Commission approves Austrian scheme to support security of electricity supply

Silhouettes of high-voltage power lines against a vibrant sunset.
(Credit: Unsplash)

This article is brought to you in association with the European Commission.


The European Commission has approved, under EU State aid rules, an Austrian scheme to safeguard security of electricity supply.

The scheme will support security of electricity supply for a period of 5 years starting in October 2026. It is an extension and update of the existing network reserve that was approved in 2021 and will end in 2026. Among various technical changes, the new scheme includes monthly contracts and other updates designed to increase participation of smaller resources, in particular electricity consumers that can provide demand response by reducing energy use.

The scheme will support electricity capacity that remains in reserve outside the market and is ready to be activated by the system operators whenever there is insufficient transmission capacity to match generation and demand (‘transmission congestion’).

Where there is transmission congestion, system operators turn off capacity in oversupplied parts of the bidding zone, and turn on capacity in parts of the bidding zone where there is a deficit.

Under the scheme, one of the Austrian transmission system operators, Austrian Power Grid AG (APG), will pay operators of power plants that have notified their intention to close down their plants, but which are relevant to keep the electricity system in balance, for remaining available to the network. The scheme will also be open to electricity storage facilities and demand-response providers. The subsidised capacity must remain available and be located in parts of Austria or neighbouring countries where it can help manage transmission congestion. The aid will take the form of direct grants paid per megawatt of available capacity held in the reserve, as well as payments to cover operating costs when capacity is activated. The costs of the scheme will be recovered from consumers in locations where there is a capacity shortfall, via network charges on consumer bills.

The aid will be granted via a competitive bidding process, unless the Austrian energy regulator identifies that such a bidding process would be insufficiently competitive, in which case the aid would be allocated based on each beneficiary’s specific costs.

The Commission’s assessment

The Commission assessed the scheme under EU State aid rules, in particular Article 107(3) of the Treaty on the Functioning of the European Union (‘TFEU’), which enables Member States to support the development of certain economic activities subject to certain conditions, and the Guidelines on State aid for climate, environmental protection and energy (‘CEEAG’).

The Commission found that:

  • The scheme was designed following a public consultation and targets a clearly identified and properly quantified security of supply objective.
  • The scheme is necessary and appropriate to achieve the objective pursued.
  • The scheme is proportionate as the aid will be provided via a well-designed, open and non-discriminatory competitive bidding process or an alternative regulated approach. In addition, distortions of energy markets are minimised, as the capacity funded is held outside of the electricity markets.
  • Austria will evaluate the scheme and is investing in additional transmission infrastructure and implementing various reforms designed to limit future network congestion needs.
  • The scheme brings about positive effects that outweigh any potential distortion of competition and trade in the EU.

On this basis, the Commission approved the Austrian scheme under EU State aid rules.

Background

The Commission’s 2022 CEEAG provide guidance on how the Commission assesses the compatibility of environmental protection, including climate protection, and energy aid measures which are subject to the notification requirement under Article 107(3)(c) TFEU.

The Guidelines create a flexible, fit-for-purpose enabling framework to help Member States provide the necessary support to reach the European Green Deal objectives in a targeted and cost-effective manner. The rules involve an alignment with the important EU’s goals and targets set out in the European Green Deal and with other recent regulatory changes in the energy and environmental areas and cater for the increased importance of climate protection. They include sections on energy efficiency measures, aid for clean mobility, infrastructure, circular economy, pollution reduction, protection and restoration of biodiversity, as well as measures to ensure security of energy supply, subject to certain conditions.

Electricity transmission congestion occurs when generation in one location cannot be transported to another location where there is demand. Electricity transmission lines in Europe are increasingly congested due to a combination of the maintenance of large bidding zones (geographic areas in which a single electricity price is formed, assuming no transmission constraints) and increasing shares of variable renewable electricity generation which require additional transmission to be transported.

Demand response is a change in the power consumption of an electricity consumer. A reduction in electricity consumption can have the same effect as an increase in electricity generation, in terms of achieving a balance between electricity supply and demand, so demand response can play an important role in measures for security of electricity supply.

The European electricity market is arranged in bidding zones, which are geographical areas in which electricity trading takes place, ignoring transmission limits. Austria comprises a single bidding zone. Once the market has cleared, system operators need to ensure that the result of the market can be put into operation. If there is transmission congestion, the system operators generally need to turn off capacity in oversupplied parts of the bidding zone and turn on capacity in other parts of the bidding zone. The EU Electricity Regulation establishes rules to ensure the functioning of the internal market for electricity and includes a bidding zone review process that may in future lead to a reduced need for active congestion management and measures like the network reserve.

For More Information

The non-confidential version of today’s decision will be made available under the case number SA.113090 in the State aid register on the Commission’s competition website once any confidentiality issues have been resolved. New publications of State aid decisions on the internet and in the Official Journal are listed in the Competition Weekly e-News.


Discover more from The European Sting - Critical News & Insights on European Politics, Economy, Foreign Affairs, Business & Technology - europeansting.com

Subscribe to get the latest posts sent to your email.

Interesting reads

© UNFPA Palestine A woman and two children walk near the city of Jenin in the West Bank.

900 obstacles and counting: West Bank families trapped as aid access shrinks

This article is published in association with United Nations. Humanitarians continue to provide life-saving assistance to people across the Occupied Palestinian Territory despite facing obstacles such as checkpoints, instability and access restrictions, the United Nations said on Friday.  In the West Bank, aid partners warn that their work “is being delayed and limited by a network […]
© UNICEF/Eyad El Baba A nine-year-old girl outside her damaged home in Nuseirat camp in central Gaza.

Gaza: Destruction of buildings rises by nearly 10 per cent since ceasefire

This article is published in association with United Nations. New satellite assessments show the destruction of buildings in Gaza has climbed by nearly 10 per cent since October’s faltering ceasefire between Hamas and Israeli forces aim to end the two-year war, which reduced cities to rubble and displaced more than one million people, UN agencies said […]
© SOS Méditerranée/Anthony Jean A team completed a rescue mission, saving 98 people from a dangerous journey in the central Mediterranean region in 2020. (file)

Migrant deaths climb sharply in 2026, new UN data shows

This article is published in association with United Nations. Severe weather, war, economic pressure and shifting policies reshaped migration journeys across multiple regions in the first four months of 2026, driving a surge in deaths, according to new data released on Wednesday by the International Organization for Migration (IOM). The agency’s newest route-based data shows a […]
© UNFPA Emergency responders walk through a debris-strewn street in Quibdó in northern Colombia following the earthquake.

UN continues scaling up response to earthquake in Colombia

This article is published in association with United Nations. The UN on Wednesday continued scaling up assistance to areas affected by the deadly earthquake that hit Colombia two days earlier. Tweet URL https://platform.twitter.com/embed/Tweet.html?creatorScreenName=UN_News_Centre&dnt=false&embedId=twitter-widget-0&features=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%3D%3D&frame=false&hideCard=false&hideThread=false&id=2087424955390865660&lang=en&origin=https%3A%2F%2Fnews.un.org%2Fen%2Fstory%2F2026%2F08%2F1168128&sessionId=9eb4055aa89180f054a0f5e31c06fbfd46ddaf0c&siteScreenName=UN_News_Centre&theme=light&widgetsVersion=6a3ad42b224df%3A1778106238597&width=550px According to latest official figures, the 7.4 magnitude quake has left more than 200 dead and injured over 2,500, said UN Deputy Spokesperson […]
© UN News/Isaiah Steinberg Participants gather at the Youth and AI Summit at UN Headquarters in New York.

Youth advocates gather in New York to launch new AI standards

This article is published in association with United Nations. As artificial intelligence (AI) rapidly transforms everything from how we learn, to the job market, children are adopting the technology more than three times faster than adults – exposing them to unique opportunities and risks. The UN hosted more than 600 young people from around the world on […]
© ILO/Marcel Crozet A street seller in Kisumu, Kenya. "“A generation that cannot find decent work cannot build its future with confidence,” said UN labour agency chief Gilbert Houngbo.

After post-pandemic improvement, youth unemployment is rising again

This article is published in association with United Nations. Frustrated by skyrocketing youth unemployment, among other issues, tens of thousands of Gen Z activists took to the streets of Nepal last year, demanding a stake in the country’s economic growth. The protest worked and the prime minister resigned. A new report published Tuesday by the UN’s International […]
This article is published in association with United Nations.

World marks second warmest July on record

This article is published in association with United Nations. As multiple regions contend with unbearable heat, drought, wildfires and other extreme weather, the World Meteorological Organization (WMO) on Tuesday underlined the crucial need for stronger forecasts and early warning systems to protect lives and livelihoods.  The UN agency said the past month was the second warmest July on record worldwide, according to the […]
UNIFIL UNIFIL continues to supply local communities with essentials.

Lebanon: UN peacekeepers count hundreds of Israeli strikes and incursions in a single weekend

This article is published in association with United Nations. Israeli forces fired 455 projectiles into south Lebanon and breached Lebanese airspace 97 times between Friday and Sunday, the UN’s peacekeeping mission in the country reported Monday – among the heaviest fire seen in months. UNIFIL said Saturday alone accounted for 229 of those projectiles, the highest […]
© WHO/Josua Mulala Raymond A health worker is disinfected at an Ebola treatment centre in the eastern DR Congo.

Ebola in DR Congo: Childhood deaths rise; hopes raised over new vaccine

This article is published in association with United Nations. More than 300 children have died in the Ebola outbreak in the eastern Democratic Republic of the Congo (DRC), the UN said on Friday, as health experts urged trials of the only vaccine against the disease to halt further spread of the rare Bundibugyo species. Children and […]
PAHO/WHO The coastline of Havana, Cuba. The country is grappling with severe fuel shortages and blackouts following oil import sanctions imposed this year by the US.

Cuba: Independent experts condemn new US sanctions as humanitarian crisis deepens

This article is published in association with United Nations. Independent UN human rights experts on Thursday condemned a fresh round of US sanctions against Cuba, calling them an attempt to force change on “a sovereign State through threats and coercion.” The Human Rights Council–appointed group of experts warned that without swift action from the international community […]
© UNOCHA Local residents pass a severely damaged apartment building and an overturned car in a residential area in Kyiv, Ukraine.

‘A clear violation’: Guterres deplores deadliest attack on Kyiv this year

This article is published in association with United Nations. UN Secretary-General António Guterres condemned on Wednesday the deadliest Russian strikes on Kyiv this year, which killed 17 people and caused extensive damage to civilian infrastructure overnight. On the heels of the deadliest month for Ukrainian civilians since the early days of the war, Mr. Guterres expressed concern that […]
© UNICEF/Oleksii Filippov Families shelter in a Kyiv metro station during an overnight air-raid on the Ukrainian capital.

UN reports deadly month for Ukrainian civilians as Russian attacks intensify

This article is published in association with United Nations. Russian forces hammered Ukraine with ballistic missiles and long-range drones overnight on Tuesday, killing at least 17 civilians – mainly around Kyiv – and injuring another 44, the UN human rights office in Ukraine reported. The latest Russian attacks mark an increasingly deadly escalation in the ongoing war, […]
© UNICEF/Oleksii Fili Local residents wander among debris following a Russian missile attack in Kyiv, on 19 July 2026.

‘A playground, a beach, a home’: UNICEF demands end to child deaths in Russia-Ukraine war

This article is published in association with United Nations. As Russia’s invasion of Ukraine continues, with both sides stepping up airstrikes and drone attacks in recent weeks deep inside each other’s territory, the UN Children’s Fund (UNICEF) appealed on Tuesday for greater protection for the war’s youngest victims. “Over the past several days, children have again […]
Commission starts enforcing AI Act rules and new transparency requirements on 2 August

Drone strikes threaten civilians and aid operations in Sudan

This article is published in association with United Nations. Drone strikes are posing deadly risks to civilians in Sudan and hampering humanitarian efforts to reach them as attacks continue to affect conflict-hit areas, the UN aid coordination office OCHA said on Monday. The warning came a day after a deadly reported strike in the village of Ghara al […]

Recovery in Ukraine, one life at a time

This article is published in association with United Nations. In classrooms, maternity wards, hospital corridors and local communities across Ukraine, people are rebuilding their lives despite the ongoing war. In the frontline village of Bezruky which sits in the Kharkiv region – just half an hour’s drive from the Russian border – the local school took […]
© WFP/Maxime Le Lijour The majority of homes in Gaza are still barley habitable.

Middle East crisis: Humanitarian fallout ‘worsening by the day’

The humanitarian toll is mounting as fighting continues in the Middle East beyond strikes and counterstrikes between the US and Iran, the UN aid coordination office OCHA warned on Thursday, with civilians increasingly at risk and essential infrastructure disrupted in several countries across the region. “The humanitarian consequences of the Middle East escalation are worsening […]
© UNODC/Laura Gil A desk in a scam centre lies empty after being raided by the authorities in the Philippines.

Forced online scams: IOM warns trafficking networks are booming

This article is published in association with United Nations. A job advert can hide a criminal network, and a single click can lead to a nightmare. Hundreds of thousands of people are trafficked every year on the promise of legitimate work abroad, only to be held captive and forced into online scam operations. The UN International […]
©Unsplash /Michael Held A wildfire burns on the hills of Estreito da Calheta, Portugal. (file)

Climate alarm ‘blaring from every direction’

This article is published in association with United Nations. Climate-driven disasters are reaching “nightmare proportions” due to humanity’s “addiction” to fossil fuels, a top UN official warned on Tuesday. “The climate alarm is blaring from every direction,” said UN Climate Change Executive Secretary Simon Stiell in a statement. “With the mercury set to soar again this […]
© UNICEF/Ninja Charbonneau A woman and child walk past destroyed buildings in Homs, Syria.

Syria’s hopes for renewal hinge on rebuilding trust, lives and livelihoods

This article is published in association with United Nations. A country long known as a meeting point of civilizations, Syria stands once again at a crossroads. Across Syria, the scars of war remain etched into communities that have endured years of violence, displacement and loss.  Yet amid the devastation, hopes are also taking root, hopes for […]

Why don't you drop your comment here?

Go back up

Discover more from The European Sting - Critical News & Insights on European Politics, Economy, Foreign Affairs, Business & Technology - europeansting.com

Subscribe now to keep reading and get access to the full archive.

Continue reading

Discover more from The European Sting - Critical News & Insights on European Politics, Economy, Foreign Affairs, Business & Technology - europeansting.com

Subscribe now to keep reading and get access to the full archive.

Continue reading

The European Sting – Critical News & Insights on European Politics, Economy, Foreign Affairs, Business & Technology – europeansting.com