People in Austria have been struggling with the cost of energy in recent years, but there is good news ahead. From March, more than 400,000 households in Austria will see a drop in electricity prices.
Verbund, Austria’s biggest electricity provider, announced on Monday that it will reduce tariffs for households and businesses by around a third.
From March, customers will pay just under 10 cents per kilowatt hour for energy, down from the current 15.6 cents. Taxes, levies and grid fees will continue to be charged separately and are set by grid operators and the energy regulator E-Control.
“We can take this step now because the normalisation of electricity prices gives us the leeway to do so,” Verbund CEO Michael Strugl said on Monday, reported Der Standard.
Around 440,000 existing customers will be contacted in February and invited to switch to the so-called ‘Austria tariff’, which includes a one-year contract commitment and will also be available to new customers.
For an average household consuming 3,500 kilowatt hours per year, the reduction is expected to save more than €200 per year.
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The announcement comes after Austria passed the new Electricity Market Act, in December. It includes a “price-reduction guarantee” designed to ensure that falling wholesale prices are passed on to consumers and comes into force in stages this year and next.
Strugl said the move by Verbund was not connected to politics. “It is in our interest that customers have low prices,” he said. “And in doing so, we are also making a contribution to Austria.”
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In order to achieve lower electricity prices in the long term, Strugl called for renewable energies to be expanded and system costs reduced.
He said model calculations show that better coordination of grid expansion and a more balanced mix of generation technologies could reduce network costs by up to 40 percent.
Specifically, Strugl called for an overhaul of Austria’s national grid infrastructure plan, known as ÖNIP, saying solar power was over-represented while wind energy, which is crucial during winter months, was not given enough weight.
READ ALSO: How Austria wants to curb inflation and cut electricity price increases