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ENERGY

UPDATED: Will Austria have enough gas for this winter?

Austria's gas storage tanks are filling up as gas consumption remains low. Here's what it means for the coming winter season.

Chancellor of Austria Karl Nehammer speaks to the press as he arrives to attend an European Union Summit with all 27 EU leaders at The European Council Building in Brussels on December 16, 2021. - The lightning spread of Omicron in Europe and elsewhere has added a sense of urgency to an EU summit on December 16, 2021, with leaders struggling to present a united, bloc-wide approach. (Photo by Kenzo Tribouillard / various sources / AFP)
Chancellor of Austria Karl Nehammer says cash payment options should be constitutionally guaranteed. (Photo by Kenzo Tribouillard / various sources / AFP)

On Tuesday, Austria’s Climate Ministry confirmed the country’s gas storage tanks are now 80 percent full. 

The milestone was reached one month ahead of schedule and the amount is equivalent to the country’s average gas usage during a winter season.

Austria reached the target amount after more Russian gas flowed into the country than is currently being consumed, which means the storage levels will continue to increase.

READ ALSO: Energy costs: Vienna to support 200,000 households with up to €500

In a statement, Chancellor Karl Nehammer said: “We pulled out all the stops to fill our large storage facilities and create this security of supply. 

“Today, we can say we are well prepared. Our storage facilities are 80 percent full and continue to fill up.”

Nehammer also confirmed that Austria’s dependence on Russian gas has been reduced from 80 percent to 50 percent, reports the Kronen Zeitung.

But despite the good news, Energy Minister Leonore Gewessler (Greens) said the situation “remains tense”, adding that Russia is not a “reliable counterpart”.

Earlier this year, the Austrian Federal Government set the 80 percent target to ensure the gas supply for the winter months amid fears the gas supply could be disrupted.

FOR MEMBERS: READER QUESTION: When should I turn on my heating in Austria this year?

Even the storage facility at Haidach (the Salzburg-Upper Austrian site that borders Bavaria in Germany) is filling up after RAG, the largest gas storage operator and energy storage company in Austria, overtook management in August. Previously, Haidach was managed by Russia’s Gazprom unit and the facility had not been refilled since last winter.

This is good news for Austria as Tyrol and Vorarlberg’s gas supply comes from Bavaria, reports Der Standard.

How much gas can Austria store?

Austria can store 90 terrawatt hours (TWh) of gas when the storage tanks are full.

READ ALSO: ‘Mission 11’: Austrian government reveals tips on how to save energy and fuel

However, only around half of the gas stored in Austria is for domestic consumption because gas for Slovenia and Germany is stored in Austria. 

According to ORF, Austria recorded 77 TWh of gas in storage on October 2nd. Last winter, Austria’s gas consumption from October 2021 to March 2022 was around 65 TWh.

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ENERGY

EXPLAINED: Why are gas prices still so high in Austria?

Austrian households are paying more for gas than elsewhere in Europe. So why are prices so high?

EXPLAINED: Why are gas prices still so high in Austria?

Gas prices in Austria reached their highest peak in early 2023 and have since remained at around the same level.

The significant increase in gas prices in the country sets it apart as a special case compared to other European countries. The reasons behind this situation lie in a combination of different factors, including the dominance of a few suppliers, increased margins of energy suppliers, and customers unwilling to change suppliers or because they are locked into long-term contracts.

Here we go into detail about the different factors.

Dominant suppliers

The energy market in Austria is dominated by a few state-owned or semi-state-owned suppliers, such as Wien Energie, OMV, and EVN. This lack of competition allows the dominant suppliers to control pricing, potentially leading to higher prices for customers.

Increased margins of suppliers

It has been possible for Austrian energy suppliers to increase their profit margins in response to the rise in gas prices. They have adjusted their pricing indexes to correspond to the higher cost of gas, and therefore maintained or sometimes even increased their profit margins.

READ MORE: Where in Austria will electricity and gas prices rise and fall in 2024?

Delayed price adjustment

The fluctuations of gas prices in Austria are passed on to customers but there is a longer delay compared to other European countries.

This delay, in combination with long contract lock-ins and backward-looking pricing, creates a situation where customers may continue to pay a higher price even if the market prices drop. For example, in autumn 2023, Wien Energie made an offer to its gas customers if they committed for one year. Since then, gas prices have decreased, but the customers were still locked into their contracts.

Low customer switching rate

Customers in Austria show low willingness to change energy suppliers. This results in them sometimes staying with their current provider despite higher prices, a situation which reduces competition in the market and allows suppliers to maintain higher prices.

Impact of gas supplier contracts

Even if long-term gas supply contracts with Russia may have been intended to secure cheaper gas prices, market changes and disturbances in supply have led to increased costs for energy suppliers and thereby also for customers.

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