On 16 September 2014, another discussion in the Binder Grösswang series “impulse” took place at the premises of the commercial law firm Binder Grösswang, under the title “Energiewende versus Industriestandort.
Erneuerbare Energie, Smartgrid & Schiefergas – Wie lange ist der Standort Österreich für Industrieunternehmen noch attraktiv?” (Energy Transition versus Industrial Location. Renewable Energy Smart Grid & Shale Gas. How long will Austria remain an attractive industrial location?).
The panellists Dr. Wolfgang Eder, Chairman of the Management Board, voestalpine AG; Dr. Erich Entstrasser, CEO, TIWAG-Tiroler Wasserkraft AG; Dr. Jürgen Großmann, Shareholder of Georgsmarienhütte Holding GmbH; Dr. Michael Junghans, CEO, B & C Industrieholding GmbH and Andrä Rupprechter, Austrian Federal Minister for Agriculture, Forestry, Environment and Water Management discussed the subject in the conference area of the firm before approx. 200 guests. The discussion was moderated by Dr. Helmut Brandstätter, publisher and editor-in-chief of the daily newspaper “Kurier”.
Wolfgang Eder said: “Of course economic framework conditions play an important role in the choice of a location. The high tax burden in Austria and the current environmental and energy policy of the European Union make investments in Europe less attractive right now.” He pointed out that in the USA, for example, where voestalpine is currently investing 550 million euros in a direct reduction plant, the biggest foreign investment in the group’s history, the following factors had played an important role in the choice of location: a politically stable, calculable environment and an advantageous energy supply. The price of natural gas in the USA is about one-third of that in Europe and electricity is about 30 percent cheaper. Moreover, industrial real estate in the EU costs between 100 and 200 euros per square metre whereas in the USA the price per square metre is only 10 euros, not to mention the fact that there are hardly any more pieces of such real estate with access to port facilities available in Europe.
Entstrasser emphasised that Austrian energy companies are among the enterprises of the domestic industrial sector that have been massively burdened by Germany’s unsuccessful energy transition and the not particularly effective energy efficiency law. “As an important infrastructure segment of the industrial location here in Austria, with long-term investment projects, the highly restricted mobility of our plants makes us dependent on a stable energy policy and a stable legal framework. In addition to providing a high-quality, competitive power supply as a basis for Austria’s reputation as a good industrial location, the Austrian electricity sector can contribute substantially to raising Austria’s value creation and to the success of the European energy transition through the expansion of domestic resources – in particular large-scale hydropower.”
Großmann commented: “In order to secure prosperity and social peace, Central Europe has to remain an industrial landscape.” For this reason, he advised that companies not let themselves be put under pressure by climate change alarmism. A deindustrialisation of Europe and the concomitant shift of production sites to other continents could only lead to a rise in global emissions, he said. In these other locations, production is less efficient and transport emissions must also be taken into account. Großmann believes that to date, therefore, the German energy transition has led to an increase in greenhouse gas emissions. He advises against rushing into anything and recommends an energy mix: In his opinion, one-sided preferential treatment for fossil fuels is just as bad as a blind fixation on renewable energy sources. The corresponding technologies from Europe have by no means become the hoped-for export hits, he said. Not least for this reason, Großmann advised against the ideological stigmatisation of nuclear energy.
In answer to the question of whether the energy transition offers potential for Austrian industry, Junghans answered that in the area of efficiency enhancement, particularly in the building and industry sectors, several packages of measures are currently being implemented that offer above-average opportunities for growth (e.g. applications in the fields of drive technology, motors, electrical equipment, lighting, etc.), as well as in the areas of intelligent traffic infrastructure and more intensive networking with ICT applications. Speaking of the development of the electricity price, Junghans said that even though in Austria it had dropped by about 20% over the past five years, nevertheless Austrian industrial enterprises with sites in the USA and Canada paid about 67% less for electricity there, and about 20% less in Asia (excluding China). The development of gas prices showed an even more dramatic shift in comparative dynamics of the USA vs. Europe, he added. Whereas in 2005 the prices of natural gas were about the same in both regions, by 2014 the price in the USA had dropped to about 45% of the Austrian level.
“The energy transition is inevitable. That means we have to focus on renewable energy sources and energy efficiency. Innovation and research in this field are the path to the future, not the hope for low energy prices,” insisted Federal Minister Andrä Rupprechter. The energy transition was also a business opportunity, she said. She pointed out that the number of companies making a profit with renewable energy sources and energy efficiency was continually rising and that the export potential in this area was particularly high. Investments in environmental technologies and climate protection were among the most promising strategies, she added. “Fossil resources are finite and the carbon-based energy supply is causing dramatic climate change. Therefore we need to start reorienting our economic system immediately and integrate the factors of energy and resource consumption into future strategies.”
Among the illustrious guests were Wolfgang Schüssel (former Federal Chancellor of Austria), Ulrike Baumgartner Gabitzer (CEO, APG), Alois Steinbichler (CEO, Kommunalkredit Austria AG), André Tissot (CEO, Société Générale), Michael Ahammer (CEO, KPMG), Robert Cerwinka (CEO, Easybank AG), Ferdinand Eberle (Chairman of the Supervisory Board, TIWAG), Peter Fuchs (Supervisory Board Member, GrECo International AG), Peter Laggner (Management Board Member, Trimetis AG), Hansjörg Tengg (CEO, Smart Technologies), Herbert Pichler (Federal Ministry of Finance), Günther Tengel (Managing Partner, Amrop Jenewein), Andreas Koman (Tele2), Roman Fuchs (WIENER STADTWERKE Holding AG), Robert Hartl-Clodi (Energie AG Oberösterreich Trading GmbH), Andreas Wollein and Thomas Reitböck (VERBUND AG), Rainer Gunz (Borealis AG), Peter Wohlgemuth (Energie Steiermark AG) and many others.
Binder Grösswang has a long tradition of legal practice in the fields of public commercial and environmental law, energy and infrastructure. In 2014 the firm received two renowned international awards in succession: Binder Grösswang was named "Austrian Law Firm of the Year 2014" by IFLR (International Financial Law Review) and also received the "Chambers Europe Award for Excellence 2014"; both awards were presented in London.
In the series Binder Grösswang impulse, outstanding personalities discuss topical subjects. The discussions are held about twice a year in the exclusive ambience of the firm’s premises in Vienna.
