electricity from other EU member states, Austria does consume electricity from nuclear power.

From the 1990s until 1 October 2018, Austria and Germany shared a single electricity market with a common price zone, whereby electricity was traded freely between the two countries.

As of 1 October 2018, an upper limit of 4,900 MW was placed on the amount of electricity that could be traded between Austria and Germany. This was done in an effort to ease grid congestion caused by poor interconnectedness between the two countries. This had prevented the physical delivery of power being traded and caused surges of electricity destined for Bavaria and Austria, through neighbouring countries such as the Czech Republic and Poland. A complaint was lodged with the Agency for the Cooperation of Energy Regulators (ACER), which, in its binding decision in 2016, decided that the common price zone be split.

As Austria depends on electricity imports from Germany, Austrian wholesale electricity prices have increased as a result. Germany is currently promoting the development of further north-south electricity interconnectors which should alleviate the grid congestion. However, the construction of these will probably take a number of years.

Austria's electricity market is based on a balancing group model, whereby suppliers and customers are consolidated into a number of virtual groups in which the supply and demand are balanced. Each market participant is obliged to be a member of a balancing group.

Each market participant therefore delivers or removes energy from its respective balance group, so that the compensation for generation and demand fluctuates for each individual group. Each group is also obliged to balance energy consumption and generation. If unforeseen fluctuations in production or demand occur, the energy balance in the grid must be regulated by switching generating units on the grid on or off. The cost of these compensatory measures is offset against the balance group that caused the respective deviation. The deviations and the offsetting are calculated by an independent balance group co-ordinator.

Wholesale trading is mainly conducted through bilateral contracts between suppliers and producers over the counter (OTC). However, trading also occurs via the Austrian power exchange EXAA.

Imports and exports of electricity to and from other jurisdictions are permitted, and Austria is highly dependent on the importation of electricity.

As part of the EU, the Austrian electricity market is subject to EU laws on the internal energy market which enforce the principle of free movement of electricity across the EU. In addition to Directive 2009/72/EC, as implemented in the ElWOG and state laws, and Regulation (EC) 714/2009 governing cross-border trade in electricity, subsidiary network codes include:

  • Commission Regulation (EU) 2015/1222 establishing a guideline on capacity allocation and congestion management;
  • Commission Regulation (EU) 2016/1447 establishing a network code on the requirements for grid connection of a high-voltage direct current system and direct current-connected power park modules;
  • Commission Regulation (EU) 2016/1719 establishing a guideline on forward capacity allocation;
  • Commission Regulation (EU) 2017/1485 which establishes a guideline on electricity transmission system operation and sets out the regulatory framework for electricity imports, exports and co-operation between Austrian transmission system operators and those of neighbouring countries;
  • Commission Regulation (EU) 2017/2195 establishing a guideline on electricity balancing; and
  • Commission Regulation (EU) 2017/2196 establishing a network code on emergency and restoration.

The Austrian supply mix in 2018 was as follows:

  • Biomass: 16.8%
  • Geothermal       : 1.2%
  • Hydro: 9.6%
  • Wind: 1.5%
  • Solar: 0.3%
  • Biofuel: 2.2%
  • Gas: 22.4%
  • Coal: 8.6%
  • Oil: 35.7%
  • Net imports: 1.6%

Source: Bundesministerium Nachhaltigkeit und Tourismus, Energie in Österreich 2018, Zahlen, Daten, Fakten

Subject to 1.4 Principal Laws Governing the Sale of Power Industry Assets, above, there are no concentration limits in Austria.

In accordance with the Competition Act, the Federal Competition Authority (Bundeswettbewerbsbehörde) is responsible for ensuring effective competition and for responding to distortions or restrictions of competition within the meaning of the Cartel Act, or European competition rules in individual cases, and for ensuring compatibility with EU law.

The Federal Competition Authority must work towards compatibility with the decisions of E-Control as regulator when applying antitrust law and it is empowered to provide E-Control with the information required for the performance of its duties in accordance with the principles of data protection. The Federal Competition Authority may also request E-Control to provide information and opinions, and for this purpose, to bring all the information to the attention of the parties and to provide any documentation that they need.

Without prejudice to the competence of the Federal Competition Authority, for the duration of the proceedings E-Control is entitled to provisionally prohibit the performance of the relevant activity by the party under investigation.

The Regulation on Energy Market Integrity and Transparency (Regulation (EU) No 1227/2011, or REMIT) sets out the monitoring of wholesale energy trading in Europe, and prohibits insider trading and market manipulation. E-Control is responsible for collecting data from Austrian market participants and for national monitoring compliance with REMIT.

The main climate change laws or policies for Austria are:

  • the Climate Protection Act (Klimaschutzgesetz or KSG) which sets out the national framework for compliance with emission caps;
  • the Green Electricity Act 2012 (Ökostromgesetz 2012 or ÖSG)
  • the Emission Certificate Act (Emissionszertifikategesetz 2011 or EZG) which implements the EU Emissions Trading System Directive 2003/87/EC (as amended);
  • Regulation (EC) No 219/2009 adapting a number of instruments subject to the procedure referred to in Article 251 of the Treaty to Council Decision 1999/468/EC, with regard to the regulatory procedure with scrutiny;
  • Commission Regulation (EU) No 389/2013 establishing a Union Registry pursuant to Directive 2003/87/EC and Decisions No 280/2004/EC and No 406/2009/EC; and
  • Regulation (EU) No 421/2014 amending Directive 2003/87/EC for establishing a scheme for greenhouse gas emission allowance trading within the community, in view of the implementation by 2020 of an international agreement applying a single global market-based measure to international aviation emissions.

In Austria, there are presently two operating coal plants, one of which is to be closed in 2019, and the other in 2020. There are, however, currently no plans to open new coal plants. Legislation related to the construction of generation facilities, detailed in 4.1 Principal Laws Governing the Construction and Operation of Coal Facilities, generally covers the conditions and process of retiring power plants.

In July 2011 the amended Green Electricity Act 2012 (Ökostromgesetz 2012 or ÖSG) was enacted, implementing Directive 2009/28/EC on the promotion of energy from renewable sources.

The ÖSG provides for the purchase of electricity from renewable energy sources at fixed feed-in tariffs. Payment to participating generators is provided by the Clearing and Settlement Agency (Ökostromabwicklungsstelle or ÖMAG), which is obligated to contract with eligible new generators provided that the statutory funding (EUR50 million per annum) has not been exhausted. This is granted to applicants on a first come, first served principle.

Renewable source electricity plants that receive a contract with ÖMAG supply electricity at the feed-in tariffs specified in the Green Electricity Order (Ökostromverordnung). The duration of the tariff period is 15 years for plants dependent on raw materials such as biomass or biogas, and 13 years for other technologies (eg, photovoltaic and wind power). The feed-in tariffs are specified in the Green Electricity Feed-In Tariff Order (Ökostrom-Einspeisetarifverordnung).

The funds are mainly raised via a green electricity flat rate and green electricity subsidy. The green electricity flat rate is a lump sum levied from all end-consumers connected to the national grid. The green electricity subsidy, set annually by the Federal Minister for Sustainability and Tourism, is collected from all end-consumers proportionate to their respective network usage and network loss charges paid.

The principal laws governing the construction and operation of generation facilities are:

  • the ElWOG and delegated state electricity laws, such as the NÖEWG, which governs general aspects of the power industry, including the granting of permits for the construction and operation of power stations;
  • the Federal Environmental Audit Act (Umweltverträglichkeitsprüfungsgesetz 2000 or UVPG 2000), which governs the process for obtaining a federal environmental impact authorisation granted by the respective state government;
  • the Water Act (Wasserrechtsgesetz 1959 or WRG) is applicable when using water for energy production, or when using groundwater, or when groundwater balance is affected;
  • the Forestry Act (Forstgesetz 1975) is applicable if wooded areas are to be cleared for construction;
  • the Waste Management Act (Abfallwirtschaftsgesetz 2002 or AWG) which governs an approval requirement for certain waste; and
  • the relevant nature conservation legislation for the relevant federal state, eg, the Lower Austria Nature Protection Act (Niederösterreichisches Naturschutzgesetz 2000), which is applicable in specially protected areas.

The regulatory process and the factors that are taken into account in the decision to approve a generation project differ according to the type of generation facility, the impact on the environment, and also the state in which authorisation is to be obtained.

The NÖEWG provides for two procedures:

  • a simplified procedure for power generation plants intended solely for emergency power supply or with a maximum capacity of 500kW; and
  • a regular procedure.

Under the simplified procedure, provided the application is complete, details of the project will be made public by posting a notice at the local community council and by submitting the project documentation to the municipality during a specified period. During this period, qualified neighbours can submit justified objections. The authority investigates by obtaining expert opinions and determining whether the conditions allow for approval. If necessary, approval is issued by a formal decision. Specific orders relating to the construction and operation of the plant may be issued.

For a regular procedure, a formal oral hearing is scheduled after the application has been deemed complete. The subject matter, time and place of the hearing are announced on the official noticeboard of the local community council, and where appropriate, on the official noticeboard of neighbouring municipalities. Qualifying neighbouring landowners near the site of the prospective power generation plant are personally informed. The authority makes its investigations by obtaining expert opinions to determine whether the conditions allow for approval. If necessary, the approval is issued by a formal decision. Specific orders relating to the construction and operation of the plant may be issued.

Annex 1 of the UVPG lists 89 types of projects deemed to have significant environmental impact, for which an environmental impact assessment is required. Regarding energy generation, this applies to a number of projects including hydropower plants, thermal power plants with a minimum fuel heat output of 200MW or overhead power lines with a rated voltage of at least 220kV and a length of at least 15km.

Pursuant to Annex 1, certain projects are subject to a simplified assessment procedure, including wind turbines with a total electrical output of at least 30MW. A third class of projects is subject to the fulfilment of specific conditions, an investigation done on a case-by-case basis, and where required, the project may be subject to a simplified assessment procedure.

If the project requires an environmental impact assessment, in addition to the above, the applicant must submit an environmental impact statement with the application. It must describe the project, the main alternatives reviewed, the environmental impact of the project and the measures designed to prevent or mitigate the impact. The public is greatly involved in this procedure, and the assessment of the potential impact on the environment will be carried out by experts from a wide variety of disciplines, as appointed by the authority. These experts will be required to jointly prepare a comprehensive environmental impact report.

Generation plants must be constructed, modified and operated in a manner that conforms with water protection regulations. State-of-the-art technology must be used to construct and operate the plant, as well as to store equipment or other materials. This is to ensure that the life or health of the plant operator, the state of neighbouring properties and other property rights are not endangered. Furthermore, neighbours must be protected against unreasonable levels of noise, smell, dust, fumes, vibrations and the absence of light (the latter most relevant in the case of wind turbines). The plant must be constructed and operated in an energy-efficient manner and in accordance with the relevant zoning plans.

The implementation of the electricity acts of individual states, including the NÖEWG, permits the expropriation of land under certain conditions.

In Lower Austria, the Lower Austrian Power Lines Act (Niederösterreichisches Starkstromwegegesetz) provides that the public authority shall, upon application of a third party, impose necessary restrictions on rights with respect to the land or other property rights in rem. This includes the expropriation of property for reasonable compensation if the construction of a power plant is in the public interest, if the construction of a production facility is required for technical or economic reasons, and if the project developer and the landowner or party with affected property rights are not able to reach an agreement and no other legal remedy under the Act, apart from expropriation, is available.

Expropriation may include granting an easement over the affected land; the assignment of ownership rights over the land; or the assignment, restriction or cancellation of other land rights or other rights linked to a specific property.

The construction and decommissioning of generating stations is delegated to the individual states. In Lower Austria, the Lower Austrian Electricity Act sets out that in decommissioning the generating station, the operator must take all necessary precautions to avoid danger or disturbance to the life or health of it and its neighbours or to the property of its neighbours. Furthermore, the operator must take precautions to protect the townscape.

Prior to decommissioning, the operator must notify the local authority and submit planned decommissioning procedures for the authority's decision. If the procedures are deemed insufficient or if the operator has not taken necessary precautions, the authority must provide these.

The decommissioning of a power plant is additionally provided for as a safety measure. In Lower Austria, for example, the NÖEWG provides that the authority may require the decommissioning of a power plant (either in full or in part) in the case of danger to the life or health of people, damage to property or harm to the other property rights of qualifying neighbours caused by the power plant, or to stop the unreasonable disturbance to neighbours.

Should the authority have reason to believe that such emergency measures are immediately necessary, following agreement with the generating facility operator, it may take such action without undertaking a full administrative procedure.

The principal laws that govern the construction and operation of transmission lines and associated facilities are:

  • the ElWOG and the relevant acts of the states (eg, NÖEWG);
  • the Electric Power Lines Act (Starkstromwegegesetz 1968), although this is only applicable for power lines which extend to two or more states; and
  • the UVPG.

The construction of transmission lines requires a construction and operating licence under the Electric Power Lines Act of the applicable state. For this reason, the licensing authority (the relevant state government) must evaluate the project, in particular the planned route, in consideration of other public interests.

For transmission lines with a rated voltage of at least 220kV and a length of at least 15km, as well as transmission lines in protected areas with a rated voltage of at least 110kV and a length of at least 20km, an environmental impact assessment is required as detailed in 4.1 Principal Laws Governing the Construction and Operation of Generation Facilities.

Furthermore, each year the transmission system operators have to submit a ten-year network development plan for the transmission system to the regulatory authority, based on the current situation and supply-and-demand forecasts. The purpose of the network development plan is in particular to provide market participants with information on which key transmission infrastructures need to be built or developed over the next decade, to list all investments which have already been decided, to identify new investments to be made over the next three years, and to set a timetable for all investment projects.

Authorisation of transmission line construction is an administrative act which requires an application containing details of the planned route. Approval for the construction of a transmission line is conditional on its being in the public interest to supply the population with electrical energy. It must connect with other existing or approved energy supply facilities, and must conform with land culture, forestry, spatial planning, nature and monument protection requirements, water management and water law, public transport as well as other public supply infrastructure, national defence, airspace security and employee protection requirements. The authorities appointed to safeguard such interests and the relevant public bodies have the right to make submissions in the preliminary proceedings insofar as they are affected by the transmission line project.

The operation of transmission systems in Austria requires authorisation from E-Control. This requires the fulfilment of conditions set out in the ElWOG, which include, in particular, the mandatory unbundling of entities involved in the activities of generation and supply, as well as compliance with provisions ensuring third party access to transmission infrastructure, non-discriminatory pricing and conditions of usage.

The terms and conditions imposed on approvals for the construction of transmission facilities are provided in the ElWOG. This sets out that the transmission system operator is committed to meeting the criteria in Section 40 of the ElWOG. These criteria are extensive, and include:

  • to operate and maintain the system safely, reliably, efficiently and with due regard to environmental protection;
  • to ensure the technical conditions required to operate the system;
  • to ensure the capacity of the network to meet a reasonable demand for transmission of electricity in the long term;
  • to operate, maintain and develop, under economic conditions and with due respect for the environment, secure, reliable and efficient transmission networks;
  • to ensure appropriate transmission capacity and reliability of the network to contribute to security of supply; and
  • to refrain from any discrimination against network users or categories of network users, in particular for the benefit of its affiliates.

These conditions are in addition to the EU network codes relevant to transmission as listed in 2.2 Imports and Exports of Electricity.

Under certain circumstances, an expropriation may be carried out if the construction of a transmission line is deemed to be in the public interest. The Lower Austria Power Lines Act, for example, sets out that if there are compelling technical reasons for a specific routing in Lower Austria, where relocation would be at a disproportionate cost, the authority may impose the expropriation for transmission lines including accessories such as substations, transformers and switchgear.

Expropriation may include the granting of immovable property; the assignment of land rights; or the assignment, restriction or cancellation of other real rights in immovable property and rights; the exercise of which is linked to a specific place.

The quantum of the compensation is determined on the basis of the estimate of at least one sworn and judicially certified expert in the expropriation decision or in a separate decision. In the latter case, a provisional guarantee amount is to be determined without further inquiries in the expropriation decision.

In Austria, property rights are constitutionally protected, which means that expropriation is only permissible for the public good and in line with the proportionality principle.

The ElWOG sets out an area monopoly for transmission services in Austria into three regional areas. The Vorarlberg area is legally covered by VKW-Netz AG, Tyrol is covered by TIWAG-Netz AG and the rest is covered by the Austrian Power Grid (APG) AG. Since 2011, APG has taken over operation of the Tyrolean transmission lines and since 2012 VKW-Netz AG has been co-operating with APG. As such, APG is the Austrian-wide control area manager.

The provision of transmission services is primarily governed by the ElWOG, whereby E-Control as regulator must determine the tariff according to the system usage charges regulation (Systemnutzungsentgelte-Verordnung). Regarding network access charges, the ElWOG entitles the transmission system operator to charge the costs incurred in the construction, operation and maintenance of the transmission system.

Pursuant to the ElWOG, transmission charges cover the costs incurred by a network operator for the operation and maintenance of the network. The ElWOG implements Directive 2009/72/EC which sets out the principles of non-discriminatory terms and tariffs for access and usage of the transmission network and of setting pre-approved tariffs. All network users connected to the transmission network are charged a fixed tariff for the transmission of electricity, set by E-Control, dependent on the voltage level.

Under the ElWOG, transmission network operators are obliged to grant network access to those entitled to network access according to the approved general conditions, subject to certain system-user charges. The ElWOG implements Directive 2009/72/EC which sets out the principle of non-discriminatory third-party access to transmission networks.

A network operator may refuse network access in whole or in part, only in the case of exceptional network conditions, in the case of a lack of network capacity, or if electrical energy from designated combined heat and power plants or from renewable energy installations would otherwise be displaced despite the current market prices, in effect prioritising the sale of this electricity to third parties.

Relevant legislation includes:

  • the ElWOG and effective state acts, such as NÖEWG;
  • the Electric Power Lines Act 1968 (Starkstromwegegesetz), which is only applicable for distribution lines that extend to two or more federal states; and
  • state acts such as the Lower Austria Power Lines Act.

The operation of a distribution network requires an electricity concession, which may be granted only if the concessionaire is able to ensure cost-effective, sufficient and secure distribution, and comply with regulatory obligations for the operation of electricity distribution, and provided that no concession has already been granted to operate a distribution network for the specified area.

The granting of the electricity concession also requires that the concessionaire (if this is an individual) should be self-employed, have reached the age of 24, have Austrian citizenship or be a citizen of another EU member state or EEA contracting state, have his or her principal place of residence in Austria or another EU member state or EEA contracting state, and should not be excluded from the exercise of the concession. If the concessionaire is a legal entity or a registered partnership, it should have its seat in Austria or another EU member state or EEA contracting state, and have appointed a manager or tenant for the exercise of the concession. In this case, the competent authority is the federal government.

The relevant legislation and processes for the construction of distribution lines are similar to those for transmission as detailed in 5.1.2 Regulatory Process for Obtaining Approvals to Construct and Operate Transmission Facilities.

The terms and conditions for the construction and operation of distribution networks are set out in the individual implementation acts of the states. In Lower Austria for example, the Lower Austria Power Lines Act provides that network operators are obliged to:

  • grant network access to third parties in a non-discriminatory manner, subject to approved general network conditions and tariffs;
  • operate and maintain the network in a safe, reliable and efficient way, taking into account environmental protection and providing all essential services;
  • expand the network they operate, in line with their needs, in order to ensure the long-term ability of the distribution network to meet the foreseeable demand for distribution; and
  • ensure the necessary technical conditions for the operation of the network are met.

Expropriation in the scenario of distribution networks is similar to that for transmission systems, as detailed in 5.1.4 Proponent's Eminent Domain, Condemnation or Expropriation Rights.

As with transmission systems, various area monopolies are set out across Austria. Lists of relevant areas are specified by the individual state laws. For example, the NÖEWG provides that a concession may only be granted if another concession has not already been granted for that particular area. Given these geographical restrictions, end customers cannot select a specific distribution system operation.

As for transmission systems, the provision of distribution services is primarily governed by the ElWOG, whereby E-Control as regulator determines the tariff according to the system usage charges regulation (Systemnutzungsentgelte-Verordnung). Regarding network access charges, the ElWOG entitles the distribution system operator to charge the costs incurred in the construction, operation and maintenance of the distribution system.

As for transmission systems, pursuant to the ElWOG, distribution charges cover the costs incurred by a network operator for the operation and maintenance of the network. Network users connected to the distribution network are charged a fixed tariff for the distribution of electricity, which is set by E-Control and dependent on the voltage level.

DLA Piper Weiss-Tessbach Rechtsanwälte GmbH

Schottenring 14
1010 Vienna
Austria

+43 1 531 78 1000

+43 1 533 52 52

Andreas.Gunst@dlapiper.com www.dlapiper.com
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DLA Piper Weiss-Tessbach Rechtsanwälte GmbH was founded in 1878 in Vienna and is the longest-established business law firm in Austria. It has been a fully integrated part of the global law firm DLA Piper since 2003 and provides its clients with legal and business solutions locally, regionally and internationally using integrated teams of lawyers with experience that spans a broad range of disciplines. DLA Piper Austria is widely recognised for its sector-specific approach to legal services including a top-of-the-market energy sector practice offering in-depth knowledge of all regulatory and operational, as well as transactional, legal aspects related to the energy sector in Austria and beyond. With a particular emphasis on renewables projects and electricity transmission and transport, the Austrian energy team regularly advises national and international players in the energy sector on all aspects of financing and operating energy infrastructure and energy transportation and distribution.

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