Subsidy I (Investment Subsidy for Hydro)

Updated: 18.12.2018

Author: Tim Sternkopf

The construction or revitalisation of small and medium-sized hydro-power plants can be supported through investment grants. Revitalisation projects are eligible if the investment leads to an increase of the standard or bottleneck capacity by at least 15% (§ 26 para. 1 ÖSG 2012).

The funds available for small hydro-power plants are limited to € 20 million per year in 2018 (§ 26 para. 2 ÖSG 2012).

The funds available for medium-sized hydro-power plants are limited to € 50 million (§ 27 para. 2 ÖSG 2012).

Eligible technologies

In Austria, only small and medium-sized hydro-power plants are eligible for investment grants under this scheme (§ 26 para. 3 ÖSG 2012). Other technologies are not eligible.

Hydro-power

Eligible if the plant meets the following conditions:

• „small hydro-power plant“: maximum capacity shall not exceed 10 MW (§ 5 para. 1 subpara. 17 ÖSG 2012).

• „medium-sized hydro-power plant“: maximum capacity between 10 MW and 20 MW (§ 5 para. 1 subpara. 19 ÖSG 2012).

• If the plant has not been put into operation within 3 years after the approval of the investment grant by the Ministry of Science, Research and Economy - now: Ministry of Digital and Economic Affairs (BMDW), the application shall be deemed to be withdrawn and the approval to be expired (§ 26 para. 5 in conjunction with § 27 para. 5 ÖSG 2012).

Amount

The amount granted is defined in the subsidy directive 2015 (§3):

  • For plants with a maximum capacity of 500 kW, the amount of the investment subsidy shall not exceed 35% of the investment volume immediately needed for the construction or revitalisation of the plant (excluding land costs), with a maximum of € 1,750 per kW.
  • For plants with a maximum capacity of 2 MW, the amount of the investment subsidy shall not exceed 25% of the investment volume, with a maximum of € 1,250 per kW.
  • For plants with a maximum capacity of 10 MW, the amount of the investment subsidy shall not exceed 15% of the investment volume, with a maximum of € 650 per kW.
  • For plants with a maximum capacity from 500kW to 2 MW and from 2 MW and 10 MW, the amount of the investment volume is calculated via linear interpolation (§ 26 par. 3 ÖSG 2012).
  • For plants with a maximum capacity from 10 MW to 20 MW, the amount of the investment subsidy shall not exceed 10% of the investment volume, with a maximum of € 400 per kW or € 6 million in total (§ 27 par. 3 ÖSG 2012)
In every case, the amount of the subsidy shall not exceed 45%-65% of the environmentally relevant costs, depending on the company’s size (§ 26 para. 3 ÖSG 2012). For small enterprises (< 50 employees or < € 10 million annual turnover) the limit is 65%, for medium-sized (< 250 employees or < € 43 million annual turnover) it is 55% and for large enterprises it is 45%.

Addressees

Entitled party. The party entitled to the subsidies are natural or legal persons who construct or revitalise small and medium-sized power plants (§8 Subsidy Directive 2015).

Obligated party. The obligated party is the Federal Minister of Science, Research and Economy (§ 15 para. 1 Subsidy Directive 2015)

Procedure

Process flow

Assessment. The investment volume and the amount of subsidy needed are to be assessed by an independent expert determined by the Governor (§ 26 para. 4 in conjunction with § 27 para. 4 ÖSG 2012). Simplified procedures are available § 26 para. 6 subpara. 4/§ 10 para. 3 subpara. 1 Subsidy Directive 2015)

Application. Applications shall be submitted in writing to the Clearing and Settlement Agency (CSA) for Investment Subsidies (OeMAG) prior to construction. The applications will be processed in order of receipt (§ 10 para. 1 Subsidy Directive 2015). The application for investment grants has to contain inter alia a technical project description and the presentation of the expected electricity generation amount (§ 10 para. 1-3 Subsidy Directive 2015)

Selection. Evidence of the investment costs for the plant and its eligibility for subsidies shall be provided by the report of an independent expert who shall be appointed by the Provincial Governor (§ 10 para. 3 subpara. 1 Subsidy Directive 2015). Moreover, compliance with the conditions laid down in the ÖSG 2012 and the Subsidy Directive 2015 is assessed. The application can only be accepted and reviewed by the CSA, if the documents are complete. Especially small hydro installations need - if necessary - permits from the forestry, water and conservation departments (§ 11 para. 2 Subsidy Directive 2015). The CSA is obliged to inform the applicant if documents are missing (§ 11 para. 3 Subsidy Directive 2015). The energy advisory board might issue a recommendation when choosing the eligible project (§§ 15 par 1 and 7 par 5. Subsidy Directive 2015)/§ 28 ÖSG 2012)

Subsidy contract. If all the conditions are met, the Federal Minister of Science, Research and Economy shall grant the subsidy and conclude a contract (§ 15 para. 1 Subsidy Decree 2015). The investment grant shall be paid as soon as the plant has been commissioned at its full capacity and the final report has been submitted and examined (§ 14 par 2. Subsidy Directive 2015).

Competent authority

Federal Ministry for Sustainability and Tourism (BMNT)

Federal Ministry of Finance (BMF)

E-Control GmbH

Distribution of costs

Consumers

 The costs of the subsidy scheme are borne by the consumers (§§ 45 and 48 ÖSG 2012). 

Distribution mechanism

Consumer – grid operator. In addition to the grid use fees, the grid operators charge different support fees, which depend on the voltage level and are to be paid by the users of all voltage levels (large enterprises, private households), (§§ 45 para. 1, 48 para. 1 ÖSG 2012). The fixed rate (‘Ökostrompauschale’) is redefined by the Minister for Science, Research and Economy every three years through a regulation on fixed charges for electricity from renewable energy sources 2015-2017. 38% of the fixed support fee shall be granted to the support of small and medium-sized hydro installations, waste lye and PV-installations (§ 45 para. 1-4 and 4 subpara. 1 ÖSG 2012). Furthermore, the Minister for Science, Research and Economy issues a decree for an additional compensatory fee annually (§ 48 para. 1-2 ÖSG 2012). The compensatory charge is regulated within a separate decree (compensatory charge regulation). The support fee shall be shown separately on the electricity bills.

• Grid operator – Clearing and Settlement Agency. The grid operator shall transfer the income from the support fee to the Clearing and Settlement Agency every three months (§ 47 para. 1 ÖSG 2012).

Austria

Further information

  • Federal Ministry of Finance (BMF)
  • +43 1 51433-0
  • BMF website