Publications / Hungarian Energy Market Report
REKK Hungarian Energy Market Report 2010 Q4Published: 1 of December, 2010
The moratorium on the price of universal gas service and its consequences | The expected effects of the crisis tax on the power sector | The National Renewable Energy Action Plan | Potential energy efficiency improvements in the water utility sector

Table of contents

The moratorium on the price of universal gas service and some of its consequences

Soon after it came to office, the Government of Hungary declared a price moratorium on the energy prices under the universal service scheme. The two most important ingredients of the amendment are the following: first, the right to determine universal service prices is returned from the Hungarian Energy Office (HEO) to the minister responsible for energy (currently the Minister of National Development); secondly, until a new ministerial instruction the most recently (i.e. on 1 April 2010) published universal service prices will stay in force. Freezing regulated prices and, accordingly, the suspension of the effective system on price regulation, even by itself, quite obviously ampli- fies investor risk in the sector. What makes a big difference, however, is if the moratorium gener- ates losses for affected market participants, and if so, how much, compared to calculations based on the regulation formerly in force. This is the question that we seek to answer in this article, specifically for the domestic universal service of natural gas. A similar analysis of the electricity secor is considered to be less relevant, since as of the 1st of July 2010 the tariffs announced b universal service providers in the electricity mar- ket to entitled customers are below the frozen prices Developments of the last six months in the electricity market do not indicate a substan- tial cost based pressure to increase the universal service prices of electricity.

The expected effects of the crisis tax on the power sector

The two most important, most widely quoted consequences of the sector specific, revenue based taxes are their impact on investments and the passing on of costs. In our analysis we try to both quantify the level of the tax and make a review of the likely effects – only a sketchy review, due to lack of information.

Authors: Kornél Andzsans-Balogh, Péter Kaderják
Analysis of the 2010 National Renewable Energy Action Plan of Hungary

The National Renewable Energy Action Plan of Hungary was completed by the autumn of 2010, and the extended deadline to submit it to the EU was the end of September. Instead of delivering it we asked for another extension, therefore – again – we will be one of the last few to hand over the plan to the Commission. The completion of the plan, nevertheless, is an important milestone for the country’s energy vision, and it also provides an opportunity to make a comparison with the Renewable Strategy submitted to the EU in 2009. The document, on the one hand, adequately reflects how the new Government shifted priorities within the energy strategy and renewable plans, and on the other hand the figures of the proposal already feature the impacts of the protracted economic recovery.

The potential for energy efficiency improvement within the water utility sector

The World Bank commissioned us for a research project to identify the locations in Central and Eastern Europe with substantial room to improve the energy efficiency of water utilities (companies providing water and wastewater services). Our analysis was based on the water utility benchmarking database of the IBNET programme of the World Bank.

Author: András Kis