Austria Agrees on 10-Cent Electricity Price Cap for Households

If prices fall back below the 16.5-cent trigger threshold, the crisis mechanism remains in effect for an additional three-month follow-up period to provide continued stability for consumers.

State Secretary Michaela Schmidt emphasized the automatic nature of the protection. "Mit der Zehn-Cent-Garantie schaffen wir einen automatischen, besonders schnell wirksamen Schutzschirm," she said.

Support for Businesses and Industry

For small and medium-sized enterprises, a uniform subsidy per kilowatt-hour consumed is planned instead of a basic-consumption cap. The exact level of this subsidy has not yet been determined.

The government also approved an industrial electricity package that will take effect starting in 2027. A dedicated industrial electricity price for particularly energy-intensive operations will benefit around 400 companies that consume at least one gigawatt-hour of electricity per year.

Under the industrial electricity price, a maximum of half of the wholesale price is subsidized, with a lower limit of 5 cents per kilowatt-hour. The existing electricity cost compensation scheme for energy-intensive companies, which covers indirect CO2 costs passed through electricity prices, will be extended until 2029, with the number of benefiting companies doubling from 60 to 120.

Both industrial measures are expected to relieve industry by around 250 million euros per year. Economy Minister Hattmannsdorfer stated, "Unser Ziel ist klar: Produktion, Investitionen und Arbeitsplätze müssen in Österreich bleiben."

Financing and Criticism

The government states the measures are intended to be budget-neutral and financed through the energy crisis contribution, which energy suppliers must pay in case of high profits. The planned counter-financing also involves allowing operators of wind power and solar installations to depreciate investments more slowly for tax purposes.

The package has drawn criticism from the electricity industry and the renewable energy sector. Barbara Schmidt, Secretary General of Oesterreichs Energie, criticized that politics treats the electricity industry like an ATM. The renewable energy industry warns that the tax changes could make investments in expanding renewable energy less attractive.

The electricity industry cites studies showing that renewable energy lowers electricity prices in the long term, with wind power having a particularly strong price-dampening effect. Each additional amount of wind or solar power pushes down the wholesale price because less expensive electricity from gas-fired power plants is needed.

The Industriellenvereinigung welcomed the industrial electricity package, and the Österreichischer Gewerkschaftsbund also expressed satisfaction. However, ÖGB Federal Managing Director Helene Schuberth noted that effective measures for gas, electric heating, heating oil, and pellets are still missing.

The FPÖ considers the 10-cent cap price still far too high. The law has not yet been passed, so the exact design of the mechanism remains pending.