Editorial - VGB PowerTech Journal 12/2015

Shape the future of our energy supply

We are living in a time of constant change. Politically, economically, technologically. Ever more often the focus of change is placed on energy policy: The sources from which we draw our electricity, how reliable and calculable the supply is and how resilient our grid infrastructure is determines the desirability of business locations and a society’s prosperity.

Austria, the land of water

When it comes to renewable energy, Austria has an excellent standing, not only compared to the rest of Europe, but also on a global scale.

As an Alpine country abundant in water, we have a 65 % share in hydropower for the generation of energy. By way of comparison, the EU-28 share in hydropower lies at 13 %. At the same time, Austrian storage and pumped storage power plants are of special importance. They have the capacity to store electricity in large quantities and with a high efficiency factor of 80 %. Thanks to their great flexibility, they are indispensible for the cross-border utilisation for balancing energy and grid support. Within 1 to 2 minutes, they are able to remove excess electricity from the grid (pumps) or generate electricity as required (turbine operation).

The Austrian energy industry

Austria’s electricity industry is committed to an affordable, safe and efficient energy supply for Austria and is aware of its economic responsibility. The representation of interests for the Austrian energy industry (Oesterreichs Energie) currently comprises some 140 member companies with just under 21,500 employees, who produce more than 90 per cent of Austria’s electricity and operate Austria’s transmission network and distribution grid. In 2014, the electricity production of the members of Oesterreichs Energie attained some 65 billion kilowatt hours, 65 per cent of which came from sustainable hydropower.

General regulations for a joint European power market

However, Austria also has problems that ought to be tackled rapidly. Strains on the market, high political costs in the form of duties, taxes and green energy costs on the total price, stagnating investments and long approval procedures are applying the brakes to a sustainable energy future. It is for this reason that the organisation of the regulatory framework is of central importance: We need a “level playing field” in Europe, which means equal and fair competitive conditions between the production technologies, contributing to the attainment of energy policy objectives. The goal is the “energy only” electricity market, which reflects the true value of flexible and assured capacity at different times. It is only in a large, joint European power market that all of these demands can be made possible. It is essential to overcome all obstacles to the cross-border power trade and to harmonise contradictory energy and environment policy objectives.

Energy policy objectives

The European climate and energy objectives for 2030 have been agreed: 40 % fewer greenhouse gas emissions, a target of 27 % for renewable energies as well as a 27 % energy efficiency target. Many countries have registered voluntary targets for reducing greenhouse gases prior to the UN climate summit in Paris – apart from the EU the USA, Japan and for the first time large emerging economies such as China and India. The Paris Agreement will deliver a dedicated timetable for the further course of action in global climate protection and result in a secure, sustainable, competitive and affordable energy supply worldwide.

The energy future is renewable, efficient and innovative

But also the customers and their needs for electricity-supply are changing. The so called “Energiewende”, the switch from fossil to renewable energies, has reached the end-user: the demand for renewable energy is increasing rapidly. Consumers are emerging as “prosumers”, who produce electricity themselves and demand market participation. A modern energy company must see such developments and offer the appropriate products and solutions at the right point in time.

As Austria’s largest electricity company, VERBUND is consistently continuing along the path to 100 % sustainable production. At present, 95 % of our electricity production is attained from renewable energies, mostly from hydropower, supplemented by wind power. VERBUND is furthermore growing its portfolio of innovative energy products and solutions: We offer support to industry clients in the managing of their energy flexibilities and efficiencies and help them to market their surpluses. Private customers can choose between the basic products of green electricity and climate-neutral gas as well as modular “eco packages” for solar power, heating and mobility and smart eco-home devices.

To sum it up: Utilities have to face manifold challenges these days: diverse political regulations, a just low carbon imperative, fast technological advances as well as new and increasing customers-demands. Our best option is to play an active role in the creation of our future so that we can continue to secure a sustainable, safe, competitive and affordable energy supply.