Development of Wind Power in Austria Importance of Regional Initiatives and Financing Models Stefan Hantsch Dr. Ursula Nährer

IG Windkraft –Austrian Wind Energy Association  founded in 1993  1500 members  all important manufacturers and operators  boardmember of EWEA and EREF

Windpower in Europe Quelle: EWEA End of 2005:  40,500 MW installed  83 billion kWh  annual rate of growth since 1995:32%

new capacity in Europe: Wind is N°2 since 2000 Quelle: EWEA Natural Gas Nuclear Windpower Coal Fuel oil Large Hydro

Casestudy Austria Experts Opinion: No chance for Wind in Austria  small landlocked country 8 Mio. inhabitants km² (1% of Brazil)  Experts until the 1990s: “There is no wind in Austria” Three institutions measured wind for more than 100 years

Wind Power in Austria Today: MW Wind N°15 in the world There is wind! How could this happen?

Background  High level of consciousness regarding energy  Tradition of producing and using own energy (wood for heating in rural areas)  Important events:  energy crises in 70th and 80th  referendum 1978 rejected an already built nuclear power plant

Solar-Waterheating Do-It-Yourself Initiatives  1985 two men constructed very simple collectors that worked  Do-It-Yourself groups spread over large parts of the country  Today number 3 in the World m²/capita Solar industry has 40% market share in Europe  The process enforced other initiatives

Regional Wind Power Initiatives  Such a group constructed their own wind measurement equipment and found sites as windy as at the coast  (Remember the experts)  Promoted the idea of searching windy sites with simple wind measuring systems

Participation of local Population  New Players Problem: lack of equity capital  Solution: Idea of broad (financial) involvement of local population  Local population becomes co-owner of power plants

Typical Procedure – Example „Windkraft Simonsfeld“  An electrician of a very small town was interested in wind power (1995).  Successful measurements: these people set up a limited company  To raise equity capital set up a corpnership -> Limited Partnership Limited Partnership Corpnership Private limited Company  In 1998 first 2 turbines Investment volume of 1.6 mio.$ Equity capital:150,000 $ from 123 people  he convinced opinion leaders information evening events  Today: 850 People 85 MW Equity capital of 21 mio. $ raised, total investment of 110 mio. $  Together with 20 friends he raised 9,000 $ for wind measurement

 Around 40% of installed wind power are made by participation projects (30% other private investors; 30% utilities)  Investment volume of 650 mio.$, equity capital sum of 125 mio. $  Chance for small companies to keep the pace with utilities or other big investors Economic Impact

 Of utmost importance were efforts of private individuals or small groups  These were the driving forces in the process Conclusions Denmark: Early 20 th century Electrification started with 300 decentralized Wind-Diesel- systems Austria: In the 1980 th Solar Heating Austria In the 1990 th Windpower Denmark: In the 1970 th Modern wind industry started in the workshop of a carpenter

 Most successful approaches were practical and sort of grassroots-developments.  A fecund soil and a local technical capacity for new ideas existed  The involvement of the local population was positive for a good acceptance of the new technologies. Conclusions  Don’t trust experts too much!

 Find or create structures that are of use for motivated people, support and encourage them.  To fight poverty it will not be enough to let the field only to big investors, but to give the population a share of their energy supply.  Financial involvement of the local population was successful in Austria, but there people have money  In regions with poorer population it might be an idea to get a pre-financing and the created new companies earn (a part of) the money back. Sociological Considerations

European experience shows: feed-in tariffs are more effective and efficient What is important for (independent) investors:  Long term investment security  Feed in Tariffs (fixed price for the produced electricity)  Purchase obligation  Guaranteed and regulated grid access Necessary because of the unbalanced situation of grid operators and independent power producers Legal Considerations

Information starts not at University Level “Wild Wind” : pupils-project: more than 10,000 pupils visited each year

Thank you again for the possibility to visit your wonderful continent! More information:

Why does the EU support Renewable Energy Sources (RES)? dependency - price risk – costs - CO2 ->EU Renewable Energy Sources Directive 2002 increase the share of electricity from RES from 13 to 20% until 2010

 Tendering Systems  Green certificates  Feed in Tariffs (REFIT)  The producer of green electricity gets a fixed price for the produced electricity for a period of several years (10-20 years)  Purchase obligation: the power is purchased by grid operators or any other institution and then proportionately distributed to power distributors  Guaranteed and regulated grid-access  -> Level playing field Types of support mechanisms

Prices paid for Wind in Europe  EU Komm Report 2005 S.45

Windpower in Europe Quelle: EWEA Total End 2005: 40,500 MW

European experience shows: feed-in tariffs have proven to be more effective and efficient: What is important for investors:  Long term investment security  Feed in Tariffs  Purchase obligation  Guaranteed Regulated grid access (necessary because of the unbalanced situation) A stable framework provides lower risk and therefore allows cheaper production costs Conclusion support mechanisms

(Independend) Operators of RES need security:  Feed in Tariffs  Purchase obligation  Guaranteed and regulated grid access Legal Considerations