Energy prices as a location factor

EcoAustria study shows urgent need for reform in Upper Austria.

A recent EcoAustria study commissioned by the NEOS Lab highlights the central importance of energy policy for Upper Austria as a business location. Rising energy prices in recent years have put a strain on companies, households and the labor market alike - and are jeopardizing the province's long-term competitiveness.
According to calculations by EcoAustria, a 10 percent reduction in energy prices could lead to an increase of around 1,500 jobs in the long term and increase the gross regional product by up to 0.9 percent. Targeted relief for energy-intensive companies - such as those in the metal, paper and chemical industries - would not only reduce production costs, but also promote investment and innovation.

Upper Austria is particularly affected due to its industrial structure. Around 37,000 people are directly employed in energy-intensive industries, and these companies secure a total of around 66,000 jobs in the state through upstream links. The high energy costs are leading to rising production prices, declining competitiveness and, in extreme cases, relocation.

EcoAustria's analysis also shows that the high energy prices in Upper Austria are not solely due to international markets, but are largely the result of structural problems. These include low competition, non-transparent pricing, high grid fees and a fragmented grid structure with 21 distribution grid operators. These factors inhibit efficiency and innovation and drive up costs for consumers and companies alike.
EcoAustria therefore recommends a series of reforms, including a reform of the grid tariff calculation with longer depreciation periods and incentive mechanisms, more price transparency for consumers, the unbundling of grid and distribution, as well as investments in smart grids, storage and decentralization.