Publications / Hungarian Energy Market Report
REKK Hungarian Energy Market Report 2011 Q3Published: 1 of September, 2011
Baumgarten-saga | The impact of the shutdown of German nuclear power plants on Central European prices | Regulation changes in the natural gas market in 2010/2011 | The effects of a stricter climate policy on the economy of Hungary

Table of contents

Baumgarten-saga

In our study we look at the 2011/2012 allocation of the HAG pipeline, which is of primary importance regarding domestic gas prices, look at the important stages in the history of capacity distribution, and evaluate the results.

Author: Pálma Szolnoki
The impact of the shutdown of German nuclear power plants on Central European prices

The nuclear energy policy of Germany has undergone a sea change, causing serious upheaval on European markets. Many studies have been written about the consequences of the phase-out, but most of them focused on German system security, and what effect the phase-out will have on wholesale electricity prices. What started out as a nearly 8.4 GW temporary reduction in generating capacity in March, and became a permanent reduction of 8.4 GW in June caused significant price increase in wholesale electricity futures prices in Hungary. Our study looks at the possible causes, and the mechanism of the price increase. First we draw up a supply curve reflecting German power plant capacities and the cost of generation, and show what consequences the reduction of nuclear power sources have had on the wholesale electricity price in Germany. After that we briefly look at how the decision about the shutdown affected Central European wholesale markets, and then look at its short-term effects on Germany and Hungary through the development of cross-border flows.

Regulation changes in the natural gas market in 2010/2011

There have been a lot of changes in legislation in the past gas year which have had and will have a profound effect on the workings of the natural gas market. This article gives a brief, factual overview of regulation changes affecting the 2010/2011 gas year. The first part of this article shows what changes have taken place in regulation, while the second part of the article is about the measures that are to help Magyar Villamos Művek Zrt. (MVM) enter the natural gas market.

Authors: Kornél Andzsans-Balogh, Lajos Kerekes
The effects of a stricter climate policy on the economy of Hungary

For some years now there has been a heated debate in the European Union about whether it is enough to reduce emissions of greenhouse gases by 20% from their 1990 levels by 2020, or should they be reduced by 30%. With the publication of Roadmap 2050 the debate about the reduction target for GHGs by 2020 seemed to have died down, as Roadmap sets no target values to be achieved by 2020. However, it presents the idea of a 25% reduction target for the first time, also providing a possible scenario for increasing burdens placed on member states gradually. The proposed 25% abatement was approved at the meeting of environment ministers of European Union member states, but Poland declared it would block the process, arguing that the European Committee’s decision is not in accord- ance with the principle of proportionality, and that emissions targets could be achieved through other, more cost-effective ways. Furthermore, Poland argued that favouring natural gas over coal goes against the non-discrimination principle of the European Union and is an intervention in the energy policy of member states. Note, that currently the only country blocking the process of European climate policy is Poland. This study looks at what effects a stricter Euro- pean Union GHG emission reduction policy would have on the economy of Hungary, i.e. what would happen if the reduction target to be achieved by 2020 were raised from 20% to 30% of 1990 levels. We look at the costs and the benefits of this in the various sectors of the economy. We also look at the 30% target proposed earlier, for this might be set as the official target in the EU, provided that an international treaty with developed countries outside the EU is concluded.