Austria Races to Secure Power Supplies as ‘Peak Water’ Looms

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Verbund is expected to spend more than €2 billion ($2.3 billion) over this year and next on transmission and renewable expansion. Because of the push, debt is expected to more than double by 2028. At the same time, cash flows are set to weaken due to lower hydropower output and government-imposed electricity price caps.

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Austria’s hydropower network has long been seen as a strategic advantage, helping the country achieve one of Europe’s highest shares of renewable electricity and shielding it from fossil fuel volatility. But that strength is becoming more conditional as weather patterns shift.

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Precipitation is increasingly falling as rain rather than snow, disrupting the steady spring melt that traditionally feeds rivers. As a result, utilities face more volatile inflows, with periods of drought punctuated by intense rainfall. This variability complicates reservoir management and reduces predictability in generation, according to Verbund.

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The seasonal imbalance is particularly evident in winter, when hydropower output drops. That means in colder months, Austria has to turn to other sources.

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“We can cover over 90% of our electricity from renewable energy,” Economy Minister Wolfgang Hattmannsdorfer said at a March 26 briefing. “But in winter, we still have to produce 20% of our demand through gas-fired power plants and import another 20%.”

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That gap is driving a push to diversify the energy mix, with Austrian government pressing ahead with the Renewable Energy Expansion Acceleration Act. Known as the EABG, the proposed legislation aims at accelerating wind, solar and transmission projects.

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Hattmannsdorfer said the law will introduce uniform nationwide procedures and prioritize renewable energy infrastructure — an attempt to cut through legal disputes. Some projects have taken more than a decade to secure approval under the current system.

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“We are creating a fast track for projects of the energy transition — one law, one authority, one decision,” he said, describing a streamlined approach intended to replace overlapping federal, regional and local approvals.

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To gain approval, the ruling centrist coalition will need a constitutional majority, meaning it will need to lock in support either from the Green party of the far-right Freedom Party. Both have already voiced concerns.

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The climate-skeptic Freedom Party has long opposed wind power as unsightly and warned that federal authorities are seeking to curb the rights of provinces and municipalities, where it has more representation. The Greens, by contrast, want bolder targets for renewable power to be imposed on provinces.

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“In times of global uncertainty, we shouldn’t allow any kind of delays on domestic energy production,” Energy State Secretary Elisabeth Zehetner said last month.

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The reforms reflect a broader shift in Austria’s energy strategy — from focusing primarily on decarbonization to incorporating climate adaptation. That means deemphasizing hydropower.

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Verbund is already adjusting. The utility is diversifying into wind and solar, expanding facilities for storing power and investing in efficiency improvements at existing plants. It’s also broadening its geographic footprint in neighboring European markets to reduce exposure to local hydrological conditions.

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Despite the pivot, hydropower remains central for Austria, but there’s an element of caution due to the uncertain timing of peak water. The risk is that a temporary boost in waters from melting glaciers will mask the longer-term decline and slow action. But once a critical threshold is reached, the loss of stored ice becomes irreversible.