Framework conditions

Macroeconomic environment ¹⁾

In economic terms, the 2023/2024 fiscal year (1 October 2023 to 30 September 2024) of Energie AG Oberösterreich (Energie AG) was characterised by an economic recession due to weak consumer and investment demand and a drop in export demand, accompanied by high interest rates.

Economic growth and inflation

YoY real change (in %)
Sources: IHS, IMF, WIFO

The Institute for Advanced Studies (IHS), the Institute of Economic Research (WIFO) and the International Monetary Fund (IMF) anticipate moderate economic growth of +0.7% or +0.8% (previous year: +0.4%) in the euro zone for the year 2024.

The IMF and Austria’s economic institutes IHS and WIFO anticipate a slight recession in the Austrian economy in the range of -0.6% for the 2024 calendar year. This means that the Austrian economy is in a slight recession for the second year in a row (previous year: -0.9 %). It is not just the drop in investments and the slow demand for capital goods and machinery which are contributing to stagnation in economic development, but also the continuing low levels of exports. Additionally, exports of goods to Germany also fell significantly in 2024. The inflation rate is expected to fall faster this calendar year than forecast by the economic institutes in the first six months of the 2023/2024 fiscal year, dropping to 3.0% (previous year: 7.8%).

In the Czech Republic market relevant to Energie AG, an increase in economic output in the order of +1.1% is anticipated for the 2024 calendar year (previous year: -0.1%); this figure will be above average for the entire euro zone.

Energy and climate policy environment

In the first six months of the reporting period, the EU’s energy policy was again largely characterised by attempts to cushion energy prices as well as by measures to reduce dependency on energy imports in the context of Russia’s war of aggression against Ukraine.

At EU level, a comprehensive amendment to the existing Renewable Energy Directive (RED III) came into force on 20 November 2023. It raises targets for the expansion of renewables in the EU from 32.0% to 42.5% by 2030.

The “COP 28” climate conference took place in Dubai from 30 November 2023 to 13 December 2023. The central result of COP 28 is an agreement of the global community calling for a “transition away from fossil fuels in energy systems”. The text of the resolution also envisages tripling the capacity of renewable energies by 2030 while doubling the pace of energy efficiency activities during this period.

In the field of climate policy, the EU Commission presented an interim greenhouse gas (GHG) target in February 2024, with a view to achieving climate neutrality by 2050. The intent is to reduce GHG emissions by 90.0% compared with 1990 by the year 2040.

Two years after the REPowerEU package, the EU Commission assessed the progress in renewable energies (RE) growth; on 15 May 2024, it published guidelines with a view to further accelerating approval procedures for the expansion of renewables in the EU, designating RE acceleration areas and optimising the design of the RE tender.

The revised Building Efficiency Directive formally came into force on 28 May 2024 and is intended to contribute to a CO₂ reduction in the building sector in line with the Green Deal. The European legislative procedure on a reform of the future European electricity market design came into force on 16 July 2024, necessitating national implementation by 17 July 2026. The subjects of the amendment included the Internal Electricity Market Regulation and the Internal Electricity Market Directive.

The “Corporate Sustainability Due Diligence Directive” (CSDDD) came into effect on 25 July 2024 and must be implemented in national law by all member states on or before 26 July 2026. This directive anchors human rights interests and environmental aspects in the global value chains of businesses.

Following the formal publication of the EU gas package in the Official Journal of the EU, the Directive on Internal Markets for Renewable and Natural Gases and Hydrogens came into force on 4 August 2024 and will apply as of 5 February 2025. The Member States have until 5 August 2026 to implement the directive in national law.

The Methane Emissions Regulation came into force on 4 August 2024 with a view to reducing methane emissions in the energy sector. This is the first time that binding regulations regarding the avoidance or reduction of methane emissions have applied in the EU. What it means, for example, is that gas infrastructure operators must systematically record their methane emissions or develop a programme for detecting and eliminating leaks.

The EU Nature Restoration Law came into force on 18 August 2024. It seeks to ensure that restoration measures are extended to cover at least 20.0% of EU territory by 2030 and all ecosystems in need of restoration by 2050. With regard to the objective of restoring 25,000 kilometres of free-flowing rivers, which is relevant for hydroelectric power, restrictions on electricity generation must also be expected in the future.

In view of the persisting uncertainties relating to the supply of natural gas from Russia to Austria, an amendment to the Gas Industry Act (GWG) and the Electricity Industry and Organisation Act (ElWOG) was passed by the National Council plenary session in October 2023. The aim here is to extend the period of validity of Austria’s strategic gas reserve until 1 April 2026 and to ensure that gas reserves are in place for both protected customers and for electricity generated from natural gas.

Two amendments to the Renewable Energy Expansion Act (EAG) in December 2023 and March 2024 govern tax exemptions as investment incentives for photovoltaic (PV) systems and a suspension of subsidy costs for renewables in the year 2024. In addition to this, an amendment to the Emissions Certificate Act in December 2023 led to the legal implementation of the revised Emissions Trading Directive.

In December 2023, the Electricity Cost Subsidy Act, due to expire on 30 June 2024, was extended by six months to the end of 2024. The upper relief limit was adjusted due to the fall in electricity prices. The regulation governing this was published on 28 May 2024.

The Federal Act on the Energy Crisis Contribution - Electricity, which is based on the EU Emergency Regulation on Revenue Skimming and which expired at the end of 2023, was extended by one year in February 2024 by a resolution of parliament, while the amounts deductible for investments in the energy transition were extended.

The Renewable Heat Act came into force at the end of February 2024. The resulting legal ban on installation applies to all fossil fuel heating systems in new buildings. The ordinances accompanying the Renewable Energy Expansion Act (EAG) on the allocation of market premiums up to the end of 2025, and on investment grants for 2024, were passed in March 2024.

The newly created Austrian Grid Infrastructure Plan (ÖNIP) was published on 8 April 2024 illustrating Austria’s requirements for electricity generated from renewable energies and scenarios for future energy consumption up to the year 2040. The required transport capacity in the electricity and gas sector, including an emerging hydrogen infrastructure, are derived from this. ÖNIP contributes to accelerating approval procedures and was the subject of a strategic environmental assessment (SEA).

The Investment Subsidies Ordinance–Gas implementing the Renewable Energy Expansion Act (EAG) was published in Austria’s Federal Law Gazette (BGBl.) on 17 June 2024; it provides for EUR 40.0 million in investment grants for the construction of plants (newly built and conversions) for converting renewable electricity into renewable hydrogen or synthetic gases for 2024.

The federal law for the financing of the WAG (West Austrian gas pipeline) sub-loop infrastructure project published on 22 July 2024 provides for federal funding of up to EUR 70.0 million. The aim of the project is to reduce the dependency of Austria’s gas supply on natural gas imported from Russia by expanding transport capacities in west-to-east bound operations by constructing a parallel hydrogen-compatible pipeline section of the West Austria gas pipeline between Oberkappel and Bad Leonfelden.

Austria’s Council of Ministers adopted the Austrian Carbon Management Strategy (CMS) on 26 June 2024. The central topic is the approval of geological storage of difficult to unavoidable CO₂ emissions on Austrian federal territory in “hard-to-abate” sectors such as waste incineration.

The Renewable Gas Act (EGG), which envisages a mandatory green gas quota for suppliers, failed to achieve a two-thirds majority in the National Council plenary session in June 2024. Those parts of the act which did not require a two-thirds majority were passed on to the Federal Council, which referred the incomplete EGG back to the National Council.

The Hydrogen Promotion Act published in Austria’ Federal Law Gazette on 4 July 2024 describes the legal basis for funding the construction and operation of plants for the production of renewable hydrogen of non-biogenic origin in Austria. The introduction of a competitive bidding mechanism means that federal funds totalling EUR 820.0 million will be made available in the years 2024 to 2026 in the form of a fixed premium as a surcharge per unit of renewable hydrogen produced. In addition to this, the Investment Subsidies Ordinance–Hydrogen implementing the Renewable Energy Expansion Act (EAG) was submitted for review with a deadline of 9 July 2024.

A further amendment to the Gas Industry Act 2011, the Gas Diversification Act 2022 and the Energy Steering Act 2012 requires gas suppliers with more than 20,000 metering points to draw up security of supply strategies.

On 6 July 2024, the Federal Act for the mitigation of the consequences of crises and for the improvement of market conditions in markets dominated by specific energy suppliers entered into force in the form of the Crisis Consequences Act. Following the German model, this introduced a reversal of the burden of proof to the detriment of the energy supply companies.

The National Energy and Climate Plan (NEKP) illustrates how legally binding targets are to be achieved by 2030. It was submitted to the European Commission by the Federal Ministry for Climate Action, Environment, Energy, Mobility, Innovation and Technology on 20 August 2024. The NEKP stipulates that Austria must reduce its climate-damaging emissions by 48.0% in the NON-ETS sectors (buildings, transport, agriculture, waste management and small industrial plants) by 2030.

The Upper Austrian Nature and Landscape Conservation Act was amended. Requirements from RED-III were adopted, while some adjustments relating to practical requirements were made. Among other things, it confirms the legality under nature conservation law of critical infrastructure projects completed before 1983 for which permits or declarations would have been required.