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Reader question: Should I buy an electric heater in Austria this winter?

With gas prices on the rise in Austria, is it worth investing in a small electric heater rather than cranking up your home heating system?

Reader question: Should I buy an electric heater in Austria this winter?
As the cost of gas continues to rise in Austria, some people are wondering if an electric heater could be cheaper to run this winter. Photo by Kübra Arslaner / Pexels.

As gas prices skyrocket in Austria, mostly fuelled by decreasing dependence on Russian gas and worries that the country could turn off the taps completely, many are worried that they won’t be able to foot their heating bill this winter.

A year ago, the cost of a megawatt hour of gas in Austria was around €41. By February, it had risen to around €77 per megawatt hour, by May it was €101 and as of August 1st it had hit €202, according to data from the Central European Gas Hub.

With no sign of prices slowing down any time soon, there are now fears that bills could be as much as eight times higher than before when the colder months come.

READ MORE: Inflation at 9.2% in July: How to beat rising prices in Austria

Local readers have been asking us if getting a small electric heater would be a bit cheaper than using gas heating. 

Electricity or gas heating: The big question

The question of how to cut energy costs is one that many people across Austria will be asking themselves as the autumn and winter months approach.

However, energy consultant Herbert Bednar from Energy Workshop in Klagenfurt, is advising against switching from gas to electricity-fuelled sources of heating, if possible.

In a report by ORF, electric heaters were described as having “very poor overall efficiency”. This is because electricity is produced in power plants which produce emissions and electric heaters don’t retain their heat for long after being switched off.

Bednar said: “With electric heating, it is basically the case that one kilowatt hour of electricity produces one kilowatt hour of heat.”

FOR MEMBERS: How to keep your apartment cool in Austria this summer amid rising energy prices

Instead, Bednar recommends a wood burning stove as a cheaper alternative to electric or gas heating.

He said: “A tiled stove is ideal because it doesn’t go cold again after a few hours, but gives off the heat throughout the day.”

But for people that live in an apartment and don’t have a wood burning stove, that option is not available.

Another consideration for those trying to save money on energy bills is an infrared panel heater.

These devices fared slightly better in Bernard’s analysis, as infrared generates heat on the body and can more effectively keep people warm. Bernard also estimated that heating from an infrared panel can be 10 to 15 percent cheaper than a radiator.

Yet infrared panels are still powered by electricity which has to be paid for and is also going up in price.

Figures from the Austrian Energy Agency show that the Austrian electricity price index (which monitors wholesale electricity prices) went up by 13 percent for August when compared with July of this year. However, when compared with August 2021, the index is up by 247 percent.

READ MORE: When will you get your cost of living ‘bonus’ payments in Austria?

The current price for electricity per kilowatt hour (kWh) in Austria is between 18 and 72 cents, according to e-Control. Prices fluctuate based on the location, energy provider and consumption.

Electric heaters are known as ‘energy guzzlers’. (Photo by Achudh Krishna on Unsplash)

In July, electricity prices per kWh in Vienna were 38 cents with the cheapest provider, 73 cents with the most expensive and just 24 cents with a provincial supplier.

Other methods to save energy (and money)

In recent months, the Austrian federal government has appealed to the Austrian population to save energy where possible. 

Energy Minister Leonore Gewessler has specifically asked households to lower their heating in the coming autumn and winter season by one or two degrees. This is mostly to save gas consumption amid fears that Russia could switch off the supply to Austria, but it can also work to save money on energy bills.

READ ALSO: Cost of living: Why are restaurants getting more expensive in Austria?

Additionally, the government recently agreed to impose an electricity price cap from this autumn to relieve some financial pressure on households, as reported by The Local.

The aim is to “support the Austrian population to ensure affordable energy supply for a certain basic need”, according to a statement released after the announcement in July 27th. The government didn’t provide further details but said that the conditions for the price cap would be developed by the end of August.

Other methods to save money this winter are wearing layers and warmer clothes while inside, ensuring windows and doors are insulated and not letting out precious heat, taking shorter showers at a lower temperature and switching off electrical appliances at the plug when they are not in use.

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COST OF LIVING

Why (and when) double-digit inflation is set to hit Austria

Financial experts in Austria do not expect inflation to slow down any time soon. In fact, they are predicting the opposite. Here's what you need to know.

Why (and when) double-digit inflation is set to hit Austria

In a recent interview, inflation expert Josef Baumgartner forecast that inflation in Austria will hit double-digits in the coming months.

Baumgartner, from the Austrian Institute of Economic Research (WIFO), told Kurier that residents in Austria should prepare themselves for an ongoing increase in inflation due to rising energy prices.

Baumgartner said: “We’re a long way from the all-clear. According to the announcements by Wien Energie and EVN, I expect an inflation rate of more than ten percent by September, and no later than April 2023.”

FOR MEMBERS: EXPLAINED: What is Austria’s ‘Tax Freedom Day’?

The latest estimate by Statistics Austria shows inflation was already at 9.2 percent in July, as reported by The Local.

This is in stark contrast to predictions made by the European Central Bank earlier this year when it was expected that inflation would fall in the second half of 2022.

How expensive could energy in Austria become?

WIFO expert Baumgartner based his forecast for Austria on wholesale electricity prices, which are currently 247 percent higher than in August 2021, reports ORF

Baumgartner said: “If the energy suppliers pass this on one-to-one, there is a risk of an enormous price increase.”

Additionally, Baumgartner expects prices for electricity and gas to go up by a further 50 percent in September, and was not optimistic that the planned nationwide electricity price cap will be enough to dampen energy prices.

READ MORE: Cost of living: How to save money on energy bills in Austria

He added that federal government intervention must go further to tackle gas and district heating prices.

On August 3rd, EVN and Wien Energie – both part of the Energieallianz Austria (EAA) group – announced they will be increasing energy prices from September.

EVN (which is mostly state-owned) blamed the move on price increases on the international wholesale markets.

According to ORF, Baumgartner believes these planned price increases will further impact the customer price index and push up inflation across Austria, even if the tariff changes only apply to customers in the east of the country.

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