Energy Policies of IEA Countries: Austria 2007

Since the last review in 2002, Austrian energy policy has seen many positive developments. Today, Austria counts among the IEA member countries with the highest share of renewable energy supply, thus increasing energy security and reducing CO2 emissions. Great progress has also been made in the utilisation of biomass for heat and electricity production. Nevertheless, many challenges remain. The climate strategy revision in 2007 is commendably realistic, but uncertainty remains whether it will be sufficient, and whether renewables and energy efficiency are well-balanced within it. While Austria is strongly promoting an increase of renewables production by adopting challenging targets, it is less ambitious in the area of energy efficiency. To achieve the renewables target, their supply will have to double, leading to significant increases in costs. In energy efficiency, while Austria is leading in developing efficient building solutions, there are concerns about implementation, especially about the lack of ambition and divergence in building codes. Overall, energy intensity has increased in recent years, and the government will have to put a strong focus on reversing this development. Despite the early opening of the energy markets, effective competition has failed to emerge. This is partially due to systemic weaknesses such as dominant incumbents, lack of transparency in price formulation and a weak regulatory system with the potential for conflicts of interest. This review thoroughly analyses Austrian energy policy and identifies the key challenges that need to be addressed.