Hungary launches third renewables auction

The Hungarian Energy and Public Utility Regulatory Authority (HEPURA) has launched the nation’s third auction for procuring renewable energy generation capacity.

Under the procurement exercise, HEPURA will award feed-in premium payments – on top of wholesale electricity returns – during 15-year contracts to two types of project: Facilities with a generation capacity of 300 kW-1 MW and 1-20 MW installations.

For the first project category, the authority wants to contract around 50 GWh and has allocated a total budget of HUF 200 million (around $670,000) per year. For the second category, an annual budget of HUF 250 million has been allocated and the contracted power should be 250 GWh.

Bids will have to be submitted between July 1 and July 30. The auction is part of the METAR-KÁT renewables incentive program introduced by the Hungarian government in 2017.

In the second auction, which was finalized in February, the lowest bid came in at HUF16.18/kWh ($0.0543). For installations between 300 kW and 1 MW, final prices varied from HUF21/kWh ($0.071) to HUF 23.03/kWh, while in the group including projects ranging in size from 1 MW to 49.9 MW, final prices ranged from HUF16.18/kWh ($0.0549) to HUF17.97/kWh. The average final price in the first category was HUF22.35 while, in the second one, it was HUF17.22.

In the first pilot auction held in March 2020, the HEPURA awarded almost all the 131.9 MW capacity to solar projects. The final average price was HUF24.81/kWh in the first category and HUF21.69/kWh in the second. The lowest bid of HUF20.20/kWh was submitted for a 20 MW solar plant.

According to the latest statistics from the International Renewable Energy Agency (IRENA), Hungary had installed 1.95 GW of solar by the end of 2021. New capacity additions hit 553 MW last year.