ENERGY: How Austria has drastically reduced imports of Russian gas

Austria is no longer heavily dependent on Russian gas. How has this happened and how will it impact Austria’s gas supplies this winter? Here’s what you need to know.

ENERGY: How Austria has drastically reduced imports of Russian gas
Wholesale gas prices are falling but Austrian households are not seeing the benefits yet. (Photo by Kwon Junho / Unsplash)

Austria’s gas supply looks very different today compared to earlier this year when Russia invaded Ukraine.

Back in February, Austria sourced around 80 percent of all gas from Russia, with 10 percent coming from Norway, five percent from Germany and the remainder from other sources.

This put Austria in a delicate position as the EU began placing sanctions on Russia and experts voiced fears about Russia turning off the gas supply to Europe. This also took place at a time when Austria’s gas reserve tanks were only around 12 percent full.

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However, as the first snowfall now covers more parts of the country, E-Control (the government regulator for electricity and gas markets) has confirmed that Austria reduced imports of Russian gas to 21 percent in September. 

The country’s gas tanks are also well stocked at just over 95 percent following a mild autumn. Although around a third of the gas belongs to neighbouring countries.

So how did this happen and where is Austria getting gas from now? The Local took a closer look to find out.

How did Austria reduce imports of Russian gas?

The biggest change to how Austria sources natural gas was by booking line capacity on pipelines that flow from Germany and Italy, reported Die Presse.

The gas now flowing to Austria is mostly coming from Norway or is liquefied natural gas (LNG).

At a recent press conference in Vienna, Johannes Schmidt from the Institute for Sustainable Economic Development, said: “Actually, it’s incredible what Europe and Austria in particular have achieved here over the summer.”

Austria’s partially state-owned OMV has also booked 40 terawatt hours (TWh) of gas transport capacity from Norway and non-Russian LNG suppliers for the period from October 2022 to September 2023. This gas is delivered to a tank in Oberkappel, Upper Austria, via Germany.

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Additionally, Austria has confirmed LNG shipments from Dubai, which further helps to boost the country’s energy security.

Picture taken on May 3, 2022 shows a general view of the largest Austrian refinery OMV at Schwechat near Vienna, Austria. (Photo by JOE KLAMAR / AFP)

A statement released from the Federal Chancellery said: “The United Arab Emirates are a strategic partner of Austria and will make a contribution to the security of supply with LNG deliveries next winter, as agreed between OMV and the Emirati ADNOC.

“Furthermore, the Austrian and Emirati governments will intensify cooperation on energy issues and climate protection.”

However, purchasing gas from new sources hasn’t been the only tactic to reduce Austria’s dependency on Russian gas.

In July, Austria and Germany finalised a solidarity agreement to secure gas flows between the two countries in the event of an energy crisis. And in September, the Austrian Federal Government launched the “Mission 11” campaign to encourage consumers to save energy. 

Finally, there are long-term plans to expand renewable energy infrastructure across Austria to reduce the overall dependency on natural gas. But the results of this part of the plan will not be seen until the coming years.

READ MORE: How expensive are gas and electricity in Austria right now?

Is Austria’s gas supply now secure?

Experts are positive about Austria’s ability to get through the coming winter without running out of gas.

However, they are now concerned about winter 2023/2024 with plans already being hashed out about how to secure gas supplies next spring and summer to fill up the tanks again.

The procurement of gas has also come at a big cost to Austria with the government spending €3.95 billion alone on securing the recently implemented strategic gas reserve of 20 percent of overall consumption, reports ORF.

And with energy prices set to skyrocket again for the next storage season, it’s likely the Austrian government will have to dig deep into the financial reserves once more in the spring.

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When will households in Austria benefit from falling gas prices?

Wholesale gas prices have returned to lower levels but households aren’t seeing the benefits – yet. Here’s what you need to know.

When will households in Austria benefit from falling gas prices?

Despite prices on the global gas markets dropping, customers in Austria will have to wait longer to see a difference in their bills.

The current price for one megawatt hour of gas is €76 – the lowest value since just before the war in Ukraine broke out in February 2022. At the end of August 2022, the cost was €342, reports the Wiener Zeitung.

However, many Austrian households have recently been told their energy bills will increase in 2023, which means the lower prices will not be passed on to consumers for some time.

READ MORE: ‘There’s not enough gas in the world’: Can Europe keep the heating on this winter?

The reason for this – according to Wolfgang Urbantschitsch, Executive Director at E-Control – is because there is a “time lag” and energy providers are now charging prices in relation to the procurement costs from last summer.

The type of contract that consumers have will also determine how quickly they see a decrease in their energy bills. Those with a market-based tariff (or variable rate) will get a reduction in costs quicker, but they are also more exposed to price increases than households with a fixed-rate tariff.

Alexander Hoor, Wien Energie spokesman, told the Wiener Zeitung that they are currently in the process of adjusting tariffs for new customers, with possible savings of up to 30 percent.

And E-Control boss Urbantschitsch added: “Now a change of provider can be interesting again under certain circumstances.”

So while for many households in Austria there will not be an immediate impact, gas bills should start to decrease over the coming months.

READ ALSO: Warm weather hits Austria’s ski season as slopes left without snow

Why are wholesale gas prices dropping?

In the months leading up to the current winter season, the Austrian government worked overtime to ensure the country’s gas storage facilities were full amid fears of a gas shortage.

However, the autumn and winter has so far been fairly mild, which has reduced the country’s gas consumption.

Plus, as there is a similar situation in many other European countries, there is less demand for wholesale gas so the prices have dropped.