Publications / Hungarian Energy Market Report
REKK Hungarian Energy Market Report 2011 Q2Published: 1 of June, 2011
Dilemmas of renewable production support | Analysing the pricing options of a new, long term natural gas import agreement | Nuclear projects in East-Central Europe

Table of contents

Dilemmas of renewable production support

From January 2012 the Hungarian Government plans to renew the support scheme of the renewable electricity generation. With the December 2010 expiration of the preceding regulatory period the question was raised about the type of tools to be used by the policy makers to achieve the goals of Hungary’s Renewable Energy Utilisation Action Plan (NCST). Last December it was rumored that a green certifi- cate system would be introduced. However, the modification of the Electricity Act published on 16. March 2011 foreshadows the development of a differentiated feed-in obligation scheme, based on the German support system, which would grant different feed-in tariffs based on nameplate power plant capacity, generation technology and date of commissioning. It became clear too, that the KÁT scheme will be downsized to support renewable electricity production only, separating itself from co-generated production. It seems obvious also that time had come for largescale biomass production, accounting for 70% of renewable electricity generation, since this technology is considered unfavorable. The new regulation is expected to be issued in July 2011. In this article, the risks of differentiated feed-in obligation scheme are evaluated, based on the Hungarian and international examples from the past years.

Analysing the pricing options of a new, long term natural gas import agreement

Hungary’s gas supply security greatly depends on the long run import agreement with Russia bound to expire in the middle of the decade. The preparatory negotiations for the next agreement will probably start within the next two years. Taking the two digit percentage difference between the oil price-indexed import prices and the prices on the European markets into consid- eration, it becomes vital for the Hungarian end users to see how strong negotiation position does Hungary possess by the time the new agreement is concluded. Our article attempts to analyse this issue.

Author: András Kiss
Nuclear projects in East-Central Europe

During the past decade the expression “nuclear renaissance” became a commonplace. The expected strong increase in global electricity consumption during the next 20 years (with about 75%) assumes a net nuclear capacity expansion above 100 GW. This will be generated mainly by the average 5-6% annual electricity consumption increase in China and the Asian region, and the ambitious nuclear plant building program planned to meet this demand. Measures targeting climate change mitigation, considerable increase of fossil fuel prices and efficiency improvements in nuclear energy production greatly improved competitiveness of carbon-free technologies, bringing eventually the nuclear energy into the forefront of investors’ interest even in the developed countrie