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ECONOMY

Is Austria set for a gas price hike – and what can you do to avoid it?

E-Control, Austria's energy regulator, says they "hope" energy prices will be on their way to normal by next winter but that saving energy "is the order of the day".

gas energy, Spain
Austria has reduced its reliance on Russian energy in recent months. (Photo: Magnascan / Pixabay)

This week, Austria activated a “gas alert” as part of its emergency plan to ensure gas supply for the country over fears that Russia would cut off supplies if Western countries refused to make payments in rubles.

This Friday, Austria’s chancellor Karl Nehammer (ÖVP) said that the country’s gas importer OV has not received any documents on a contract change regarding the currencies, Krone reported. 

Nehammer added that the Austrian company has contracts with Russian Gazprom valid until 2024 and specifically stating payments would be made in euros and dollars. He described the Kremlin’s demand that gas be paid in rubles as a “political announcement.”

Still, Austria is currently on the first stage of a gas alert, according to an announcement made this week by the Federal Government’s Crisis Cabinet together with E-Control, the country’s energy regulator.

The Local spoke with representatives of the energy authority to understand more about the gas supply situation in Austria and the perspectives for the future.

Though the regulator reiterates that “households fall under the so-called protected customers and do not have to expect any rationing of gas consumption”, they also reinforce that every individual can help reduce gas consumption and that saving energy, overall, is the “order of the day”.

What is the “gas alert” emergency plan?

The early warning stage means that the surveillance and monitoring system that has been in place for weeks “will be tightened even further”, E-Control says.

The authority and the Austrian Gas Grid Management (AGGM), two institutions responsible for the gas market in the country, will deliver daily reports to the Climate Protection Ministry and the Federal Government.

READ ALSO: Ukraine: What does the government’s ‘gas alert’ mean for Austria?

There are three stages in the emergency plan. Only the third one contains the possibility of adopting energy control measures such as rationing. Even so, they do not target households but industries instead, E-Control confirmed.

What is the current situation regarding gas supply in Austria?

The gas regulator stated that there is currently a full and regular supply of natural gas from Russia, both via Ukraine and other transport routes.

The storage level is also low but not at an abnormal level for this time of the year. Therefore, even if there is a restriction or stoppage of incoming gas, that would not necessarily cause a supply problem in the country.

The country has also used less gas than in years before, with consumption in February 2022 5.3% lower than the same month in 2021, primarily due to warmer weather for the month, according to E-Control data.

What happens next winter?

“We hope that the war in Ukraine will be over by then and that gas prices will have returned to a more or less normal level so that households will not have to fear gas price increases”, according to the Austrian energy authority.

READ ALSO: EXPLAINED: Why are fuel prices increasing faster in Austria than elsewhere in the EU?

At the same time, spring is traditionally the period for refilling gas storage supply, especially after a law was passed requiring a strategic gas reserve large enough to cover gas consumption for a cold January month, E-Control explains.

“The challenge, however, is to obtain a corresponding amount of gas at reasonable prices for filling the storage facilities. Alternatives are still being worked on”.

The supply is not at risk for this cold season. Still, Austria’s energy controller said that national and European measures must be taken to support the tank filling in the coming months.

One of the alternatives includes buying liquified natural gas (LNG) that can also be used for industrial processes and heating – LNG arriving to ship terminals in Italy could be transported to the landlocked country via pipelines.

Another alternative could be buying natural gas from other producers, such as Norway.

What can private consumers do right now?

“Every individual can help to reduce gas consumption”, E-Control said.

“Saving energy is the order of the day not only at the moment but for climate protection reasons in general”.

The energy specialist highlighted that there are several ways to reduce gas consumption without sacrificing comfort. For example, lowering the room temperatures by just one degree means saving six per cent.

E-Control explains that saving energy is done in two ways: by changing habits and using modern technologies. Simply swapping old light bulbs for LED lights, for example, can bring enormous savings, which can help cut costs as energy prices continue high worldwide.

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EUROPEAN UNION

EU court rejects Austria case against Hungary nuclear plant

The EU's second highest court on Wednesday rejected a complaint by Austria against a European Commission decision to approve the expansion of a nuclear plant in neighbouring Hungary with Russian aid.

EU court rejects Austria case against Hungary nuclear plant

Staunchly anti-nuclear Austria lodged the legal complaint in 2018 after the European Union’s executive arm allowed the expansion of the Paks nuclear plant outside the Hungarian capital Budapest with a 10-billion-euro ($12.4 billion) Russian loan.

The plant is Hungary’s only nuclear facility and supplies around 40 percent of its electricity needs.

In its decision the commission judged that the project met EU rules on state aid, but Austria disputed this.

The General Court of the EU ruled Wednesday that “member states are free to determine the composition of their own energy mix and that the Commission cannot require that state financing be allocated to alternative energy sources.”

READ ALSO: Why is Austria so anti nuclear power? 

Hungary aims to have two new reactors enter service by 2030, more than doubling the plant’s current capacity with the 12.5-billion-euro construction. The Paks plant was built with Soviet-era technology in the 1980s during Hungary’s communist period. 

The construction of two new reactors is part of a 2014 deal struck between Hungary’s right-wing Prime Minister Victor Orban and Russian President Vladimir Putin. The work is carried out by Moscow’s state-owned nuclear agency Rosatom.

The details of the deal have been classified for 30 years for “national security reasons” with critics alleging this could conceal corruption.

READ ALSO: Reader question: What are the chances of blackouts in Austria this winter?

Since the late 1970s, Austria has been fiercely anti-nuclear, starting with an unprecedented vote by its population that prevented the country’s only plant from providing a watt of power.

Last month, the Alpine EU member filed a complaint with the European Court of Justice over the bloc’s decision to label nuclear power as green.

In 2020, the top EU court threw out an appeal by Austria to find British government subsidies for the nuclear power plant at Hinkley Point in breach of the bloc’s state aid rules.

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