Austria 35
demand from other sectors potentially interfering with security of supply. When
switching to the hydrogen- based direct reduction route (with subsequent
processing of pig iron in electric arc furnaces), large amounts of electricity are
needed. The way in which the future energy supply (and demand) system is
designed determines the scale and composition of auxiliary infrastructure, like
transmission and distribution grids, or gas pipelines and storage caverns. For
instance, it is not currently clear which party will generate and eventually
supply hydrogen to the market – it may eventually be the currently incumbent
power utilities, the iron and steel sector itself, or a providing third party. It is
also conceivable that the generation of electricity and/or hydrogen is organised
in a much more decentralised manner, such that on- site generation of ‘green
hydrogen’, for example, decreases the upstream dependence of the iron and steel
sector.
Along the pathways there is the risk that the sudden increase in electricity
demand from renewable energy in Austria or Europe cannot be met by potentials, or that the supply side has not been prepared to meet it. This risk could
increase substantially if large industries decide to switch to carbon- neutral electrified processes and/or individual transport switches to e- mobility. A second
branch of consequential risks concerns the electricity grid with different perceptions. While some stakeholders expect an increase in grid instability due to the
volatility of renewable energy (especially when expansions in subordinate grids
are lagging), others perceive the risk as being very low due to intelligent digital
solutions. In addition, there is a risk that the system is not flexible enough to
cope with expected variations in energy supply from renewables and that storage
capacities are too small. This risk increases when a 100% renewables- based electricity mix is targeted and should include insights from increased efficiency of
co- generation.
There is no consensus among stakeholders concerning the system design of
future electricity infrastructure. Some favoured an expansion of central power
grids to transfer large amounts of power away from renewable power plants,
especially in peak times. Others argued that such investments are sunk costs,
and that one should start with decentralised energy from a very local level in
response to the electricity demand there, then supply the electricity demand of
the next level. This would also increase the local or regional added value (e.g.
engineers, plumbers, etc.). However, a central–decentral mix is seen as reasonable depending on the overall energy supply system design (cf. the cases with
on- or off- site ‘green’ hydrogen generation for the iron and steel sector).
Cluster 2: Political and institutional framework
Another cluster of mainly implementation risks hindering, postponing, or jeopardising transition is endemic in the political and institutional framework. Here we
saw a broad consensus. While on a meta- level there is the risk of lacking or
missing co- ordinated national initiatives, on a very specific lower level legal regulations may be counterproductive. Furthermore, national transition depends
demand from other sectors potentially interfering with security of supply. When
switching to the hydrogen- based direct reduction route (with subsequent
processing of pig iron in electric arc furnaces), large amounts of electricity are
needed. The way in which the future energy supply (and demand) system is
designed determines the scale and composition of auxiliary infrastructure, like
transmission and distribution grids, or gas pipelines and storage caverns. For
instance, it is not currently clear which party will generate and eventually
supply hydrogen to the market – it may eventually be the currently incumbent
power utilities, the iron and steel sector itself, or a providing third party. It is
also conceivable that the generation of electricity and/or hydrogen is organised
in a much more decentralised manner, such that on- site generation of ‘green
hydrogen’, for example, decreases the upstream dependence of the iron and steel
sector.
Along the pathways there is the risk that the sudden increase in electricity
demand from renewable energy in Austria or Europe cannot be met by potentials, or that the supply side has not been prepared to meet it. This risk could
increase substantially if large industries decide to switch to carbon- neutral electrified processes and/or individual transport switches to e- mobility. A second
branch of consequential risks concerns the electricity grid with different perceptions. While some stakeholders expect an increase in grid instability due to the
volatility of renewable energy (especially when expansions in subordinate grids
are lagging), others perceive the risk as being very low due to intelligent digital
solutions. In addition, there is a risk that the system is not flexible enough to
cope with expected variations in energy supply from renewables and that storage
capacities are too small. This risk increases when a 100% renewables- based electricity mix is targeted and should include insights from increased efficiency of
co- generation.
There is no consensus among stakeholders concerning the system design of
future electricity infrastructure. Some favoured an expansion of central power
grids to transfer large amounts of power away from renewable power plants,
especially in peak times. Others argued that such investments are sunk costs,
and that one should start with decentralised energy from a very local level in
response to the electricity demand there, then supply the electricity demand of
the next level. This would also increase the local or regional added value (e.g.
engineers, plumbers, etc.). However, a central–decentral mix is seen as reasonable depending on the overall energy supply system design (cf. the cases with
on- or off- site ‘green’ hydrogen generation for the iron and steel sector).
Cluster 2: Political and institutional framework
Another cluster of mainly implementation risks hindering, postponing, or jeopardising transition is endemic in the political and institutional framework. Here we
saw a broad consensus. While on a meta- level there is the risk of lacking or
missing co- ordinated national initiatives, on a very specific lower level legal regulations may be counterproductive. Furthermore, national transition depends