Free Electricity Market In 300 Days


On October 1, 2001 – as provided for by the new ElWOG – the power market in Austria will be opened completely.

Then each Austrian may choose his or her own supplier freely. “If all participants in politics and the energy industry work together, the required technical and administrative conditions can be created in the remaining 300 days”, explained Dr. Herbert Schröfelbauer, Deputy Chairman of the VERBUND Board of Management, Austria’s biggest power supplier, at a press conference in Vienna today, Wednesday.

Mr. Schröfelbauer: “The VERBUND is fit for the new power market. We have ‘done our homework’ and have been able to adapt to the new model of the Austrian electricity industry in good time.“

In Austria’s new electricity market, based on the principle of separation of network and trading following the Scandinavian model, two important key roles are still missing: The most important steps following the announcement of the new Electricity Industry and Organization Law (ElWOG 2000), to be expected soon, are the appointment of the power market regulator and the establishment of the clearing centre for compensating power.

“Should these institutions be established by the beginning of the year 2001, which we hope“, says Mr. Schröfelbauer, VERBUND Director of the Board of Management and also responsible for technical matters, “a punctual start for the full liberalization of the domestic electricity market is guaranteed from the technical standpoint.“

VERBUND itself has created several conditions to guarantee its timely integration in the new electricity market model. Separate companies for production (Austrian Hydro Power), transportation (Austrian Power Grid) and trading (Austrian Power Trading) have been established, surpassing the EU directive.

Together with banks and the “smart technologies“ software company as majority shareholder, Austrian Power Grid (APG) as minority shareholder founded the Austrian Power Clearing & Settlement GmbH. (APCS) company, which applies for a license for settlement of power-compensation energy. That is the difference between the electric energy actually put into the grid by the suppliers (power plants, imports) and the quantities taken by its customers (end users, exports).

VERBUND, not least, is also participating in a large-scale field trial together with 56 other energy suppliers in which the clearing model for compensation energy has been tested – successfully so far.

“The power grid will be as safe as before in the free market“, explained Dr. Robert Hager, Chief Executive of Austrian Power Clearing & Settlement (APCS). “The individual electricity consumer cannot change his network provider; the latter is under statutory obligation to provide a safe network and subject to supervision by the electricity market regulator, which determines the grid rates (analogous to the basic charge for the telephone “, explained Mr. Hager. “However, each customer may choose who is to supply the merchandise electricity, i.e. the most cost-effective kilowatt hour, to him (analogous to the call charge per minute).“

According to Mr. Hager, filling in a form at a dealer’s, e.g. a supermarket chain or in the Internet will suffice to change the power provider. All further steps and measures will be taken by the electricity industry.

“Our field trial, in which we integrate the 57 participants in our clearing model, has been running well so far“, said Mr. Hager. “Within our time horizon the remaining power suppliers should be integrated as of March 2001– provided the license is granted. In July, the test operation of the total system would have to be started at any rate. Then we shall be on the right track to the start on October 1, 2001.

In Austria there are about 4 million electricity meters in private households and other small consumers. For the free electricity market no new electricity meters will be possible in most cases, Dr. Reinhard Haas from the Institute for Energy Industry of the Technical University of Vienna said. Enough experiences on the practical load path lines have been gathered so that the supplier can be changed quickly using standardized load profiles.