The primary energy production in Austria is dominated by a remarkably high share of renewable energies. Austria holds a pioneering role internationally, with 88.2% of its domestic primary energy production coming from renewable energy sources. The main contributors are biomass and hydropower, taking advantage of Austria’s topography. However, renewables only account for approximately 36% of Austria’s gross final energy consumption. Recent political efforts and renewable energy promotion have led to the increased importance of other renewables such as wind, geothermal, and solar energy.

In 2024, renewables produced a total of 499.4 petajoules (PJ) of energy. Biomass accounted for 37.1%, hydropower for 32.9%, firewood for 9.4%, wind power for 6.7%, solar photovoltaic for 5.5%, heat pumps for 5.2%, biogas for 1.6%, solar thermal for 1.4%, and geothermal energy for 0.2%.

In 2024, Austria’s primary energy production comprised 42.4% biogenic energy, 29.1% hydropower, 6% ambient heat, 5.9% wind power, 4.9% energy from combustible waste, 4.9% solar energy, 3.4% natural gas, and 3.5% oil.

The European “Green Deal”, based on the Paris Climate Agreement, encompasses various political initiatives aimed at achieving climate protection goals. A key target is to reduce greenhouse gas emissions by at least 55% by 2030 compared to 1990 levels. As part of the EU climate and energy package, Austria committed to increase the share of renewable energy in its national energy mix to 34.0% by 2020. This target was surpassed, with a percentage of 36.5% achieved in 2020.

In June 2019, the EU enacted a comprehensive update of its energy policy framework to facilitate the shift away from fossil fuels towards cleaner energy and to deliver on the EU’s commitments in the Paris Agreement to reduce greenhouse gas emissions. This new energy rulebook, referred to as “Clean Energy for all Europeans Package”, marks a significant step towards the implementation of the union energy strategy, adopted in 2015. The package emphasises energy efficiency, security of supply, renewable energy development, and carbon dioxide reduction.

To align with the new EU energy package, the former Austrian government launched a climate and energy strategy called “#mission2030” in June 2018, which sets out strategies to meet the ambitious 2030 targets. Additionally, the former Austrian government intended to make Austria climate-neutral by 2040. The government programme of the previous Austrian government focused on increasing renewable energy in Austria’s total energy consumption, improving mobility services, implementing infrastructure measures, and decarbonising the road transport fleet. However, it lacked specific steps to achieve these targets. The government programme of the new Austrian government, which was sworn in on 3 March 2025, faces the same issue.

The EU Effort-Sharing Regulation (2018/842/EU) requires a 48% reduction in greenhouse gas emissions outside the EU ETS (EU Emissions Trading System) by 2030 compared to 2005 levels. In 2024, Austria emitted approximately 66 million tonnes of CO₂, representing a 28% reduction compared to 2005 levels. According to recent calculations by the Umweltbundesamt, a public body that serves as one of Austria’s leading environmental expert organisations, Austria’s current political agenda is unlikely to achieve the 2030 target. The consequences could be severe: if this target is not met, the Republic of Austria will have to purchase emissions certificates to compensate for the shortfall. This could result in costs amounting to billions of euros. According to Umweltbundesamt’s study, if the current political course remains unchanged, Austria will miss its 2030 target by at least 13.1 million tonnes of CO₂, even under the most favourable scenario.

Apart from the EU’s carbon reduction targets, Section 4 of the Renewable Energy Expansion Act (Erneuerbaren-Ausbau-Gesetz) sets out the European Union’s earlier objective of ensuring that at least 32% of the Union’s gross final energy consumption would come from renewable sources by 2030 (now 42.5%, with the EU aiming to reach 45%). Additionally, Section 4 para. 1 of the Renewable Energy Expansion Act sets the goal of achieving climate neutrality in Austria by 2040.

Section 5 para. 1 no. 13 of the Renewable Energy Expansion Act (Erneuerbaren-Ausbau-Gesetz) provides a definition for renewable energy. Energy from renewable sources or renewable energy is defined as “energy from renewable non-fossil sources, namely wind, solar (solar thermal and solar photovoltaic) and geothermal energy, ambient energy, tide, wave and other ocean energy, hydropower, energy from biomass, landfill gas, sewage treatment plant gas, biogas and renewable gas”.

Regulatory policies and decisions concerning the generation of renewable energy in Austria are determined by the Federal Minister for Economy, Energy and Tourism. Regulatory policies and decisions concerning climate and environmental protection are determined by the Federal Minister for Agriculture and Forestry, Climate and Environmental Protection, Regions and Water Management. Both ministers were nominated by the Austrian People’s Party and play a crucial role in implementing climate change measures, promoting the renewable industry, and proposing changes to the legal framework. The other parties in Austria’s current three-party coalition government, which was sworn in on 3 March 2025, are the Social Democratic Party and the NEOS.

E-Control, the regulatory authority for electricity, gas and hydrogen, serves as the regulatory authority for renewable energy and conducts investigations and provides expert opinions on the electricity, gas and hydrogen market and competition. It is also responsible for monitoring the issuance, transfer, and cancellation of guarantees of origin for renewable energy through a computerised database, the so-called “guarantees of origin database” (Herkunftsnachweisdatenbank). Additionally, E-Control monitors energy-efficiency progress and compliance with obligations under the Federal Energy Efficiency Act (Bundes-Energieeffizienzgesetz). Besides that, E-Control is required to submit the annual Monitoring Report on renewables to the Federal Minister for Economy, Energy and Tourism.

The competence for the regulatory framework governing the funding of renewables is shared between the Federal Minister for Economy, Energy and Tourism, the Federal Minister for Agriculture and Forestry, Climate and Environmental Protection, Regions and Water Management and E-Control. Provincial governments also have a significant influence as they are still competent to determine the locations for wind farms, green field photovoltaic systems, and other renewable projects.

Austria’s path towards a near-fully renewable electricity system by 2030, anchored in Renewable Energy Expansion Act (Erneuerbaren-Ausbau-Gesetz), is being driven by energy companies controlled by the federal state or the Austrian provinces, such as VERBUND AG, WIEN ENERGIE GmbH, EVN AG, Energie AG Oberösterreich, Energie Burgenland AG, Salzburg AG für Energie, Verkehr und Telekommunikation, Energie Steiermark AG, KELAG-Kärntner Elektrizitäts-Aktiengesellschaft, TIWAG-Tiroler Wasserkraft AG, and illwerke vkw AG.

VERBUND AG, a major force in hydropower, is expanding rapidly into wind, solar, and green hydrogen, and WIEN ENERGIE GmbH, Central Europe’s largest municipal energy supplier, which is accelerating distributed renewable development and district heating decarbonisation at scale. EVN AG complements this leading group through its own renewable portfolio and cross-border energy projects.

Austria’s industrial heritage is also a decisive asset. For example, Andritz AG supplies world-class hydropower and biomass technology, whilst Fronius International – a privately held company – is a global leader in solar inverters and smart energy management systems. Even OMV AG, historically a fossil fuel major, is redirecting capital into green hydrogen, sustainable aviation fuel, and low-carbon partnerships.

A growing cohort of pure-play developers – WEB Windenergie, and Oekostrom AG – are leveraging the EAG’s market premium framework to bring utility-scale solar and wind projects to market at pace.

Meanwhile, Austria’s banking sector, led by Erste Group and Raiffeisen Bank International, is channelling substantial green finance and ESG-linked lending into the transition.

Underpinning everything is Austrian Power Grid (APG), which is undertaking its largest-ever investment programme to reinforce transmission infrastructure for variable renewable generation.

Finally, the rapid proliferation of citizen-led Energiegemeinschaften (energy communities) signals a genuinely decentralised dimension to Austria’s transition; one that sets it apart from many of its European peers.

Taken together, these players reflect a uniquely Austrian blend of listed utilities, globally competitive technology companies, agile developers, and grassroots participation – collectively making Austria one of Europe’s most compelling case studies in private-sector-led energy transition.

What we observe is that the approach to renewable energy adoption varies depending on the industry, existing solutions, and local circumstances. For instance, many players of the strong Austrian paper industry have already implemented waste heat cogeneration plants several years ago to cover their high demand for heat and electricity. Meanwhile, the Austrian steel industry is undertaking a transition from coal and natural gas to hydrogen as part of its efforts to achieve net-zero emissions. In this context, Austria’s largest steel producer plans to install two electric arc furnaces to decarbonize its energy-intensive production processes. These furnaces are expected to cut its greenhouse gas emissions by approximately 30% by 2029.

Many industries, both large and small, are undertaking photovoltaic projects either on their own premises or through contracting models, either on-site or in nearby locations. For small businesses, procuring renewable energy from regular suppliers is often more convenient, as they may lack the resources to implement their own renewable energy systems.

An emerging trend is the active involvement of large businesses and industries in the installation of on-site photovoltaic systems. A notable example is Vienna’s airport, which has made significant investments in photovoltaic systems on rooftops and greenfield areas adjacent to the runways. Consequently, the airport can now meet approximately 30% of its electricity needs through these installations.

Additionally, businesses increasingly enter into Power Purchase Agreements (PPAs) for several reasons. PPAs provide a secure basis for financial planning, as they guarantee the purchase of generated renewable power for several years at a fixed price. Alternatively, upper and lower price limits can be set. These bilateral agreements offer a high degree of customisation, allowing for clauses such as “take-or-pay” or “take-as-produced”. Additionally, businesses can enhance their image by purchasing renewable energy.

A particularly noteworthy development in the Austrian context is the rise of Energiegemeinschaften –energy communities – enabled by the Renewable Energy Expansion Act (Erneuerbaren-Ausbau-Gesetz). These communities allow private individuals, municipalities, and businesses to jointly produce, consume, store, and share renewable energy within a defined geographical perimeter, typically at the level of a local distribution grid but also on regional level. The scale of uptake is striking. Austria already counts approximately 3,000 Erneuerbare-Energie-Gemeinschaften, over 500 Bürgerenergiegemeinschaften, and over 3,000 Gemeinschaftliche Erzeugungsanlagen – figures that testify to the breadth of grassroots engagement with the model. For businesses, participation in an Energiegemeinschaft offers a compelling middle ground between passive energy procurement and full-scale self-generation: companies can co-invest in shared photovoltaic or other renewable assets, benefit from reduced energy costs, and contribute to local decarbonisation without bearing the full financial and administrative burden of standalone project development. Small and medium-sized enterprises, in particular, are finding this model attractive, as it provides access to renewable energy at scale that would otherwise be unattainable on their own. With the regulatory framework continuing to mature, this model is rapidly emerging as one of the most distinctive and scalable innovations in Austria’s broader renewable energy landscape.

Austria’s business community has markedly shifted its approach to renewable energy over the past year, driven by a convergence of regulatory obligation, energy security imperatives, and evolving investor expectations. The energy price shock that followed Russia’s invasion of Ukraine continues to reverberate for Austrian companies; renewables have become less a statement of principle and more a tangible hedge against supply vulnerability and price volatility. At the same time, the full weight of EU sustainability reporting requirements – particularly the Corporate Sustainability Reporting Directive and EU Taxonomy alignment – has moved energy transition from the sustainability department into the boardroom, making credible renewable commitments a prerequisite for access to green finance and institutional capital.

The most significant regulatory development of the past year was the enactment of the new Austrian Electricity Act (Elektrizitätswirtschaftsgesetz) in December 2025. This landmark legislation replaced the longstanding Austrian Electricity Sector Act (Elektrizitätswirtschafts- und -organisationsgesetz 2010) framework and represents the most comprehensive reform of Austria’s electricity sector in over a decade. The new Austrian Electricity Act modernises the legal architecture governing electricity markets, grid access, and network regulation, while transposing key elements of the EU’s revised electricity market design into Austrian law. Among its most consequential features are enhanced provisions for renewable energy communities, clearer rules for peer-to-peer electricity trading, and a strengthened framework for the integration of prosumers into the grid. For the business community, the Act provides long-awaited legal clarity on market participation models and removes a number of structural barriers that had previously slowed investment decisions.

Beyond this Act, the Renewable Energy Expansion Act (Erneuerbaren-Ausbau-Gesetz) market premium mechanism has continued to channel investment into solar and wind projects, with successive support scheme rounds drawing strong competition from developers. PPAs have become an established feature of the Austrian market, with a growing number of large industrial and commercial consumers locking in long-term price certainty directly with renewable generators – a trend that reflects both the commercial logic of energy cost management and the reputational imperative of demonstrable sustainability commitments.

On the infrastructure side, the grid constraints identified in 2024 – when surplus solar and wind generation had to be curtailed due to bottlenecks in transporting power from the northeast to pumped storage facilities in the west – have moved decisively to the top of the policy agenda. Grid expansion and digitalisation have gained new urgency, both as a precondition for further renewable growth and as a central focus of regulatory attention under the new Austrian Electricity Act framework. Green hydrogen also remains a strategic priority: the Southern Hydrogen Corridor initiative, signed in January 2025 by Austria, Germany, Italy, Algeria, and Tunisia, continues to advance, with the prospect of renewable hydrogen produced in North Africa reaching Austria via some 3,300 kilometres of pipeline representing a significant long-term contribution to decarbonising the country’s industrial and heating sectors.

Approximately one-third of Austria’s carbon emissions fall within the scope of the EU ETS (EU Emissions Trading System), which is designed to reduce emissions by assigning a financial cost to them. Consequently, major industrial operators in Austria have implemented measures to minimise their carbon emissions in order to avoid the costs associated with the acquisition of carbon emission certificates.

In addition to the EU Emissions Trading System (EU ETS I), a second emissions trading system (EU ETS II) was introduced. EU ETS II covers emissions arising from road transport, buildings and businesses that, due to their size, are not subject to the EU-wide system for monitoring and limiting greenhouse gas emissions (EU ETS I). From 2027, the national CO₂ pricing mechanism, implemented through the National Emissions Trading Act 2022 (Nationales Emissionszertifikatehandelsgesetz 2022), will be replaced by EU ETS II. In 2025, the Austrian CO₂ tax amounted to EUR 55 per tonne of CO₂.

Directive 2018/2002/EU on energy efficiency establishes rules and obligations to achieve the EU’s 2020 and 2030 energy efficiency targets. Austria experienced significant delays in transposing this Directive, and the European Commission consequently initiated infringement proceedings against Austria in late 2020. Political disagreements within the government were the primary cause of this substantial delay, as the former Austrian government was unable to reach agreement on the specific legislative text. The government bill required twelve drafts before it was finally ready to be submitted to the National Parliament. In December 2023, the European Commission closed the infringement proceedings it had initiated against Austria.

Directive 2023/1791/EU, a recast of Directive 2018/2002/EU and commonly referred to as EED III, was published in the Official Journal of the European Union on 20 September 2023. Certain specific provisions were required to be transposed by 15 May 2024, whilst the general targets must be transposed by 11 October 2025. As of 2026, Austria has yet to implement this Directive. Particular concern currently exists amongst small and medium-sized enterprises (SMEs), as some of these entities may also be subject to the new energy audit obligations under EED III where they operate as energy-intensive businesses – and Austria has not yet enacted any relevant legal framework in this regard.

The new Austrian Electricity Act (Elektrizitätswirtschaftsgesetz) provides the regulatory framework for the generation, transmission, distribution, and supply of electricity, as well as the organisation of the electricity industry. It also supports the development of electricity generation from renewables and ensures grid access for renewables.

The Renewable Energy Expansion Act (Erneuerbaren-Ausbau-Gesetz) incorporates the European Union’s earlier objective of ensuring that at least 32% of the Union’s gross final energy consumption would come from renewable sources by 2030 (now 42.5%, with the EU aiming to reach 45%) and Austria’s aim for climate neutrality by 2040. This law provides rules for renewable energy funding (a market premium and investment grants), regulations for renewable energy communities, guarantees of origin for renewables, and an integrated Austrian network infrastructure plan.

Since Austria is still dominated by federalism, Austria’s federal system grants its nine provinces extensive legislative authority in many areas (e.g., building law, regional planning law). Additionally, each province enacts its own Electricity Act in accordance with the framework legislation in the electricity sector.

Renewable energy facilities generally require a construction permit (Baugenehmigung) to comply with regional building codes. However, the differences in the provinces range from complete exemption (from the permit necessary or from the scope of application of the respective provincial building regulations), to the exemption from authorisation (if a permit under the regional Electricity Law is required), to a simple-notification procedure up to a permit requirement.

Furthermore, renewable energy systems must comply with provincial planning regulations (i.e., zoning, provincial development, and planning purposes) as well as municipal regulations aimed at protecting the landscape (Ortsbildschutz).

Additionally, a permit under the respective provincial Electricity Act (elektrizitätsrechtliche Bewilligung) may be required. Due to different provincial laws, the prerequisites for acquiring a permit to generate, transmit, and distribute renewable electricity (i.e., permit requirement, simple notification procedure, or complete exemptions) differ across provinces. Typically, both the type of permit and the permit procedure required under the respective provincial Electricity Act depend on the maximum capacity (Engpassleistung) of the respective renewable energy system. Nevertheless, facilities subject to authorisation under trade law (Betriebsanlagengenehmigungsausnahme gemäß § 12 Abs 2 Elektrizitätswirtschafts- und -organisationsgesetz 2010) are exempt from any permit or notification obligations.

Hydropower facilities require a permit under the Water Act (Wasserrechtsgesetz 1959).

Environmental impact assessments may be required for hydropower, wind, geothermal, and biomass facilities, depending on factors such as size and maximum output.

Biomass plants may require a permit under the Waste Management Act (Abfallwirtschaftsgesetz 2002).

Geothermal plants require a permit in accordance with the Water Act (Wasserrechtsgesetz 1959). Each province defines areas where such permits are obligatory. Outside of these areas no such permits are required.

The primary electricity companies in Austria are predominantly owned by the federal state or the federal provinces, with the majority of shares held by these public entities. These companies are actively involved in the renewable energy sector. For example, the federal state holds a 51% stake in VERBUND AG, one of the largest suppliers of electricity generated from hydropower. Similarly, the province of Tyrol fully owns TIWAG (Tiroler Wasserkraft AG), another company operating in the hydropower sector. Apart from these electricity companies, there are no other government-owned renewable energy companies in Austria.

For details regarding government incentive schemes promoting renewable energy, see question 11.

The most significant regulatory development of the past year was the enactment of the new Austrian Electricity Act (Elektrizitätswirtschaftsgesetz) in December 2025. This landmark legislation replaced the longstanding Austrian Electricity Sector Act (Elektrizitätswirtschafts- und -organisationsgesetz 2010) framework and represents the most comprehensive reform of Austria’s electricity sector in over a decade. The new Austrian Electricity Act modernises the legal architecture governing electricity markets, grid access, and network regulation, while transposing key elements of the EU’s revised electricity market design into Austrian law. Among its most consequential features are enhanced provisions for renewable energy communities, clearer rules for peer-to-peer electricity trading, and a strengthened framework for the integration of prosumers into the grid. For the business community, the Act provides long-awaited legal clarity on market participation models and removes a number of structural barriers that had previously slowed investment decisions. The new provisions also address risk provisioning in the electricity sector and refine the transposed provisions of REMIT (Regulation (EU) 1227/2011 on wholesale energy market integrity and transparency).

In January 2023, the former Austrian government published a draft of the Renewable Energy Expansion Acceleration Act (Erneuerbaren-Ausbau-Beschleunigungsgesetz). This legislation aims to expedite the expansion of renewable energy by streamlining the permitting process for renewable energy projects. Additionally, it will enhance opportunities for zoning and spatial planning and aligns with the objectives set out in the REPowerEU Package, including the establishment of designated “Go-To Areas” for renewable energy projects. The current Austrian government has published a new draft of this Act. The submissions received in respect of this Act have already been incorporated, and a formal government bill is now before Parliament. The Act is intended to be passed by the National Parliament before the end of 2026. However, the energy sector considers the practical effects of this Act to be, at least in part, insufficient to advance the energy transition at the pace required. The full practical implications can only be assessed once this Act has entered into force.

In February 2024, the Council of Ministers of the former government approved a draft of the Green Gas Act (Erneuerbares-Gas-Gesetz). The draft legislation aimed to gradually replace a specified proportion of natural gas with renewable gas (Grün-Gas-Quote). However, the government programme of the newly elected Austrian government provides only for a market premium model, rather than the Grün-Gas-Quote envisaged by the previous government. The current government has not yet published a draft of this Act. Based on the most recent legislative developments in the electricity sector and the government’s stated plans in this regard, a new draft of the Green Gas Act appears unlikely to be published this year.

The Renewable Heat Act (Erneuerbaren-Wärme-Gesetz), which is part of the Austrian Heat Strategy, entered into force at the beginning of 2024. The initial draft of the Renewable Heat Act outlined plans to phase out coal heating systems by 2035, followed by the complete decommissioning of all fossil-powered gas heating systems by 2040. However, the law currently in force solely focuses on the prohibition of fossil-powered central or decentralised heating systems in new buildings by 2024. Some experts in the energy sector have vehemently criticised this shift in approach, denoting it as a backward step that jeopardises Austria’s target of achieving climate neutrality by 2040. Under the newly elected Austrian government, it appears unlikely that the Renewable Heat Act will be revised to include a complete phase-out of all fossil-fuelled gas heating systems by 2040.

In principle, the Renewable Energy Expansion Act (Erneuerbaren-Ausbau-Gesetz) provides three support mechanisms: market premiums based on tendering procedures, market premiums based on applications, and investment grants. Before the Renewable Energy Expansion Act, the Green Electricity Act 2012 (Ökostromgesetz 2012) offered support to producers of renewable energy through feed-in tariffs based on contracts with the Green Electricity Settlement Agency, referred to as OeMAG. Under the Renewable Energy Expansion Act, OeMAG is no longer obligated to purchase the generated electricity from renewable energy sources. Hence, the electricity producers must market the electricity themselves.

The market premium represents the subsidy that can be obtained for the electricity from renewables which is sold and fed into the public grid. Therefore, this subsidy aims to compensate for the difference fully or partially between the production costs of electricity from renewables and the average market price for electricity for a certain period. It is calculated from the difference between the value to be applied in cents per kWh determined in the context of a tendering procedure or established by ordinance and the respective reference market value or reference market price in cents per kWh. A market premium can be obtained through a tendering procedure for photovoltaic, hydropower, wind, biomass, and green gas facilities. For 2026, the annual tender volumes are 700,000 kW peak for photovoltaic, 7,500 kW for biomass, 390,000 kW for wind power, and 20,000 kW for joint tenders for wind and hydropower installations. The volumes in 2026 for market premiums based on applications are 90,000 kW for hydropower installations, 7,500 kW for biomass, and 1,500 kW for green gas. The market premium is typically paid out monthly by the competent body, the Renewables support management entity (EAG-Förderabwicklungsstelle). OeMAG has been appointed as competent body and is therefore entrusted to fulfil the task of the Renewables support management entity.

Investment grants support the construction, revitalisation, and expansion of photovoltaic, hydropower, wind power, biomass, and green gas facilities. These grants are awarded through subsidy calls (Fördercalls) with a limited application timeframe, following the “first come, first served” principle. The details of investment grants are outlined in ordinances issued by the Federal Minister for Economy, Energy and Tourism in agreement with the Federal Minister for Agriculture and Forestry, Climate and Environmental Protection, Regions and Water Management.

Further to the funding on federal level, there are funding programmes for renewables and energy efficiency at provincial level.

In addition, end-users of self-produced renewable energy are exempted from electricity tax (Elektrizitätsabgabe). This also applies to the consumption within renewable energy communities.

In Austria, the structure of the natural gas industry plays a significant role in influencing electricity prices, as gas-fired power plants contribute notably to Austria’s gross final electricity consumption. While Austria relies on renewable energy, its electricity market is integrated into the broader European system. Consequently, wholesale electricity prices are determined by the most expensive marginal source of generation under the Merit Order system– often natural gas, particularly during periods of high demand or low renewable output.

The sharp rise in natural gas prices following the 2022 energy crisis led to a spike in electricity costs in Austria, despite its substantial share of renewables. This triggered public and political pressure for reform of the pricing mechanism at the EU level, particularly the Merit Order system. In response, Austria joined wider EU discussions on decoupling electricity prices from gas prices. In 2023, the former Austrian government supported EU-level reforms aimed at redesigning the market to reflect the actual mix of electricity sources more accurately. These proposals included the promotion of long-term contracts and Contracts for Difference (CfDs) for renewable energy. However, these discussions have since stalled at the EU level, as the immediate impact of the 2022 energy crisis has diminished.

In 2020, the last coal plant was decommissioned considering climate protection. In 2022, the former Austrian government planned to revitalise a decommissioned coal plant due to war-related reductions in Russian gas supplies. In 2026, there are to our knowledge, no plans to revitalise decommissioned coal plants.

The first major challenge lies in gaining public acceptance, which is crucial for the implementation of energy projects. Any opposition can significantly delay the permitting process by several years and render it economically unviable. A prime example of such delays is the construction of the Salzburg power line, a project undertaken by APG, the Austrian Transmission System Operator. In 2012, APG filed an application for the approval of a 380 kV power line under the Environmental Impact Assessment Act. However, several municipalities and citizen movements immediately appealed the decision of the Federal Administrative Court (BVwG). Their appeal was not against the power line itself but rather focused on the demand for underground cabling to prevent significant environmental damage. After a comprehensive 295-page (!) decision in late 2020 (!), the Supreme Administrative Court (Verwaltungsgerichtshof) dismissed all appeals, allowing the construction work to resume.

Another obstacle is the territorial planning procedure, especially for wind farms and photovoltaic plants.

Another key challenge is the insufficient capacity of the electricity grid, occurring alongside a rapid increase in renewable generation. In several instances throughout 2025, renewable output had to be curtailed due to transmission bottlenecks.

The primary goal of key contracts is to secure the necessary land for specific projects. Typically, a contract is concluded between the landowner and the project developer. For photovoltaic systems, easement or rental contracts are often used to obtain the necessary area. In such cases, a contractor usually constructs, develops, and operates the photovoltaic system on behalf of the property owner. For households, these contracts generally stipulate that the homeowner is the main user and operator of the rooftop photovoltaic plant, as self-consumption of renewable energy is exempt from electricity tax.

Additionally, Power Purchase Agreements (PPAs) play a key role in this area as they provide a secure basis for financial planning by securing the purchase of generated renewable power for several years at a fixed price.

There are no classical domestic supply obligations requiring reservation of renewable output for domestic consumption, and no restrictions on renewable gas or hydrogen imports or exports, though the infrastructure for cross-border hydrogen trade remains nascent.

Austria does not apply local content requirements in its renewable energy tender procedures, as these would generally be incompatible with EU procurement law and the fundamental freedoms of the TFEU.

To promote European value creation, Austria has already introduced a measure in that regard. Under the Renewable Energy Expansion Act (Erneuerbaren-Ausbau-Gesetz), investment grants for photovoltaic systems are increased by up to 20% if they are built using technical components with European value added (including the EEA and Switzerland). Investment grants for electricity storage systems are raised by up to 10% if the systems originate from European value creation (including the EEA and Switzerland).

The Regulation (EU) 2024/1735, the Net Zero Industry Act, commonly referred to as “NZIA” is directly applicable in Austria since 29 June 2024, and introduces new special procurement obligations for contracts involving net-zero technologies such as solar PV, wind, batteries, heat pumps, hydrogen, biomethane, and hydropower.

A crucial Austria-specific carve-out deserves emphasis: the Austrian Federal Ministry of Justice (Bundesministerin für Justiz, BMJ) has confirmed that contracts in the utilities sector which enable the generation of electricity in Austria fall outside the scope of the NZIA’s special procurement provisions, by virtue of the existing Commission exemption decision for Austrian electricity generation. This is a significant limitation on the NZIA’s practical reach in the Austrian energy sector.

Within the NZIA’s scope, the BMJ circular identifies three key procurement obligations under Article 25. First, minimum ecological sustainability requirements will become mandatory but only once the Commission issues an implementing act (not yet published); until 30 June 2026, the obligation applies only to central purchasing bodies and contracts of EUR 25 million or more. Second, for construction contracts, contracting authorities must already – since 29 June 2024, without awaiting any implementing act – include at least one of three contract performance conditions: a social or employment-related condition, a cybersecurity compliance requirement, or a timely delivery obligation backed by an appropriate penalty. Notably, the BMJ considers the social condition to be automatically satisfied in Austria by operation of existing law, given the mandatory ILO compliance obligations already embedded in the Federal Procurement Act (Bundesvergabegesetz 2018), though it recommends including an explicit clause for clarity.

The most strategically significant NZIA provision is the “resilience criterion” under Article 25 para 7, designed to counter dependency on any single third country for net-zero technology supply. Once triggered by a Commission implementing act – specifically where a single third country accounts for more than 50% of EU supply of a given net-zero technology, or where its share has risen by at least 10 percentage points in two consecutive years and reached at least 40% – contracting authorities are required to impose mandatory contract performance conditions. These include a cap of 50% of contract value sourced from any single third country, and a contractual penalty of at least 10% of the value of the relevant net-zero technologies in the event of non-compliance. This mechanism is particularly relevant for solar PV given Chinese market dominance, but remains contingent on the Commission’s implementing act, which has not yet been issued.

Both the NZIA and the U.S. FEOC framework share broadly the same underlying strategic objective of reducing dependency on third country-dominated supply chains, and the outcome of ongoing EU-U.S. Critical Minerals Agreement negotiations will be a key determinant of Austrian companies’ future competitive positioning in the U.S. market.

In general, the deployment of renewables has not been affected by any non-country specific factors. However, the increasing global demand for renewable energy system components has led to delivery shortages in Austria.

Austria’s most strategically critical infrastructure project is the Salzburgleitung, a major high-voltage transmission line being developed by Austrian Power Grid (APG) to address one of the country’s most significant internal grid bottlenecks and to support Austria’s role as an electricity transit country between Germany and Italy.

In pumped storage hydropower, VERBUND’s Limberg III project at Kaprun in Salzburg represents a major extension of the existing Kaprun complex, adding significant additional storage capacity that is vital as intermittent renewable generation grows across Europe.

In a significant move within Austria’s renewable energy sector, WIEN ENERGIE GmbH reinforced its position in wind power through the acquisition of ImWind, one of Austria’s largest wind energy developers and operators, materially expanding both its renewable generation portfolio and its project pipeline.

Onshore wind expansion is concentrated principally in Lower Austria and Burgenland, with large-scale projects in the Weinviertel region and along the Pannonian Basin.

Solar PV deployment has accelerated sharply, driven by both subsidized tender rounds and a significant boom in unsubsidized rooftop and ground-mounted installations, with agri-PV pilots also emerging across several provinces. One of Europe’s largest agrivoltaic-wind projects is located in the district of Neusiedl am See, Burgenland. The project entails the development of an agrivoltaic plant with a capacity of up to 164 MW, covering 180 hectares of agricultural land. This dual-use approach enables continued agricultural activity while simultaneously producing solar energy. The photovoltaic installation is ultimately intended to be integrated with an existing wind farm.

On green hydrogen, Austria is positioning itself as a future transit and production hub, with several electrolyser and pilot projects under development – particularly in Upper Austria and Styria – though large-scale commercial deployment remains at an early stage.

Another major project is the “Underground Sun Storage” by RAG Austria AG, Austria’s largest energy storage company. This ground-breaking initiative involves the world’s first underground pore storage facility for hydrogen. Through electrolysis, solar energy is converted into green hydrogen, which is then stored in its pure form in an underground natural gas reservoir located in Gampern, Upper Austria. The storage facility’s capacity is equivalent to the surplus energy generated by approximately 1,000 photovoltaic systems installed on single-family homes during the summer. This excess energy is stored during the summer months and can be utilized during winter to generate electricity and heat.

Austria’s BESS market is at an early but accelerating stage, driven by rising intermittent solar PV capacity, APG’s growing need for fast-response ancillary services, and declining battery costs. Three principal business models are emerging:

Standalone BESS business models are primarily built on stacked revenues from ancillary services (notably FCR/aFRR) plus intraday/wholesale arbitrage, with returns heavily dependent on execution quality and market volatility. As competition increases, projects are shifting from “pure merchant” narratives to structures that allocate dispatch rights and market risk more explicitly between owner, optimiser, and offtaker.

Co-located and hybrid models (PV+storage, wind+storage, or wind+PV+storage) are growing quickly as they can reduce curtailment exposure, smooth output, and improve utilisation of an existing or constrained grid connection point.

There is no single official Austrian dataset that reliably states what percentage of BESS deals are standalone vs co-located vs hybrid; public reporting is fragmented and gaps in standardised BESS data exist.

Financing is diverging by model: standalone merchant BESS remains hardest to lever and often stays equity-heavy unless it has credible revenue stabilisation and a proven optimiser/offtaker setup; where project finance is achieved, lenders tend to be conservative on merchant cash flows. Co-located/hybrid projects are generally more bankable when there is a revenue anchor.

With its significant hydropower production and the need to find an alternative energy source to replace natural gas or coal in energy-intensive industrial processes, hydrogen has become a top priority for the energy sector and the industrial players. In response, the former Austrian government presented a hydrogen strategy in 2022 to address these challenges. In 2024 the Implementation Report on the Hydrogen Strategy for Austria was published. The strategy outlines the following objectives:

• By 2030, Austria aims to install 1 GW of electrolysis capacity. The strategy assumes a utilisation rate of 50%, which amounts to approximately 4.35 TWh.
• Replace 80% of hydrogen currently produced from fossil sources with green hydrogen by 2030. With the mentioned capacities, this target should be achievable.
• Looking ahead to 2040, the projected hydrogen demand is expected to be 67-75 TWh. Out of this demand, hydrogen alone could meet 16-25 TWh. The strategy suggests that the remaining demand could be met by methane. However, the expansion plan beyond 2030 remains unclear, as no specific targets have been set.

To achieve these ambitious goals, the former Austrian government has implemented various funding opportunities for the construction of necessary facilities and research in this field. Given the full commitment of all key players, including the energy industry, large energy-consuming industries, and the government, we are confident that Austria will emerge as a leader in hydrogen technology. In this context, the Austrian regulatory authority for electricity and gas (E-Control) has published a discussion paper outlining the key points of a hydrogen market model. Relevant market participants are now invited to submit their responses to the outlined key points.

Projects for households are privately financed, utilising various subsidy schemes that the Austrian federal and provincial governments have bolstered in recent years to promote renewable energy initiatives. Corporate projects, on the other hand, are financed either directly by the company or by major investors.

At present, we have not observed any effect in this regard.