Latest news with #E-Control
Euractiv
3 days ago
- Business
- Euractiv
Why are Europe's electricity bills so high? Austria has the answer
With Austrian energy companies refusing to compete with one another, consumers at the mercy of their local hegemons are left paying higher bills than they should – a problem mirrored across Europe. When energy prices in Russian-gas-addicted Austria surged – and Vienna's main utility company almost went bust – the government ordered the competition authority and energy regulator to examine the sector. Two years on, their final report paints a damning picture of an energy market frozen in time. 'After 24 years of liberalisation, there is still no functioning national competitive market,' said Natalie Harsdorf, head of Austria's competition authority, the BWB. Instead of utilities competing nationwide for the business of Austria's millions of households, firms have carved out regional fiefdoms – or as Harsdorf put it, 'we have regional companies that dominate the markets'. Austria has one of Europe lowest contract-switching rates – a key indicator used to gauge market competitiveness – at just 4.5%. A typical new supply contract is currently around 10% more expensive than in neighbouring Germany. The investigation revealed a retail electricity market riddled with 'countless cross-shareholdings between companies'. What that means is that each regional utility owns stakes in others. 'The question arises: do these companies even want to participate in Austria-wide competition?' said Wolfgang Urbantschitsch, head of the country's energy regulator, E-Control. Vienna's main utility firm owns 28% of Lower Austria's EVN, which in turns holds an indirect 36% stake in Burgenland's primary energy provider. Most utilities also own shares in Austria's main power producer, Verbund. So why compete? 'It seems that they do not need to,' Urbantschitsch concluded. The situation has grown so dire that Austria is pioneering a new set of antitrust laws aimed at curbing the dominance of major energy suppliers. Introduced in 2024, the legislation compels firms to match consumer-friendly terms offered elsewhere – or explain why they don't. 'The BWB is now focusing on individual investigations,' Harsdorf said. Europe in trouble Austria is far from alone. Two major indicators suggest the entire EU is struggling to foster real competition for retail electricity consumers. Just 7.15% of European household consumers switched suppliers in 2023, according to market data from the Council of European Energy Regulators (CEER) and EU watchdog ACER. And for all of Austria's flaws, eight countries – including Romania, Slovakia, Poland and Luxembourg – fare even worse. The problem: dominant utilities tend to hold onto consumers. Once switching rates drop below 10%, regulators say 73% of households are locked into a dominant supplier. The Herfindahl-Hirschman Index (HHI), a common measure of market concentration, tells a similar story. In 2023, just five EU countries were in the 'green' – indicating a competitive, unproblematic market. Nine others – among them Belgium, Poland, Italy and Spain – were in the 'orange' zone, showing signs of worrying concentration. A further nine countries were flagged 'red', where one or very few utilities dominate the retail market – leaving consumers vulnerable without firm regulatory intervention. Too often, that oversight is lacking – and Germany offers a cautionary tale. In 2023, local grid operators saw a staggering 20.2% return on investment, an investigation by think tank BNE found. 'If network operators can achieve such returns, then something is fundamentally wrong with the regulatory framework,' said its CEO, Robert Busch. While firms with state-backed monopolies should normally be afforded returns upwards of 5%, in some extreme cases – like EWE – profits surged to 50% on capital, BNE said. (rh, aw)
Observer
12-05-2025
- Business
- Observer
Austria's regulator calls for ‘greater market responsibility' as PV boom reshapes energy systems
MUSCAT: Austria's top energy regulator has warned that the surge in solar photovoltaic (PV) installations, while vital to the energy transition, is straining electricity markets and grid infrastructure — calling for urgent reforms to ensure producers assume greater market responsibility. Speaking at the 22nd Annual Conference of the Energy Regulators Regional Association (ERRA), held in Muscat, Harald Proidl, Director of Renewables and Energy Efficiency at Austria's E-Control, said the country's PV boom has reshaped both generation capacity and regulatory oversight. 'In Austria, PV is no longer a marginal player — it accounts for around 25% of total installed capacity,' Proidl told the gathering of regulators and policy experts. 'But this growth has come with challenges: oversupply, negative pricing and grid instability.' Between 2020 and 2024, Austria tripled its PV installations from 150,000 to 500,000 systems, raising installed capacity from 2 GW to 8.4 GW. This was spurred by billions of euros in public subsidies, rising energy prices and concerns over energy security. But Proidl warned that while subsidies have helped scale deployment, many PV owners do not face balancing obligations. 'They can export excess energy to the grid without taking on system responsibility,' he said. 'This is not sustainable.' Austria recently raised network tariffs by 25% — partly due to PV-related costs — and is expanding energy-sharing models to decentralise consumption. 'We now have over 1,650 energy communities with 30,000 participants. We expect that to double by 2025,' Proidl noted. Despite these innovations, only 30% of PV power is self-consumed in Austria. The rest is injected into the grid, often creating localised oversupply and price volatility. 'Ideally, 100% of PV electricity should be used where it is produced,' he added. E-Control is urging policy shifts to reduce reliance on grid exports, expand incentives for local use; and apply smarter pricing and digital tools.
