Electricity price hikes ahead

An energy sector expert has warned that electricity prices will climb further.

The Austrian Energy Agency said today (Thurs) its price index for next month was 7.6 per cent higher than figures of July 2010. It added that the index rose from June 2011 to July of the same year by 1.7 per cent. These developments mean that households must brace themselves for higher electricity prices in the foreseeable future.

Austria is, as most of Europe, engulfed in an intense debate about the future of energy supply as a growing number of countries abandon nuclear power technology.

There are no operating nuclear technology plants on Austrian soil as such a facility located in Zwentendorf, Lower Austria, never went into operation. The plant was built in the 1970s. A narrow majority rejected plans to generate electricity with it in a referendum in 1978. However, six per cent of energy used by Austrian households and companies last year were generated using nuclear technology.

Low-budget providers buy electricity produced at nuclear power plants abroad to keep their prices low. More and more Austrian providers have vowed to stop purchasing nuclear electricity owing to the change of mentality after the nuclear disaster in Fukushima, Japan, around three months ago.

Experts have warned electricity prices will edge up across the continent in the coming years when Germany – Europe’s most powerful economy and the major consumer of energy – shuts down its 17 nuclear power plants step by step until 2022.

Wolfgang Anzengruber, the head of Austrian energy sector top dog Verbund AG, has questioned the federal government’s plan to become autarkical as far as Austria’s demand for electricity is concerned. Social Democrats (SPÖ) and the People’s Party (ÖVP) recently said they wanted to raise the share of wind and hydro power by 10 per cent to 80 per cent by 2020 to make Austria independent from energy imports.

Anzengruber argued that such a move would disconnect Austria from all sorts of energy sector trade. He said in a live radio debate yesterday such a measure would also contradict the current creation of the Nabucco pipeline transporting gas from Eurasian states to Europe. The pipeline’s destination will end in Lower Austria. However, the project has been thrown back by several delays over the years. Most recent plans have it to put it into operation in 2017.

Meanwhile, energy sector watchdog E-Control said gas providers must not give the ongoing debate about a possible widespread farewell to nuclear energy as a reason for their price hikes. E-Control revealed last month Austrian households have been forced to pay between seven and 20 per cent more for gas in the recent weeks although trade prices on the global market rose by only five per cent at the same time.