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“The Lack of Harmonisation of Access to Electricity on the Rail, Unlike Other Rail Operating Regulations at the EU Level, Is a Problem,” Says Michael Bares, ÖBB Infrastruktur AG

“The Lack of Harmonisation of Access to Electricity on the Rail, Unlike Other Rail Operating Regulations at the EU Level, Is a Problem,” Says Michael Bares, ÖBB Infrastruktur AG
photo: RAILTARGET/“The lack of harmonisation of access to electricity on the rail, unlike other rail operating regulations at the EU level, is a problem,” says Michael Bares, ÖBB Infrastruktur AG
02 / 06 / 2023

In the rapidly evolving landscape of railway infrastructure, the need for effective energy management has never been more pertinent. Amidst the growing concerns over the energy crisis in Europe, we delve into a conversation with a key player in the field, ÖBB Infrastruktur, and its Head of Sales, Ing. Mag. Michael Bares. In this interview, we explore the intricate dynamics of energy management, the impact of the current energy crisis, strategies for a sustainable energy mix, and the challenges posed by the lack of harmonised access to electricity in the European rail sector. This in-depth conversation sheds light on the efforts being made to ensure reliable, clean, and environmentally friendly transport, and provides valuable insights into the future of railway infrastructure and energy management.

ÖBB-Infrastruktur is an important partner in the modernisation of railway infrastructure in the Czech Republic. We are neighbours and have mutual plans to improve the transport infrastructure on regional lines. We want to continue to move south from České Budějovice to Austria. There is good cooperation with the Railway Administration. First, I would like to ask you to tell us more about ÖBB-Infrastruktur.

ÖBB Infrastruktur, like every railway infrastructure company, is going through major changes. We are receiving a lot of attention from the state Austria and the ÖBB-Holding. We invest around EUR 3 billion a year in the railways. We have major construction projects that we will complete in the coming years, such as the Semmering Base Tunnel, the Koralm Tunnel and the Brenner Base Tunnel, so that we can better develop international rail traffic in and through Austria.  

The investments are large, comparable to the Czech Republic, by the way. To what extent have your plans been affected by the historically unusually high inflation?

Yes, we are currently still evaluating the situation; inflation will certainly affect our results this year to some extent and will be reflected in the construction work prices. Inflation is hitting us much harder through the price of the electricity we supply to our network to rail operators. It has direct implications for the transport market.

The implementation of construction projects is spread over a longer timeline, but inflation is reflected in your energy management immediately. Energy is the central topic we invited you to talk about. So what is the current electricity situation from ÖBB-Infrastruktur perspective, also with regard to the energy crisis in Europe, and how do you intend to respond to this in the future?

ÖBB-Infrastrukur fundamental task is to enable the supply of energy to railway operators and to enable clean and environmentally friendly transport. We have our own division that takes care of energy and we currently have ten power plants in operation that belong to ÖBB-Infrastruktur, which exclusively generate electricity for rail traction in Austria. We then cover the total consumption with our partner power producers and purchases on the open market. We currently produce 1/3 of the quantity at ÖBB-Infrastruktur power plants, 1/3 is supplied by our partners, and 1/3 is procured on the energy market. It enables us to eliminate negative external influences to a certain extent.

Interestingly, you have been able to create a reliable structure for the supply of energy to carriers with this energy trimix. And what about long-term energy supply contracts for carriers, intercity and regional passenger transport, and rail freight? Do they need certainty so that transport operators can plan their arrangements with customers without being affected by price turbulence?

On the framework conditions, I have to say two things: firstly, we want to massively expand the third of the energy that we generate independently. That has already been decided at ÖBB. We have hydroelectric power plants, photovoltaics and wind power plants, which makes us a unique company in the railway industry, even on a global scale, and we will increase our own production by a third in this direction. The second thing is our purchasing strategy in the energy market. It lies in the fact that we do not act according to short-term criteria but have developed long-term procurement scenarios in which we try to purchase electricity for the grid at affordable prices. Passenger transport mirrors our strategy better and more easily than freight transport because there are multi-year commitments and contracts reflected in the timetables. It allows passenger transport to better plan its energy supply. 

In 2016, we changed our policy from the ground up, similar to our German colleagues (DB Energy). At ÖBB, we have separated the railway infrastructure from the energy sector. There is unbundling (energy transmission and distribution are separated from the ÖBB-Infrastruktur network), which means that we are in charge of the network and supply the electricity in parallel on the network. In the electricity supply, we compete with other electricity suppliers on the market and strive to offer the most favourable energy portfolio possible through our strategy and in cooperation with carriers. We currently have a high market share, supplying 72 transport companies and covering about 95% of their electricity consumption. Thanks to this share, we can plan the amount of electricity. However, we play in a free market and are exposed to the negative externalities of the energy crisis.

The 95% market share shows that ÖBB-Infrastruktur has a strong market position and that customers are satisfied.

Yes, that is a good indicator, especially in terms of sales, which I am responsible for, but I wouldn't say that anything is fixed because we are in real competition and have to constantly monitor what the customer demands and act accordingly. The energy crisis of the last one and a half years has left its mark on us too because the energy production market has had an extensive impact on our company. I speak to German (DB Energy) and Hungarian colleagues (MÁV Infra), and the situation is similar everywhere: a massive impact of the crisis, which also has budgetary consequences for local public budgets and the federal state budget. In this situation, the budgets were oriented towards the end customers and found local and nationwide solutions, but where the economy was concerned, especially with the rail freight carriers, it was difficult to find solutions. In Germany, they have capped the market price of electricity, and there is still a discussion about this in this country.

In the most difficult situation, the Czech Republic exempted railway carriers from paying the renewable energy fee.

Yes, this was also the case in Austria. The environmental charge was reduced in proportion to the amount and source of energy, but in the end, the prices on the markets increased so massively that, despite this measure, the situation was challenging for the carriers to pay these prices.

If we could move up a level, I will ask one last question. In Europe, in particular, in the Czech Republic and Austria, there is a discussion about the pricing of ETS emission allowances. How do the fluctuations in their prices and their absolute price, often over EUR 100, and especially the fluctuations in the price of allowances, i.e., their market unpredictability, affect the Austrian railways?

Yes, of course. Emission allowances have an extensive impact on us. But our situation is better because we offer a large share of hydroelectric power. However, in buying into our mix from conventional sources, we have to work with emission allowances. We offer various premium products to our customers, but even these are burdened by emission allowances.

So does that mean you can offer your customers better terms through the energy mix? 

Yes, but we have to evaluate them in the overall market situation. Personally, and from international comparison, we are convinced that the lack of harmonisation of access to electricity on the rail, unlike other rail operating regulations at the EU level, is a problem. There is no uniform approach in Europe, meaning the pricing situation differs dramatically from country to country. We want to run on corridors in and through Austria, but, at the moment, we have no solution for electricity calculations and no uniform energy tariff for trains going from point A to point B through several European countries. There are major problems.

The Czech carriers are also saying the same thing. Although we are harmonised in terms of TSI technical standards and data, it is not possible to make such calculations. Thank you for the interview, and I wish you every success, particularly in cooperation with the Czech Republic, since the intensification of rail traffic also needs intelligent energy management.

The interview was conducted by Jan Sechter, Chairman of the Transport Section of the Chamber of Commerce as part of the partnership with the RAILTARGET interview studio at the transport logistic trade fair in Munich.