The market premium is a key instrument in the promotion of renewable energies (RE) in Austria and many other European countries. It was introduced to increase the competitiveness of plants generating electricity from renewable sources and at the same time support the transition to a more sustainable energy system.

The market premium works as a kind of subsidy that is paid to operators of renewable energy plants. This premium is paid in addition to the proceeds from the sale of electricity on the market. The aim is to stabilise the income of renewable energy operators and provide them with a reliable source of income that enables them to invest in the technology and operation of their plants.

In Austria, the market premium is particularly important for operators of wind, solar and biomass plants. The amount of the premium depends on several factors, including the market price for electricity, the technology of the plant and the specific framework conditions of the market. This premium is often implemented in conjunction with the Renewable Energy Sources Act (EEG), which sets out the legal basis for the promotion of renewable energies in Austria.

An important aspect of the market premium is that it operates in a liberalising market. In such an environment, where prices are determined by supply and demand, the market premium can help to ensure the economic feasibility of investments in renewable energies. This premium enables operators to cover their costs and at the same time make a positive contribution to the energy transition by producing emission-free electricity.

At European level, the market premium is often awarded through tendering procedures in which operators of renewable energy installations submit bids in order to receive premiums. These tenders are designed to promote competition and reduce the cost of promoting renewable energy. Operators who demand the lowest premiums generally have the best chance of receiving subsidies. This helps to ensure that the market premiums are in line with the EU's targets for reducing greenhouse gas emissions and promoting renewable energy.

In addition, the market premium also has an impact on the planning and expansion of electricity grids. Support for renewable energies will increase the need for flexible solutions to stabilise the grid. Operators of renewable energy plants are encouraged to develop innovative approaches to integrating their electricity generation into the existing grid in order to overcome the challenges posed by the volatility of renewable energy. This is particularly important as the feed-in of electricity from wind and solar plants is highly dependent on the weather.

In addition to the financial incentives, the market premium also promotes the development of new technologies and business models in the field of renewable energies. This premium incentivises research and development, which can ultimately lead to more efficient and cost-effective electricity generation from renewable sources.

Overall, the market premium is a decisive instrument for the transition to a sustainable energy system in Austria and Europe. It not only supports the economic viability of renewable energy plants, but also plays a central role in the creation of a competitive and resilient electricity market. With the aim of expanding renewable energy generation and achieving the EU's climate targets, the market premium will continue to play an important role in the energy market in the coming years.