State aid: Commission approves Austrian network reserve for ensuring security of electricity supply

Source: European Commission Spokesperson’s Service

The European Commission has approved, under EU State aid rules, Austrian plans to establish a network reserve for the Austrian electricity market. The temporary measure will be in
force until end 2025 and will contribute to safeguarding secure network operation and sufficient electricity supply in Austria, without unduly distorting competition in the Single Market.

In September 2020, Austria notified the Commission of its plan to establish a network reserve, as a part of its congestion management system, to ensure that there is sufficient electricity capacity
at all times to resolve bottlenecks in the transmission network. The Commission considers that the network reserve constitutes a measure to ensure generation adequacy and security of electricity
supply.

The 2014
Guidelines on State aid for environmental protection and energy allow Member States to put in place such measures under certain conditions. The Commission found that the measure is necessary
in view of the structural congestion problems that the Austrian electricity grid is facing and which prevent sufficient power flows, as demonstrated by the transmission system operator’s annual
system analysis, which must be coordinated with the regulatory authority.

The Commission also found that the aid is proportionate and limited to the minimum necessary, and that potential distortions of competition and trade are minimised, given that the reserve
procurement through competitive tenders will be open to a broad group of eligible bidders and that the contracted capacity will be held outside of the electricity market. Finally, in line with the

Electricity Regulation, Austria set out an action plan with a concrete timetable for adopting measures to reduce the identified structural congestion problems.

On this basis, the Commission concluded that the scheme is in line with EU State aid rules and approved it as a temporary measure, aligned with the duration of the action plan i.e. until the end of
2025.

Executive Vice-President Margrethe Vestager, in charge of competition policy, said: The Austrian network reserve approved today will enable Austria to ensure security of
electricity supply at all times. It will be contracted through competitive tenders. Consumers and a broad group of eligible operators, including local and foreign ones, will be able to participate
in the tenders. This will allow for a cost-effective and competitive measure, to the benefit of all electricity consumers.

A full press release is available online.

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