National Energy and Climate Plan

Hungary

SolarPower Europe Assessment

1. Solar Target

Information available in the NECP
RES target 21%
RES-E target 21,3%
Electricity in the RES target for transport only mentioned - no number provided
Solar target 2020: 1170 MW
2021: 1691 MW
2022: 2212 MW
2023: 2733 MW
2024: 3255 MW
2025: 3777 MW
2026: 4310 MW
2027: 4845 MW
2028: 5380 MW
2029: 5915 MW
2030: 6454 MW
Solar target per segment No information

Overall quality and ambition: Intermediate to High

The plan primarily relies on solar energy to increase the renewable share in the energy mix. A year-by-year roadmap is set out through 2030. Solar targets look ambitious compared to current levels, with about 5 GW of new installed capacity over ten years, although yearly installed capacities could expand even further. The resulting W/capita ratio by 2030 is 696, somewhat in line with the expected EU average.

2. Auctions

Information available in the NECP
General information on auctions Information is available
Details of the auction pipeline (schedule and volumes) Partially: the plan does not include detailed schedule or volumes, but it is specified that the maximum annual new support content that can be allocated under METÁR until 2026 is HUF 45 billion.
Details on auction design The plans specify that technology-neutral renewable capacity tenders will be launched. Subsidies for the construction of capacities of at least 1 MW will be allocated only in an artificially created competitive situation. Power plants with a capacity of less than 0.5 MW (except wind) may participate in the METÁR mandatory take-over support category.

Overall quality and ambition: Intermediate to High

The plan includes details on tender design and an indicative budget allocated for RE tenders. However, the details on tender schedule and volumes are missing.

3. Administrative procedures

Information available in the NECP
Assessment of current administrative issues No information
Remedy measures No information
Introduction of one contact point for the permit granting procedure (RED II, article 16) No information

Overall quality and ambition: Poor

The plan should develop the amount of information existing on administrative measures, which are often a major bottleneck to the development of renewable energy projects.

4. Prosumers

Information available in the NECP
Current prosumer share No information
Targets for prosumers The plan sets the target of 200,000 households with 4kW rooftop PV by 2030. The plan mentions the willingness to encourage self-consumption of renewable energy, to strengthen energy independence of households and reduce energy supply costs.
Support schemes for prosumers The plan includes the following measures:
- Development of a scheme for energy communities
- Support to municipal self-consumption
- Support through (i) the METAR feed-in premium for RES capacity lower than 0.5 MW without having to participate in a tendering scheme, (ii) a repayable grant in the 2021 2027 programme.
- Mandatory supply of 25% of RES energy in new buildings from 2020.
Collective self-consumption framework The plan proposes the development of a framework for renewable energy communities, which includes the definition of a legal entity including consumers and producers. The schemes seem to allow energy sharing within the legal unit.

Overall quality and ambition: Intermediate

The plan has been enriched with several elements on the development of prosumers. It proposes a specific target for the development of prosumers as well as a comprehensive set of enabling measures.
However, it will be important to have more details on the precise support schemes for prosumers as well as on the framework for collective self-consumption and energy communities.

5. Power Purchase Agreements

Information available in the NECP
Assessment of current barriers to PPA development No information
Enabling framework for PPAs No information

Overall quality and ambition: Poor

The plan does not contain any information on the potential of PPAs in Hungary, the challenges, and barriers they face or the potential remedy measures that the government could put in place.

6. Flexibility and storage

Information available in the NECP
Assessment of current demand-side flexibility and storage capacity No information
Targets for battery storage Battery storage is identified as potentially key for flexibility; long-term measures to encourage market storage investments (non-DSO/TSO) are included. The main regulatory task is to create incentives, the most obvious tool of which may be to create a flexible tariff structure.
Targets for demand side response One stated objective is facilitating the creation of independent aggregators. System operators and distributors will have the task of designing demand-side response incentive schemes to increase the supply of these capacities.
Support framework for flexibility (market access, balancing markets, network charges) The plan identifies the need of smartening distribution and transmission networks, distribution flexibility markets, utilisation of controllable capacities, as well as need to roll out innovative solutions such as energy storage and DSM, including through digital and smart devices. Another planned action is the development of short-term energy markets to support system flexibility. Additionally, the government is preparing the electricity grid for the increasing spread of decentralised capacities. Alternative pricing methods - marginal pricing - for balancing markets are also looked at.
Support schemes for storage Partially: no support schemes are available, though several references are made to the need to provide incentives to flexibility solutions including storage and demand-side response.

Overall quality and ambition: Intermediate to High

The plan extensively addresses flexibility needs and how to implement CEP provisions. While no specific support schemes are included, the need to create incentives to storage and flexibility is stated on several occasions. The plan does not provide clear targets for developing battery storage or demand-side response.

7. Grid integration

Information available in the NECP
Assessment of current state of play No information
Measures for renewable grid integration The NECP refers to the "Network Development Plan of the Hungarian Electricity System 2017", which includes reference to several projects to invest into transmission grids.
The plan also mentions the development of a Hungarian-Slovak project names "Smart Grids: Danube Ingrid".

Overall quality and ambition: Poor

The plan does not acknowledge the need to modernise the electricity grid to cope with an increasing share of variable and decentralised renewables, except for smart grids. Reinforcing this aspect should be key, through for instance exchange of best practices or national analysis of the required investments

Methodology

The assessment of National Energy and Climate Plans was based on both quantitative and qualitative criteria:

–    Quantitative criteria assessed the availability of the right amount of information in the plan. European countries developed their NECP on the basis of a template defined in the Governance Regulation (Annex I). The assessment consisted in evaluating the level of information available, based on legal obligation of member states and best practices.

–    Qualitative criteria assessed the ambition of the plans with regards to solar PV development as well as the quality of the proposed measures compared to the barriers faced by solar PV developers. This qualitative assessment has been made based on interviews with local industry representatives, when available.

For each category, each parameter was affected a coefficient dependent on their importance. 

The details of the grading system adopted is presented below.

Based on these criteria, an evaluation of each NECP has been carried out. All grades has been converted to a scale from zero (minimum) to six (maximum) points. All grades have been rounded to the nearest 0.5.

The assessment is based on SolarPower Europe’s best knowledge at the time of publication.

Category

Assessment criteria

Grade

1. Solar Target

Presence of a solar target


Presence of a solar target disaggregated per segment


Overall quality and ambition*


1 point


1 point



2 points


2. Auctions

Presence of information


Details on the auction pipeline (schedule and volumes)


Details on the auction design


Overall quality and ambition

1 point


1 point



1 point


2 points

3. Administrative procedures

Presence of an assessment of current administrative issues


Presence of measures to address issues


Introduction of a “one contact point” system for the permit granting procedure, as per the RED II, article 16


Overall quality and ambition

1 point



1 point


1 point




2 points

4. Prosumers

Details on current prosumer share and support schemes


Presence of objective or trajectory for prosumers development


Presence of support schemes for prosumers


Presence of provisions for collective self-consumption


Overall quality and ambition in prosumers


1 point



1 point



1 point


1 point


2 points


5. Power Purchase Agreements (PPAs)

Assessment of barriers to PPAs


Presence of measures to develop an enabling regulatory framework


Overall quality and ambition

1 point


1 point



2 points

6. Flexibility and Storage


Assessment of current demand-side flexibility and storage capacity


Presence of objective and/or provisions on battery storage


Presence of objective and/or provisions on demand side response


Presence of a support framework for flexibility (market access, balancing markets, network charges)


Presence of support schemes for storage


Overall quality and ambition

1 point



0,5 point



0,5 point



1 point



1 point


2 points

7. Grid Development

Presence of information on the current grid development or existence of a grid development plan or assessment of the challenges related to grid integration of renewables


Presence of measures to improve grid connection and integration of renewables


Overall quality and ambition


0,5 point





0,5 point



2 points


*For the assessment of the level of ambition across the solar targets, a conversion from TWh to GW has been necessary in a number of cases. In order to do so, average solar irradiance levels have been taken from Solargis’ Solar Resource Maps of Europe (https://solargis.com/maps-and-gis-data/download/europe). SolarPower Europe Global Market Outlook 2020-2024 data for cumulative capacity in 2019 has been used to calculate net solar PV additions by 2030. Moreover, in order to infer the W/capita ratio in 2030, the projections of EU population per country have been retrieved from the United Nation World Population Prospects 2019 (available at https://population.un.org/wpp/Download/Probabilistic/Population/).

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