BMI View : As growth of Austria's non-hydropower energy generation is estimated to stand at a strong 8% in 2015, we expect this to slowly decrease to about 5 % - 6% in 2016. Despite this steady decline in growth rates, the country is on track to meet its 2020 targets long before the deadline and become one of the countries that may exceed its targets in the end. Growth is primarily driven by the strong wind sector and to a lesser degree by solar. While electricity prices and a contemporary general oversupply of electricity continue to exert pressure on the market, we expect solid growth in both sectors going into 2016.
With a 32.6% renewable share, Austria is closing in fast on its 2020 target of 34%. Indeed the country is expected to considerably surpass its target as particularly wind power generation is growing fast. With an added capacity of 411MW in 2014, and another 276MW expected in 2015, the country has become one of the world's top wind power producers. Based on a March 2015 publication by Eurostat, Austria also achieved the fourth highest level of renewabl energy share in electricity generation in 2013, a trend that is seen to continue over the last months.
Carried by the strong growth in the wind sector of about 13% in capacity and electricity generation, wind remains the strongest source for electricity in the non-hydro renewable sector. However, this growth is almost half that of 2013, and is expected to decrease again to about 8% in 2016 as a result of rising economic headwinds following low electricity prices due to general oversupply following the rapid growth in renewables capacity in the past. Largest y-o-y growth is expected to come from the solar sector, reaching 15.5% and a forecasted 11 to 12% in 2016. The photovoltaic (PV) segment's generation capacity however continues to only play a marginal role in the overall mix, also represented through the lower attractiveness of governmental Feed-in-Tariffs (FiT) in PV installations compared to wind farms. In the long-term, we forecast non-hydropower renewable energy generation capacity to increase at an average rate of 4.5% per year between 2015 and 2024.
Key Trends And Regulatory Changes
Since 2015, the Austrian government has reduced the FiT by 8% for PV systems up to 200kW, due to the apparent maturity - and hence lower costs - of PV systems.
The year 2014 saw a record growth in additional wind power capacity of 411MW (2013/308MW) with the 1,000th wind turbine constructed in Lower Austria in early 2015. Overall wind power capacity has hence crossed the 2,000MW mark, potentially reaching 2,486MW by the end of this year.
The government halted imports of nuclear power at the end of 2014 and will need to seek other generation sources to fill the gap. Austria imported just over 3% of its electricity needs; so a growth of 4.7% a year in electricity generation should be sufficient to cover consumption.
For 2016, we expect growth in the non-hydro renewables sector to decrease slightly as economic headwinds continue, both on a general GDP level, as well as on the sector level due to decreasing electricity prices.