Substantial investments are required to meet Austria’s 2030 target of 100% renewable electricity generation, says GlobalData

Attaurrahman Ojindaram Saibasan, Senior Power Analyst at GlobalData, comments: “The country’s target for greenhouse gas (GHG) emission reduction is set at 36% compared to 2005 levels. Austria’s NECP indicates that the country plans to rely on a 100% renewable electricity system by 2030. However, at the moment, electricity generation from renewables (including hydropower) only accounts for 80.7% of the country’s power generation. If Austria continues at this pace, it will fall short of its target with only 86.8% of the country’s total power generation being from renewable sources by 2030.”

According to GlobalData’s report, ‘Austria Power Market Size, Trends, Regulations, Competitive Landscape and Forecast, 2022-2035’, generation from renewable power sources increased from 12 TWh in 2010 to 20.4 TWh in 2021, at a compound annual growth rate (CAGR) of 4.9%. By 2035, generation from renewable energy sources is expected to increase to 51.3 TWh, at a CAGR of 6.8%. Currently, solar PV and onshore wind constitute most of the country’s installed renewable power capacity.

Image: GlobalData

Saibasan adds: “In March 2021, the Austrian government presented its final version of the Renewable Energy Expansion Act - Erneuerbaren-Ausbau-Gesetz (EAG). The Act replaced previous subsidy mechanisms and EAG will provide market premiums for renewable power plants with the aim of developing the renewable sector over the next 10 years.

“The premiums provide compensation for the difference between the production cost of electricity from renewable sources and the average market price for electricity. The premiums are administratively decided for solar PV and biomass whereas for wind, hydropower, small hydro, and biogas it is provided through auctions. This will encourage and assist renewable power developers to compete in the free market and will ensure the development of renewable projects remains profitable.”

The country reiterated its renewable target under the new EAG to achieve 100% renewable electricity supply by 2030. As per government sources the country will need additional generation of 27 TWh from renewable sources by 2030. Of this, 11 TWh is expected to be achieved from solar PV, 10 TWh from wind, 5 TWh from hydropower and 1 TWh from biopower.

In 2021, hydropower constituted to 48.1% of Austria’s total power generation. The country’s pumped storage is speculated to have a significant share in the future electricity market in the country. The pump storage power sector is expected to provide essential storage and flexibility towards accommodating a growing share of variable renewable generation into the Austrian and European electricity systems. However, the government needs to mobilize substantial investment to make up for the expected shortage to meet the 2030 target. Currently, the planned projects investment between 2022-2030 is worth approximately $22.2 billion. An additional $4 billion is required to meet the target and the country may look to the EU for this support in order to ease the process of foreign direct investments into the renewable power market.