Times are difficult and require difficult solutions.

With these words Bernd Fislage, CEO of Kommunalkredit, described the current situation with regard to climate change, the energy crisis and the Ukraine war at the municipal summer talks organized by his bank together with the Austrian Association of Municipalities.

At the event in Bad Aussee, a spa town in the Styrian part of the Salzkammergut, more than 300 representatives of Austrian municipalities and ministries as well as banks and infrastructure-oriented asset managers met on Thursday and Friday last week.

Many presentations focused on the dramatic increase in electricity and gas prices and the challenges of climate change.

Markus Fruehauf

Editor in Business.

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Fislage asked what was more important - energy security or climate targets.

"We will have to decide whether to let the turning point happen or shape it," he said.

According to him, there is enough money for the expansion of renewable energies, which also includes new power grids and storage capacities.

In Europe, 300 billion euros were invested in infrastructure and renewable energies last year.

This is more than double the figure for 2015.

For the boss of the Austrian bank Kommunalkredit, which is controlled by the German investor Patrick Bettscheider, private capital must be used for the transformation to a sustainable economy.

In addition, power grids are required to transport the energy to where it is needed.

Fislage also spoke out in favor of interim solutions, i.e. the use of fossil fuels in order to be able to guarantee security of supply.

Finally, Fislage promoted stable and secure regulation and more diversification in view of the high dependence on Russian gas.

"Dependency is expensive," added the head of Kommunalkredit.

The pandemic, supply chain problems, the Ukraine war, inflation and rising energy prices have challenged society.

Fislage promoted investments in infrastructure, especially in sustainable energy.

He considers this to be an important building block in shaping the transformation process.

Find European solutions

"We must now confront the climate crisis," said Thierry Déau, head of the French fund company Meridiam, which specializes in infrastructure and manages 18 billion euros.

According to him, investments in infrastructure are powerful tools to meet the social and environmental needs of society.

However, they are usually complex projects in the planning of which all those affected, such as teachers, parents and students in a school, should be involved.

Déau advocated new forms of cooperation.

He pointed out that Europe often just "muddles through".

Fislage had warned against excessive citizen participation in view of the difficult processes such as the expansion of the electricity grids, which are very often delayed by lawsuits.

According to Othmar Karas (ÖVP/EPP), Vice President of the European Parliament, the dramatic increase in electricity and gas prices must be countered with sustainable measures.

He spoke out in favor of new rules for structuring electricity prices.

The currently applicable merit order system must be temporarily suspended, Karas demanded.

According to this mechanism, the electricity price is determined by the most expensive power plant last switched on to meet demand.

These are currently always the gas-fired power plants, whose electricity is becoming more expensive due to the high gas prices.

According to Karas, the answers to the crises are complex and by no means simple.

He spoke out in favor of common European solutions – instead of national governments going it alone.

The Austrian climate minister Leonore Gewessler (Greens) considers the high dependency on the international electricity exchanges to be a fundamental problem.

This is not a financial product, but a commodity for basic needs.

A market for direct sales must be decisive here, said Gewessler.

In view of the dramatic increase in electricity and gas prices, Gerhard Christiner, CEO of Austrian Power Grid, which is responsible for the electricity transmission networks in Austria, warned of a shortage in the coming autumn and winter.