The International Energy Agency's 2002 review of Austria's energy policies and programmes. This review finds that in the four years since the last in-depth Review, the two most important developments in the Austrian energy sector have been market reform in the electricity and natural gas sectors, and the efforts made toward meeting the country's emissions reduction targets under the Kyoto Protocol. Austria's security of supply is enhanced by extensive cross-border trading and recent efforts to diversify natural gas import supply sources. A regulatory framework now allows all customers to choose their natural gas and electricity suppliers. Austria has established an independent regulator and non-discriminatory third-party access rules. While reform of the gas sector is too recent to draw any meaningful conclusions, power sector reform has achieved mixed results. Industrial rates have fallen by up to 40% but residential rates have fallen little, if at all. Effective competition still faces obstacles including high system access charges and dominant incumbent suppliers who could wield market power and deter new entrants. Austria's commitment to reduce greenhouse gas emissions by 13% remains a major challenge. Total greenhouse gas emissions increased nearly 2.5% from 1990 to 2000 with CO2 emissions rising 9% over the same period. The finalisation of a comprehensive climate change strategy in 2002 is an important step forward. Austria's planned use of Kyoto flexible mechanisms could cut the costs of its climate change efforts, although the macroeconomic effect of all emission reduction measures requires constant monitoring. The support scheme for renewable energy and combined production of heat and power could be rendered more cost-effective, if a degression scheme were employed to lower support levels gradually. Read more...
