The aim of this analysis is to identify the most severe industrial organization and regulatory issues which appeared since the market liberalization. Furthermore, it strives to give recommendations for the government which help the development of an efficient and non-discriminatory power market, which allows for economic growth.
First, we consider the wholesale market structure and main regulatory issues. Third party access to domestic generation capacities, feed-in tariff (KÁT) issues, third party access to cross-border capacities and ancillary services market is also highlighted. Then we evaluate the effects of market structure and regulation on the price formation of the liberalized market. Universal service issues are also emphasized. Finally, we cover institutional concerns such as stability and predictability of regulatory environment, transparency and possibilities of the Hungarian electricity exchange. Finally we summarize our recommendations.