Austria’s energy system is characterised by a significant proportion of renewable energy sources. The generation of electricity is primarily accomplished through hydropower, wind power and photovoltaics. In 2023, the share of electricity generation from renewable sources amounted to 78% of the total electricity generation in Austria:

• hydropower – approximately 54%–67%;
• combined heat and power – approximately 16.6%;
• wind power – approximately 11.4%; and
• photovoltaics – approximately 8.7%.

In 2019, the Austrian federal government submitted a comprehensive plan to the EU Commission (“#mission2030”) outlining its strategy for achieving several climate protection targets by 2030. The primary objectives of this plan are to increase the share of energy from renewable energy sources in gross energy consumption and to ensure that 100% of the balanced electricity supply in Austria is met through renewable energy sources. Furthermore, Austria is committed to phasing out fossil fuels as soon as possible and to achieving climate neutrality by 2040.

Austria basically has two important sources of renewable energy: hydropower and biofuel. They currently provide the largest share of domestic energy production (approximately 87.6%).

Austria operates one of the most advanced hydropower systems in Europe, with more than 3,200 active plants currently in operation. The Austrian #mission2030, however, includes an ambitious target to increase hydropower output by an additional 5 TWh by 2030, with another 2.5 TWh planned by 2040. To support this expansion, several new projects are under development. These include the construction of high-head and run-of-the-river plants in Alpine regions, with project planning often supported by regional utilities and municipal energy providers. Currently, one of the most important projects is the Limberg III pumped storage power plant in Salzburg, which will provide an additional capacity of around 480 MW and is expected to be in operation by 2026.

In addition, feasibility studies and environmental assessments are ongoing regarding further developments in Tyrol and Styria, targeting both capacity upgrades and new installations. These projects are expected to be supported by the Austrian Climate and Energy Fund, in co-operation with the European Investment Bank, particularly in terms of financing and sustainability evaluation.

However, the energy production from other renewable energy sources – eg, heat from heat pumps and the production of energy from wind and solar power – is increasing significantly. Wind power, for example, has made huge progress compared to hydropower and now already contributes 11.4% to annual electricity generation. Photovoltaic capacity is also increasing rapidly and still offers enormous development potential. Accordingly, as part of #mission2030, the Austrian federal government has set a target of increasing photovoltaic capacity by 11 TWh by 2030.

Austria’s renewable energy market has continued to grow over the past year, with momentum especially strong in solar and wind energy. Hydropower remains the backbone of the country’s electricity mix, but recent developments have focused on broadening the energy portfolio and integrating new technologies.

Thus, solar power has seen significant expansion, with record levels of new photovoltaic capacity installed in 2024. This growth has been driven by increased public and private investment, favourable support schemes and regulatory adjustments. Rooftop photovoltaic systems are becoming more common among households and businesses, while larger-scale installations are gaining ground thanks to investment incentives and simplified planning rules.

Wind power is also expanding, but at a slower pace, due to lengthy permitting procedures in Austria.

Energy communities are also becoming increasingly popular, enabling citizens and local companies to take part in the generation and use of energy from renewable resources.

Austria continues to implement the ambitious targets set out in its #mission2023. These are supported by the Austrian Renewable Energy Expansion Act (Erneuerbaren-Ausbau-Gesetz – EAG), which provides not only financial support for electricity generation but also incentives for green hydrogen and industrial decarbonisation. However, grid capacity is becoming a growing concern, with some regions facing bottlenecks due to the rapid pace of solar development. Authorities are now considering more flexible grid connection models to address this.

On an international level, Austria has improved its electricity connections with neighbouring countries. This has increased cross-border energy flow and grid stability. Austria is also participating in European hydrogen infrastructure initiatives, with plans to become a key transit and storage location in the emerging hydrogen network.

Austria’s energy regime is based on a combination of general energy legislation, renewable-specific laws and administrative and planning frameworks. The Austrian Electricity Industry and Organisation Act (Elektrizitätswirtschafts- und -organisationsgesetz – ElWOG) basically governs electricity generation, grid access and market structure supply rules. The Austrian Gas Act (Gaswirtschaftsgesetz – GWG) is the primary legislation for the Austrian gas market. In addition, the Austrian Pipeline Act (Rohrleitunsgesetz) regulates the planning, construction and operational safety of pipelines used for the transport of gases and liquids. This law ensures the secure and efficient transport of energy carriers across Austria, including cross-border pipelines.

The funding of renewable energies is mainly regulated by the EAG. It grants investment aids and market premiums. However, there are still installations for the generation of renewable energy that are subsidised in accordance with the provisions of the Austrian Green Electricity Act 2012 (Ökostromgesetz 2012 – ÖSG).

Permitting and environmental requirements are addressed in particular by the Austrian Environmental Impact Assessment Act (Umweltverträglichkeitsprüfungsgesetz – UVP-G), the Austrian Water Act (Wasserrechtsgesetz – WRG), the Austrian Trade Act (Gewerbeordnung – GewO), the Nature Preservation Acts of the Austrian Federal States and the spatial planning regulations of the Austrian Federal States.

In July 2025, the Austrian government introduced a new draft Electricity Industry Act (Elektrizitätswirtschaftsgesetz – ElWG), which will fully replace the ElWOG. Core elements of the draft ElWG include:

• introduction of dynamic tariffs, along with a new social tariff for vulnerable consumers;
• restructuring of grid charges and the introduction of new network connection fees;
• exemptions from grid usage charges for system-supportive energy storage for a 20-year period;
• legal recognition of peer-to-peer electricity trading, direct transmission lines and broader rights for energy communities; and
• a regulatory framework for battery and storage systems, treating them either as suppliers or consumers depending on their function.

The ElWG is expected to be enacted by the end of 2025, followed by adjustments to the EAG to ensure legal and operational consistency.

The primary regulator for energy undertakings in Austria is E-Control Austria (“E-Control”), an independent body that supervises electricity and gas markets. E-Control has broad enforcement powers, including the right to request information from energy undertakings, conduct audits, issue binding rulings and impose administrative penalties.

In turn, regional authorities handle permitting and land-use approvals for renewable energy projects.

In Austria, the generation, distribution, supply and trading of electricity and gas are regulated. Exercising these activities typically requires a permit and/or notification in accordance with the provisions of the ElWOG, GWG or GewO; grid access rules, technical standards and safety obligations also apply.

Renewable energy sources may also be subject to specific regulation depending on the technology – eg:

• hydropower plants require water use rights and comprehensive environmental impact assessments (if the relevant threshold values according to the UVP-G are met);
• wind power plants require environmental impact assessments (if the relevant threshold values according to the UVP-G are met) and must comply with spatial planning regulations;
• solar projects must comply with spatial building regulations; and
• biomass and biogas plants are subject to environmental and emissions standards.

In general, permits for plants or the generation of energy from renewable energy sources basically have an effect in rem – ie, they stick to the plant and are not affected by a change in ownership. This means that a purchaser of a plant can rely on plant permits that have already been granted if the actual power of disposition – ie, the ability to determine what happens at the plant – is also transferred to the purchaser.

There are no general restrictions on the ownership or transfer of renewable energy assets in Austria. Thus, domestic and foreign investors may acquire, develop and operate such assets. However, changes in control of energy undertakings must be reported to E-Control and may require regulatory review, particularly if they affect grid operation or market dominance. Furthermore, the acquisition of renewable energy assets by non-EU investors may require approval under the Austrian Investment Control Act (Investitionskontrollgesetz – InvKG) if the assets are part of a critical energy infrastructure.

Austria maintains an open approach to market access in the renewable energy sector. Thus, foreign investors face no sector-specific ownership limitations. Nonetheless, investments in critical energy infrastructure (eg, large-scale renewable energy projects) may be subject to review under the InvKG. This review focuses on national security concerns and may apply to non-EU investors.

Foreign companies must comply with all Austrian legal requirements, including licensing and technical regulations. In some cases, a local establishment or partnership with Austrian stakeholders may be beneficial for project execution.

In Austria, electricity generation from renewable sources is shaped by a liberalised market model with regulated grid access. The main players include private and public utilities, independent power producers, municipal energy suppliers and energy communities.

Large-scale hydropower is still the dominant renewable source, though solar and wind have grown rapidly due to the support schemes of the EAG, which provides investment incentives, market premiums and auction procedures. The ElWOG – and, going forward, the new ElWG – governs grid access, licensing and market integration.

The production of renewable gas – such as biomethane or other biogas – is a growing sector supported under the EAG. Producers must meet technical standards to inject renewable gas into the public grid.

The GWG regulates grid connection, quality standards and market access. Gas grid operators are obligated to connect producers under regulated conditions, provided injection criteria are met. The number of biomethane feed-in projects is steadily increasing, particularly in agricultural and waste water treatment contexts.

Renewable heat production – particularly through biomass, solar, thermal and geothermal – plays a central role in Austria’s decarbonisation strategy. Large-scale district heating systems are operated by municipalities or private companies. Geothermal and biomass projects are regulated under the GewO as well as local building and environmental laws. The EAG includes limited support for renewable heating through investment grants, though heat is less comprehensively regulated compared to electricity.

Austria’s hydrogen sector is in early development. The EAG provides a basis for supporting electrolysis projects powered by renewable electricity. The production and use of green hydrogen are addressed in Austria’s Hydrogen Strategy, though a detailed regulatory framework is still emerging. Biofuels are governed by the Austrian Fuel Ordinance (Kraftstoffverordnung), with sustainability criteria tied to EU Directives. Key stakeholders include industrial producers, research consortia, energy suppliers investing in pilot projects, and cross-border initiatives.

Small-scale renewable generation – such as rooftop photovoltaic systems – is facilitated through simplified connection procedures and investment grants under the EAG. For systems below certain capacity thresholds, approvals are minimal and largely technical. Surplus electricity can be self-consumed, stored or sold under feed-in arrangements or net metering. The rise of renewable energy communities enables collective ownership and local sharing of electricity. These communities are also exempted from certain grid charges and may receive priority connection.

Electricity transportation from renewable sources in Austria is carried out through a liberalised system with a single transmission system operator (TSO), Austrian Power Grid AG (APG), and multiple regional distribution system operators (DSOs). Grid infrastructure is regulated by the ElWOG as well as by the Electricity Acts of the Austrian federal states and (moving forward) by the new ElWG.

Producers of electricity from renewable energy sources basically have guaranteed non-discriminatory access to the grid.

Storage systems (such as battery installations) are increasingly integrated at both the transmission and distribution level. The new ElWG introduces a regulatory framework for grid-connected battery storage, distinguishing between market-oriented storage and system-supportive facilities. Storage operators are granted legal recognition and may be eligible for exemptions from certain grid charges if their systems relieve congestion or enhance flexibility.

Austria addresses intermittency and congestion through grid planning, market-based re-dispatch mechanisms and financial support for smart grids. Both voluntary and forced curtailments are possible in high-load areas, governed by grid codes and supervised by E-Control.

The ElWG introduces incentives for flexibility, including time-variable tariffs and new roles for aggregators. Standard contracts for flexibility and demand-side response are under development, particularly in connection with energy communities and smart metering. Off-grid renewable supply remains limited to remote applications, though direct lines and peer-to-peer arrangements will gain legal clarity under the new ElWG.

The transportation and storage of renewable gas (eg, biomethane) follows the framework set out in the GWG and the Rohrleitungsgesetz. Producers must meet technical specifications for injection into the public gas grid. Grid operators are obliged to accept grid-compliant biogas, subject to capacity. While there are no binding admixture quotas, the EAG and national climate strategies encourage increased renewable gas share.

Storage is managed through commercial gas storage operators, with renewable gas being handled identically to fossil methane once injected.

District heating systems are commonly used in Austria, and are often operated by municipalities or utilities. The regulatory framework varies by Austrian federal state but is basically based on local building, planning and energy laws.

There is no unified national heat grid regulation. Renewable heat sources such as biomass and geothermal are integrated directly into these networks, either as base load or in combination with fossil back-up. Long-term thermal storage (eg, water tanks) is increasingly used to balance seasonal variations.

Austria’s hydrogen and biofuels infrastructure is still developing. Hydrogen transport currently occurs via trailers or dedicated on-site pipelines in industrial zones. There is no nationwide hydrogen grid yet, but regulatory preparation is ongoing under Austria’s Hydrogen Strategy. Pilot projects are testing blending hydrogen into the existing gas grid. The transportation of liquid biofuels is governed by EU-compliant sustainability and safety standards.

The Kraftstoffverordnung regulates biofuel distribution, while private actors – mostly industrial and logistics companies – manage the infrastructure for supply and storage.

The Austrian electricity market is fully liberalised, allowing both large and small suppliers to trade and sell electricity (including that from renewable sources) to end users.

Traders who do not generate or transmit electricity (eg, physical grid usage) must obtain a trade licence under the GewO. To qualify, the company must have at least a branch office in Austria and appoint a trade representative (gewerberechtlicher Geschäftsführer).

Trading occurs on wholesale markets such as EXAA and EPEX Spot, as well as through bilateral agreements.

In order to supply electricity, traders must be part of a balance group, which grants access to the grid and allows electricity delivery to customers. Each balance group is managed by a Balance Group Responsible Party (BGRP). To join the balancing system, traders can either:

• become a licensed BGRP and form a new balance group; or
• join an existing balance group.

While joining an existing group is simpler and cheaper, it creates dependency and may expose business data.

Renewable electricity is either sold under market premiums governed by the EAG or via direct marketing and power purchase agreements (PPAs). Supply contracts must comply with consumer protection and transparency requirements set out in the ElWOG or its future replacement, the ElWG.

Similar to electricity, the gas market is also liberalised. Renewable gas – such as upgraded biogas or biomethane – is traded like fossil natural gas once injected into the grid. It can be sold on the wholesale market or directly to end users via supply contracts.

In order to supply gas, shippers/traders must be part of a balance group, which grants access to the grid and allows gas delivery to customers. Each balance group is managed by a BGRP. To join the balancing system, companies can either:

• become a licensed BGRP and form a new balance group; or
• join an existing balance group.

While joining an existing group is simpler and cheaper, it creates dependency and may expose business data.

Trading is governed by the GWG, with grid access and quality standards applying equally to renewable and conventional gas. Guarantees of origin (GoOs) may be issued to verify the renewable nature of the gas, especially for customers seeking climate-neutral energy solutions.

The heat market is mostly local and non-liberalised. Renewable heat is usually supplied through municipal or regional district heating networks. The operators act both as producers and as suppliers, often under regulated tariffs.

Contracts for heat delivery are typically standardised and governed by regional energy and building laws. Users generally do not have the option to switch suppliers unless multiple networks are present, which is rare.

Hydrogen and biofuels are primarily traded through bilateral agreements with industrial and transport sector buyers. There is no established wholesale market yet for green hydrogen, though pilot projects and platforms are emerging.

Supply contracts are bespoke and reflect technical parameters, sustainability, certification and price volatility. Biofuels are regulated under the Kraftstoffverordnung; producers must demonstrate compliance with environmental and quality standards.

GoOs are issued and managed by E-Control, verifying the renewable source of electricity. These certificates are used for disclosure purposes and are traded separately from physical electricity. GoOs are particularly important for suppliers offering green tariffs and for companies pursuing ESG goals.

Corporate power purchase agreements (PPAs) are increasingly common in Austria, especially for solar and wind projects without fixed subsidies. PPAs may be physical or financial. Key features include fixed or indexed pricing, volume profiles, balancing responsibilities and termination clauses. Although still relatively young in the Austrian market, PPAs are expected to grow under the new ElWG and with rising demand for corporate decarbonisation.

Austria has a mature onshore renewable energy market, especially in hydropower, wind and solar. Projects vary from small rooftop photovoltaic systems to utility-scale wind farms. Key parties involved include project developers, investors, equipment suppliers, construction contractors, municipalities and grid operators. EPC and O&M contracts are standard; for larger projects, modular contracting is also used.

Legal development starts with securing land rights – often via lease or purchase agreements. Depending on size and impact, projects may require permits under the UVP-G, the Building Code and sector-specific laws such as the GWG, ElWOG or the future ElWG. Construction is governed by national technical standards and regional planning laws. No central tendering regime exists, though public funding and zoning constraints often limit location options. Community participation is encouraged through the model of renewable energy communities regulated under the EAG, which can co-develop and co-own projects with citizens and municipalities.

This is not applicable; Austria is a landlocked country with no offshore renewable energy market.

Project financing in Austria relies on a stable legal environment and well-tested contractual structures. Financing is typically non-recourse, with lenders relying on long-term PPAs or market premiums under the EAG. Legal considerations include permitting risks, grid connection delays, land-use restrictions and regulatory changes, particularly in the transition from the ElWOG to the ElWG.

Security interests are governed by Austrian civil law, and step-in rights for lenders are usually secured through direct agreements. While renewable projects are not subject to special financing restrictions, compliance with EU state aid and ESG standards is essential.

The central support instrument is the EAG, which provides market premiums, investment grants and one-stop-shop application procedures. Funding is allocated via technology-specific tenders (for wind, photovoltaic, biomass, etc), with smaller projects being eligible for administratively set tariffs. At the regional level, additional grants may be available for building-integrated photovoltaic or biomass heating. Austria’s corporate tax regime offers standard depreciation, with accelerated options available for some green investments. VAT exemptions or deductions can apply to small self-consumption installations.

Decommissioning obligations are generally addressed in permitting decisions under the UVP-G, building laws or sector-specific energy laws. Developers must restore the site to its original condition or a state agreed in the permit. This includes dismantling structures, removing foundations where required, and restoring landscape or agricultural use. Some provinces or permitting authorities require financial security (such as bonds or escrow accounts) to ensure that decommissioning is carried out. For small-scale photovoltaic or biomass systems, obligations are lighter and may follow general waste disposal rules under environmental legislation.

As discussed under 1.1 Energy Transition, Austria aims to achieve a 100% renewable electricity supply by 2030. Electricity demand in Austria will rise steadily through 2050, in line with its national climate goals and the broader EU climate neutrality agenda. Austria aims to meet this demand primarily through renewable sources; a strong foundation is already in place thanks to its extensive use of hydropower, which currently accounts for over 60% of the country’s electricity generation. However, with limited further expansion potential in hydropower, the focus has shifted towards scaling up solar and wind power capacities, as well as advancing biomass and biogas technologies.

Geothermal energy is also being explored in select regions, while hydrogen is gaining strategic importance. Austria’s Hydrogen Strategy prioritises the development of green hydrogen for use in industry, transport and electricity balancing, positioning the country as a future hub in the European hydrogen economy.

Biogas and biomethane are expected to play a significant role in the energy mix and to decrease Austria’s import dependency on natural gas. Therefore, low-carbon emission gases are promoted, with various measures to support their increase.