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Eurofound's EU PolicyWatch collates information on the responses of government and social partners to the COVID-19 crisis, the war in Ukraine, rising inflation, as well as gathering examples of company practices aimed at mitigating the social and economic impacts.

Factsheet for measure AT-2022-49/2901 – measures in Austria

Electricity price brake

Strompreisbremse

Country Austria , applies nationwide
Time period Temporary, 01 December 2022 – 30 June 2024
Context War in Ukraine
Type Legislations or other statutory regulations
Category Responses to inflation
– Support for energy bills
Author Bernadette Allinger (Forba) and Eurofound
Measure added 15 September 2022 (updated 20 September 2022)

Background information

Due to increasing gas prices on the global market, electricity prices have risen and will be further rising in Austria, as well. In order to support households in Austria, the federal government has decided on putting a price brake at the cost of electricity. The "electricity price brake" will take effect from December onwards and is currently limited to mid-2024.

Content of measure

The "electricity price brake" will cap the price of electricity for all households up to a mark of around 2,900 kwH at 10 cents per kWh. According to the government, the threshold of 2,900 kWh was taken as it corresponds to around 80% of the average electricity consumption in Austrian 3-person-households. For all electricity used up to this threshold, thus only 10 cents per kWh are to be paid, with the rest taken over by the government (the government subsidy lies at an upper level of 30 cents, though, so if the electricity provider charges more than 40 cents per kWh, the rest after the 30 cents subsidy have been deducted must be borne by the user). All electricity consumption above this threshold is to be paid for at the current market price (i.e. not subsidised).

It is expected that the measure will relieve every household by €500 per year on average. In addition, around 300,000 low-income households will be compensated with €200 extra for grid costs.

For households with four or more persons, it was announced that a further funding programme may become available.

Use of measure

All private households (around 4 million) will be affected by this measure.

Target groups

Workers Businesses Citizens
Does not apply to workers Does not apply to businesses Applies to all citizens

Actors and funding

Actors Funding
National government
National funds

Social partners

Social partners' role in designing the measure and form of involvement:

Trade unions Employers' organisations
Role No involvement as case not in social partner domain Consulted
Form Not applicable Direct consultation outside a formal body

Social partners' role in the implementation, monitoring and assessment phase:

  • Only employers' organisations
  • Main level of involvement: Sectoral or branch level

Involvement

The sectoral employer organisations were involved in the design of the measure.

Views and reactions

The General Secretary of Oesterreichs Energie, the sectoral employer organisation, describes the proposal for the electricity cost subsidy as a “good solution that enables quick and unbureaucratic support for customers”. The proposed starting date with 1 December 2022 is seen as ambitious by the sectoral industry, due to the suppliers having to make the necessary adjustments in time. Organised labour welcomes the price brake as an important step, but demand that there should be a similar subsidy for heating.

Sectors and occupations

    • Economic area Sector (NACE level 2)
      D - Electricity, Gas, Steam And Air Conditioning Supply D35 Electricity, gas, steam and air conditioning supply

This case is not occupation-specific.

Sources

  • 05 September 2022: Oesterreichs Energie sees the previously known cornerstones of the "electricity price brake" as a good solution (oesterreichsenergie.at)
  • 07 September 2022: Government announces electricity price brake (orf.at)
  • 16 September 2022: FAQs on the electricity price brake (wien.arbeiterkammer.at)

Citation

Eurofound (2022), Electricity price brake, measure AT-2022-49/2901 (measures in Austria), EU PolicyWatch, Dublin, https://static.eurofound.europa.eu/covid19db/cases/AT-2022-49_2901.html

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