Decrees and promises: a long-awaited loosening of strict restrictions?

2022 has been a challenging year for PV developers in Hungary, who quite often found themselves faced with unforeseen obstacles turning business plans upside down (see our report in the last issue). Luckily, the tide is changing and 2023 started with important legislative changes and a quiet promise of further amendments to the relief of the renewables market in Hungary.

Removing the 30% storage and balancing service capability requirements

Back in 2022, the Operational Code of Mavir Zrt. (the Hungarian TSO) was amended multiple times. To put it lightly, these amendments did not receive a warm welcome from developers, as they made the application for grid connection more challenging than necessary. One of such roadblocks introduced in 2022 was for weather-dependent powerplants to build a storage unit with a storage capacity of 30% of the nominal capacity of the powerplant.

This requirement of the Operational Code was overruled as of 1 January 2023 by Government Decree 527/2022. (XII. 16.), which specifically states that the commission of storage capacity shall not be required from weather-dependent powerplant developers applying for grid connection after 2 May 2022. Also worth noting that providing such services would make the investor eligible for a discount to a maximum amount of 50% of the application deposit (see below).

But yet another setback: grid deposit and postponed connection dates

Not all changes were so well received. Together with the above Decree, the Hungarian Government also introduced Governmental Decree 526/2022. (XII. 16.). This Decree provides that in cases of powerplants not yet connected to the grid, developers (i) must confirm their intentions to connect, (ii) indicate the date upon which they intend to connect and (iii) pay a deposit. In addition, the DSOs were entitled to amend the year in which the power plant may connect to the grid, which in a lot of occasions, was pushed back by years compared to what was originally planned for the respective projects.

Further, the next publication procedure for grid connection capacity was further postponed to 24 May 2023.

Wind revived?

Hungary’s dispute with the European Commission regarding RRF funds is probably well-known by now. However, it may be less known, that this debate also seemed to force the Hungarian Government to make a promise regarding wind powerplants.

Because wind powerplants have to maintain a 12 km distance from all inhabited areas, building and commissioning of such powerplants in Hungary appeared to become an almost impossible challenge. While the Government has not yet made any big announcements, it made a promise to the European Commission that by 31 March 2023, this distance will be reduced. The specifics, however, remain unknown.

Conclusions

2023 started with some important changes in legislation which gives a reason for developers to have hopeful prospects about the future. The tendency of tightening restrictions around renewable powerplants seems to loosen, however, it may be too early to draw a final conclusion just yet.