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Austrians warned as country remains dependent on Russia for gas supplies

Despite almost two years of Russia's war against Ukraine, Austria continues to receive over half of its natural gas supplies from the aggressor, according to new data.

Published: 20 November 2023 11:06 CET
Austrians warned as country remains dependent on Russia for gas supplies
A worker operates equipment at the Baumgarten an der March in Lower Austria, that receives natural gas from Russia. Photo: JOE KLAMAR / AFP

Sixty percent of natural gas used in Austria is sourced Russia, according to data from the nation’s energy regulator, E-Control. That figure rose to around eighty percent in September, echoing pre-war levels, 

The continued reliance on Russian gas is due to an existing supply contract between the Austrian government and the state-owned Russian energy company, Gazprom. It is not known whether an exit from this contract was attempted since the outbreak of the war. 

In a DPA interview with Walter Boltz, the head of E-Control. Indicated that this reliance on Russian natural gas leaves the country open to the risk of supply issues. should the conflict affect the pipelines bringing gas from Ukraine.

“That then results in high prices”, he said. 

He also warned that regional energy providers could find themselves in for a shock.

“I have the impression that the companies are burying their heads in the sand and hoping that things won’t get that bad,” he said.

Despite Boltz’s warnings, the head of E-Control’s gas department, Carola Milgramm, stated that she believes that Austria’s gas supply would remain secure throughout the coming winter, and in the case of emergency, enough gas could be sourced from existing pipeline connections to Germany and Italy.

Together with the former head of state-owned energy company OMV, Gerhard Roiss, Boltz criticised Austria’s lack of action in expanding those pipeline connections to Germany. Following international criticism, Austria’s neighbour divested from Russian natural gas in mid-2023, and now sources it mostly from Norway.

Austria has long been seen as having close uncomfortably close links with Russia. Several politicians have been condemned for their close links to Gazprom and government figures in Moscow, with former Foreign Minister Karin Kneissl even pictured dancing with Russian President Putin at her 2018 wedding.

Furthermore, Austrian Chancellor Karl Nehammer is the only western leader to have visited the Russian capital since the war began, and members of several parties walked out when Ukrainian President Volodymyr Zelenskyy addressed federal parliament earlier this year. 

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ENERGY

Can Austria do more to tackle soaring energy prices?

Gas and electricity prices continue to rise in Austria - more persistently than in the rest of Europe. Is there anything the government can do about it?

Published: 7 June 2024 16:19 CEST
Can Austria do more to tackle soaring energy prices?

Energy prices in Austria have skyrocketed, with costs for natural gas surging by over 160 percent between April 2021 and April 2024. These soaring energy expenses have been a significant driver of inflation in the country. They have also placed a heavy burden on households and companies, affecting their financial stability. 

Despite the government’s introduction of measures such as an electricity price brake, the issue remains unresolved.

According to the Austrian Institute of Economic Research (WIFO), the energy industry in Austria suffers from a lack of competition and the different expectations between politicians and the public owners of the energy companies. 

“In the energy industry, there is a conflict of objectives that has not been taken seriously enough to date between the high dividends expected by public owners and the low electricity prices promised by politicians, as well as the extremely attractive salaries that employees in the energy industry are accustomed to”, WIFO said, according to Die Presse.

READ ALSO: How to save money on energy bills in Austria

“Competition has so far fallen by the wayside in Austria, and consumers have paid for this through (excessively) high energy prices”,” WIFO added.

What can the government do about this?

The centre-right ÖVP and Greens coalition wants to approve an amendment to ensure more competition in the sector. 

The proposed amendment by the ÖVP and Greens coalition aims to foster more competition in the sector. Under this plan, providers of electricity, district heating, and natural gas that are significantly more expensive than their competitors will be required to justify their high prices. Failure to do so will result in a decision by the cartel court.

The liberal party NEOS told Die Presse that the amendment was not enough. They call for the country’s competition authority to be strengthened and more price authority with monthly reports. 

READ ALSO: What are the rules for electric bikes in Austria?

The amendment would “not end the dominance of the provincial energy suppliers, who do not pass on the lower energy prices”, Neos energy spokesperson Karin Doppelbauer said. This “unholy alliance between state-controlled energy companies and the public sector endangers purchasing power and prosperity in Austria.”

However, according to WIFO, Austria still needs to fortify its economy against another fossil fuel price shock. The report underscores the potential benefits of this transition, stating that it can only be achieved by enhancing resilience and swiftly transitioning to a climate-friendly economy. 

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