With our Corporate Energy @TW series, we aim to highlight current developments and issues in the renewable energy sector across different jurisdictions. Taylor Wessing’s international Energy & Infrastructure industry group has more than 50 experts across 16 offices. We have been active in corporate/M&A and financing in relation to renewable energy for more than 15 years and have extensive legal and commercial expertise and market knowledge. We are currently ranked fourth globally according to the number of renewable energy M&A deals in the CleanEnergyLeagueTables2021.

Question: What are the most important current developments in the field of renewable energy transactions and financing?
Response: In Austria, the Renewable Energy Expansion Act (EAG) was passed at the beginning of July 2021. We expect that the reorganisation of the support scheme for production and feed-in of electricity from renewable generation sources will create an increased incentive for the development of new sites (especially wind and PV). The same applies to potential sites for repowering.
In addition, in the area of transactions and project financing, we are primarily concerned with wind energy and PV in Austria. However, the delay factors of the last few years (regional planning and approval of individual projects, grid capacities) are still an uncertainty factor regarding the possible speed of implementation.

Question: What market developments can be expected towards the end of the year and beyond?
Answer: We expect a significant increase in transaction activity for Austria in the short term, especially due to the clearer framework conditions for the expansion of renewable energies created by the EAG. This is all the more true as a large number of projects from developments in recent years are ready for construction and in the pipeline and the chances of their implementation should increase significantly due to the switch from uniform support tariffs to an (internationally familiar) auction model.

It remains to be seen how the concrete state law requirements for the approval of individual projects will be implemented. Here, a broad spectrum can be observed in the fundamental political access to individual production sources and in the use of regulatory instruments for the required project structures.

Question: What has been your personal “game changer” or “highlight” in the field of renewable energies since the beginning of 2021?
Answer: The adoption of the Renewable Energy Expansion Act (EAG) in Austria was without question ground-breaking for the further development of renewable energies in Austria. After lengthy negotiations and some adjustments, the law, which was actually supposed to have been in force since January 2021, was passed by the National Council at the beginning of July. The EAG represents a central building block in Austria’s legislation to combat climate change and lays the foundation for the country’s climate neutrality. Austria is to generate 100 percent of its electricity from renewable energy sources by 2030. To this end, the EAG firmly establishes a corresponding support system that provides for annual investments of about one billion Euros in the expansion of renewable energies and for the expansion of storage capacities by 2030. A further 500 million Euros will be available to industry by 2030 to support, secure competitiveness, and safeguard and create new jobs. In addition, the EAG is intended to facilitate grid access for green electricity plants. There are also new regulations for photovoltaics. Agriphotovoltaics as well as installations on landfill sites and in former mining areas will be given priority in connection with solar parks.

In any case, achieving climate neutrality by 2030 is an enormous challenge. The production of green electricity must be increased by around 27 terawatt hours (TWh). This currently corresponds to an increase of around 50 percent. The expansion targets are as follows: 11 TWh photovoltaics, 10 TWh wind power, 5 TWh hydropower and 1 TWh biomass.

The EAG first of all creates good framework conditions for clearing the investment backlog in the area of renewable energy expansion. Market premiums and investment subsidies are intended to support technological development. The expansion of renewable energies will receive comprehensive financial support.

However, the comprehensive implementation of measures within this legal framework also requires political decision-making in the nine Federal States for the legal establishment of suitable dedication and approval procedures for concrete project sites. Likewise, the bottleneck in the availability of sufficient grid capacities for the feed-in of the additional electricity volumes from renewable sources must be eliminated in terms of technology and approval.

An essential element for the diversification of production and consumer markets are also the energy communities established in the EAG for local energy supply under the most limited use of transmission grids. In this area, we expect the formation of new cooperation models between companies and municipalities.

Finally, we are also eagerly awaiting the implementation of the hydrogen initiative and the regulations for the expansion stop of the gas grid and for a support programme for green gas in industry. Here, further legislative proposals have been announced for review.

Do you have any questions or are you interested in a (interdisciplinary) discussion with our Corporate Energy & Infrastructure team? We look forward to talking to you!