29 April 2002 – Austrian state-owned energy company Verbund has bowed to political pressure and abandoned a planned joint hydropower venture with German energy giant E.ON – instead working with an alliance of five Austrian utilities.
European Hydro Power was to have combined the hydro generation assets of Verbund and E.ON but a political backlash in Austria stalled the plan in February after leaders including Chancellor Wolfgang Schuessel and President Thomas Klestil warned that Austria’s critical hydro-electric resources could fall under foreign control.
The Austrian-centred solution, to be called “Energie Alliance”, will involve the pooling of a large part of the utilities production and power trading activities with Verbund, which operates Austria’s national electricity grid.
Under the new agreement, Verbund will control 66 per cent of a new power company formed with five utilities from central and eastern Austrian provinces — EVN AG, Wienstrom, Energie AG OberOesterreich, Linz AG, BEGAS and BEWAG — who will have 33 per cent of the new group.
A separate unit also being set up under the joint venture will serve large industrial customers.
In a statement today, Verbund welcomed the agreement on a national power partnership, which was presented by Federal Chancellor Schuessel and Minister for Economic Affairs Bartenstein jointly with Provincial Governors Proell, Haeupl, Puehringer and Niessl.
Verbund said it regards the new agreement as an important step on the road to an Austrian power partnership at all value stages which is also open to other companies of the Austrian electricity industry. Verbund added that the Austrian power solution would ensure the long-term supply of clean power generated from renewable hydropower at market prices for all Austrian consumers.
Verbund blamed the termination of European Hydro Power on “the changed general set-up” but said it would continue to co-operate with E.ON and look at other options to optimise their business. “Verbund will continue to play its active role in the increasingly liberalized European power market and use new opportunities of cross-border energy partnerships to promote its international competitiveness,” said the statement.
Austria produces around 70 per cent of its energy from hydro electricity, exploiting the Danube and the mountainous country’s abundance of rivers and waterfalls to power a network of some 4000 hydro-electric plants.
Although it is one of Europe’s smaller electricity markets, the liberalisation of Europe’s power industry has attracted the attention of several foreign predators because of the strategic importance of Austria as a transit route for eastern European energy supplies and also its large reserves of hydroelectric power.