Austrian electricity market model

With the deregulation of the energy markets in Europe, electricity consumers are free to choose their suppliers in the market and to conclude flexible supply agreements. Electricity can be traded directly between producers and consumers or with brokers acting as intermediaries (over-the-counter or OTC trading). Additionally, trading via exchange has been gaining more popularity. Here electricity producers, traders, and consumers submit offers to sell or buy electricity. The exchange then reconciles demand and supply curves (clearing), thus calculates prices and quantities.

Balancing groups: for a balanced electricity account

For technical reasons and to ensure frequency and voltage stability, the volume of electricity produced and therefore fed into the grid must always be the same volume as withdrawn by the consumers. 

Producers and consumers are grouped into what are known as balancing groups. Each balancing group is obliged to balance consumption and generation of energy within the group. In the event of unforeseen generation fluctuations (e.g., due plant outages, changing wind speeds in the case of wind power etc.) or deviations from the expected consumption level, the balance in the grid must be guaranteed by the control area operator. This can be done by connecting or disconnecting generation units (e.g., special backup power plants). The costs of these balancing measures are charged to the balancing group in which the imbalance occurred (imbalancing energy).

Imbalance energy 

Imbalance energy is defined as the difference between the agreed schedule value and the actual purchase or supply of the balancing group per defined measurement period. In Austria, these imbalances are determined and billed through an independent Balance Group Coordinator; for the APG control area this is APCS Power Clearing and Settlement AG.

The price of  imbalance energy is determined by the Balance Group Coordinator (BGC) APCS. The imbalance energy price is calculated for negative imbalances as the maximum of either the weighted average price of positive activated balancing energy, the exchange price indicator or the scarcity element; for positive imbalances, it is calculated as the minimum of either the weighted average price of negative activated balancing energy, the exchange price indicator or the scarcity element. The weighted average price of activated balancing energy is determined based on the balancing energy activated for Austria (automatic Frequency Restoration Reserve (aFRR), manual Frequency Restoration Reserve (mFRR)).

The current imbalance energy pricing system in Austria was implemented when the Regulation (EU) 2017/2195 establishing a guideline on electricity balancing went into force. The aim of the new system was to adapt the previous rules to European requirements and thereby ensuring an incentive effect of  imbalance energy prices on balancing groups. APG had an expert opinion drafted in preparation for the required changes. Besides the new pricing system, an additional settlement mechanism was introduced, which is now used for charging mFRR costs (tertiary reserve).

The current arrangements for electricity balancing are documented in the General Conditions for the Balance Group Coordinator (AB-BKO).

At the request of market participants, APG publishes indicative imbalance energy prices for the APG control area in a 15-minute resolution. You can find this data under Market transparency.

Grid fee model 

To cover costs incurred by a grid operator for operating and maintaining the grid, the grid operator charges all connected grid users service fees related to the transportation of electricity. This so-called system use fee is determined by E-Control, the Austrian electricity regulator, depending on the voltage level. 

Electricity grids provide the transportation infrastructure for electricity. Since it is economically inefficient to build a second grid net next to the current one, this sector is a natural monopoly and therefore regulated by the national regulatory authority E-Control. Costs cannot be charged directly to end-consumers but are covered with grid tariffs defined by E-Control. On the other hand, energy suppliers, which produce and sell electricity and use (but do not provide) the grid, face a competitive market and charge their costs directly to energy consumers. In the end, consumers have to pay the purchased energy and a tariff for the usage of the grid.

Within the scope of grid tariffing, the Austrian electricity grid was divided into seven grid levels, starting with grid level 1, which consists of the 220-kV and 380-kV grids of APG, TINETZ-Tiroler Netze GmbH and Vorarlberger Übertragungsnetz GmbH, through the subordinate 110-kV to 400-V grids, to which most end consumers (e.g. households) are connected.

 

The settlement of grid usage also occurs between grid operators. Grid operators include their costs in a usage fee which is charged to further downstream networks or end consumers. Therefore, these costs are only a transitory item for the grid operator. The grid fees are charged either according to energy, i.e., the amount of kilowatt hours (kWh) consumed, or by unit of capacity in kW. The charges for using APG’s grid level 1 have several components: gross fee, net fee (divided into a energy component and a capacity component) as well as charges for system services and grid losses.

The current system charges can be found on the E-Control website. 

Further information 

Further information on the Austrian electricity market model can be found on the E-Control website. You will also find the Guidelines for entering the electricity market at E-Control.  

To establish a new balancing group in the APG control area, please contact APCS Power Clearing und Settlement AG directly.  

Information on the key legal principles of the Austrian and European electricity market can be found under “Legal framework”.