Brussels nods on Hungarian support scheme for renewable electricity

The European Commission has found the new Hungarian support scheme for renewable electricity to be in line with EU state aid rules. The scheme will help Hungary to reduce CO2 emissions, in line with EU energy and climate goals, whilst preserving competition.

Hungary notified plans to support electricity from renewable energy sources in April 2017. The Commission found that the scheme will help Hungary increase the share of renewable energy sources in its energy mix. It promotes the integration of such electricity into the market, in line with the Commission's 2014 Guidelines on State Aid for Environmental Protection and Energy, while limiting distortions of competition due to the state support.

We want to make progress towards clean energy for the sake of our environment but also for European economic growth. The Hungarian support scheme will increase the share of green energy in Hungary's energy mix, whilst preserving competition in the electricity market. We approved the scheme today

Support with a feed-in tariff will be limited to small installations (below 500 kilowatt) and demonstration projects.

will be limited to small installations (below 500 kilowatt) and demonstration projects. Installations with a capacity above 500 kilowatt will receive a premium on top of the market price of electricity, exposing them to market signals. For installations with a capacity above 1 megawatt and wind installations the premium will be determined and beneficiaries selected in a competitive bidding process.

, commented Margrethe Vestager, Commissioner responsible for competition policy.The scheme, with a yearly budget of up to HUF 45 billion (cc. EUR 146 million), foresees state support either through a feed-in tariff or through a price premium, in line with the Guidelines.The EC said Hungary has demonstrated that the aid is limited to what is necessary for the projects to move forward, in line with the Guidelines. This will minimise potential distortions of competition created by the public funding and help keep electricity costs at bay for consumers.The Hungarian scheme will be financed through the renewables support levy currently in place in Hungary. In order to avoid any discrimination against foreign renewable energy producers resulting from the financing mechanism, as of 2017 Hungary will partially open up the renewables support scheme to foreign producers.