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A New Legislative Package Was Adopted to Reshape the Hungarian Energy Market

A New Legislative Package Was Adopted to Reshape the Hungarian Energy Market

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The Hungarian Government has adopted new decrees concerning household power plants and microgrids. These new legislations aim to enable economic operators to cooperate in fulfilling energy needs in times of high demand as well as to regulate small household power plants. The rules in question entered into force on 26 October 2022 and presumably will remain in force at least until the end of the state of emergency.

The first change in the existing regime is that the owner of a household power plant (with a generation capacity of a maximum 50 kW) temporarily will not be able to feed the generated electricity into the grid. This also means that unused electricity will not be bought from them by the grid operator. The new rule only applies to household power plant owners who made their application for connection to the grid before 31 October 2022. In practice, this change will prohibit new users from feeding their unused electricity into the grid. Industry experts argue that this will discourage citizens from investing in renewable energy (especially solar panels), since unused electricity will no longer be bought from the energy service provider, thus resulting in a slower return of investment.

The second change facilitates the spread of microgrids in Hungary. Microgrids are small-scale grids that are shared locally between their users and operated by them. They became increasingly important in the ongoing energy crisis, as it enables economic players to invest in a power plant together and share its generated (and unused) electricity. Previously microgrids were only allowed to be established between related companies. The recent change abolishes the latter, thus users located at the same site (i.e. industrial park) can become, at least partially, independent from the world market price. The Government further facilitates the establishment of such systems, as the network access fees to be paid are much less. Representatives of the industry are pleased with the new measure since it opens up the possibility of further cooperation between businesses to promote optimal electricity use while reducing costs.

By Gabriella Galik, Attorney at law, KCG Partners Law Firm

Hungary Knowledge Partner

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