Austria will spend €750 million to lower industrial electricity costs
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The Austrian government will provide €750 million from 2027 to 2029 to reduce electricity costs for energy-intensive businesses.
Minister Wolfgang Hattmannsdorfer announced the expansion of the Electricity Cost Compensation Act (SAG) and a new industrial electricity price as part of a broader industrial strategy. The new industrial electricity price will apply to around 400 companies, lowering their electricity costs to as little as five cents per kilowatt-hour for up to half of their consumption.
Alongside this price reduction, the government intends to broaden the scope of the existing SAG from approximately 60 businesses to around 120. This expansion will include companies in sectors like food, wood, pharmaceuticals, plastics, glass, electronics, semiconductors, and batteries, in addition to existing industries like steel, aluminum, paper, and chemicals. Together, the two programs aim to support over 500 businesses. The government is linking the financial support to specific requirements.
Companies receiving funds must reinvest half of the aid into energy efficiency, environmentally friendly production, or electrification, prioritizing European value creation. Businesses receiving over €2 million annually through the industrial electricity price must also maintain at least 90 percent of their workforce, with funding potentially reduced for significant staff cuts unless justified by economic circumstances. Furthermore, Austria plans to implement an automatic crisis mechanism to address sharply rising electricity prices.
This mechanism will activate if wholesale prices exceed €165 per megawatt-hour for three consecutive months, and household electricity prices rise above 16.5 cents per kilowatt-hour. The E-Control regulatory agency will monitor these prices monthly, and if triggered, the system will automatically provide relief to households, businesses, schools, hospitals, and other public institutions using funds from an existing energy crisis contribution.
