National patchwork – Wifo warns Lower Austria about discount on electricity price

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The federal government is now considering a ceiling on electricity prices. Governor Johanna Mikl-Leitner has now announced a discount on the electricity price for Lower Austria from October. There should be a subsidy for 80 percent of the average consumption. The energy suppliers have to deal with this. Michael Böheim of the Economic Research Institute (Wifo) thinks the Lower Austrian model is good, but warns against a patchwork in support of the electricity price.

90 percent of all customers in Lower Austria are covered by EVN, Wien Energie and Verbund. Hundreds of thousands of applications are now being submitted to the providers with the electricity price discount. But you trust that. Registration should be simple and digital, Stefan Zach of EVN said in the Ö1 “Morgenjournal” on Thursday: “For people who are not so good at using the Internet, in our customer centers – ie in all district capitals – it will be easy to fill in help of the required documents.”

Fixed quantity recommended at a discounted price
The Lower Austrian model is very reminiscent of Wifo’s suggestion. It’s also socially correct, says economist Michael Böheim, as “households occupied by more people get a higher share of the subsidy than smaller households.” But there is one crucial difference: the WIFO recommends a fixed amount of electricity at a reduced price.

“Because we don’t know the market price in the future, this model may also be more expensive under certain circumstances.” The public sector here bears the risk if prices rise. In Lower Austria, these are the customers, because they do not receive a cheaper quota of cheaper electricity, but a subsidy of 11 cents per kWh.

Uniform agreement would be more efficient
If the electricity price is cheap, 11 cents per kWh can be a lot, the WIFO expert emphasizes: “But if the electricity price exploded now, 11 cents could also be very little.” He points out that if the electricity price rises by October it will call for more subsidies. Having only done it in Lower Austria, other countries could follow suit. The expert warns of a patchwork quilt in electricity price promotion. For him it would be more efficient to roll out the whole uniformly in all countries.

Böheim is convinced: Since the push comes from Lower Austria – a large federal state with a lot of political weight – this model could also be set in motion politically.

Source: Krone

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