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First green premium tender in Hungary is closed – initial takeaways and expected timeline for final decisions

The filing deadline of the first tender subsidizing energy production from renewable resources under the green premium scheme has recently finished at the December 2 15:00 deadline and the Hungarian Energy and Public Utility Regulatory Authority (HEPURA) has published the basic data of the renewable sector tender after the opening of the submitted tender documentation.

The tender was the first opportunity to win subsidy for electricity production from renewable resources under the new incentive system replacing the former KÁT and METÁR-KÁT scheme, and it was, as expected, surrounded by significant market interest.

We summarize the general information from the published opening data and the expected timeline of reaching the final result of the tender. 

Basic takeaways from the tender

The bids were divided into two categories under the tender: plants with the nominal capacity above 0,3MW but below 1 MW and plants with the nominal capacity between exceeding 1 MW, but below 20 MW. The total one billion HUF green premium subsidy and 200 GW/year annual new subsidized electricity was divided between the two categories on 1/3-2/3 ratio, allowing 66 GW/year total subsidized electricity amount in the smaller, and 134 GW/year in the greater category. The maximum price allowed in the tender was HUF 26.08 HUF/kWh under both categories.

A total of 168 bids were filed in the energy tender by 128 entities or private entrepreneurs. 80 percent of the bids, a total of 136 were made for the smaller nominal capacity category for a total capacity of approximately 97.3 GW/year nominal capacity. 32 bids were issued in the higher capacity category for a total 251.6 GW/year. According to the opening document information, 12 bids were invalid due to late filing or error in the opening document containing the bid price and one tender was withdrawn, with one exemption all under the smaller category (one bid for 20,000 MW/year was listed as late filing in the greater category).

Although the possibility was open to multiple types of renewable energy resources, all bids but one (which is for biogas from waste utilization) are for photovoltaic power plants. Only eighteen of the PV plants are solar tracking technology, the remaining are for fixed plants. As far as the bid prices concerned, they vary between 20.20 HUF/kWh and the maximum bid price, 26.08 HUF/kWh, but almost 90 percent of the bid prices are above 23.00 HUF/kWh. 

Next steps of the green energy tender

According to the energy tender documentation and the relevant laws, the opening of the bids took place within three days of the tender filing deadline and the publication of opening data happened within a further three days. The forthcoming procedural steps are briefly as follows:

  • The bid committee has 45 days from the filing deadline date within which the bids and the bidders will be checked if they are compliant with the tender conditions and the relevant legislation. 
  • In cases where the bids are not fully compliant but eligible for supplementary data provision (bid prices and bid guarantee cannot be supplemented),15 days deadline may be provided by the evaluation committee for the bidder to provide such supplementary information. 
  • The evaluation committee will in a complex evaluation process sort out the invalid tenders, assess the plants where due to the calculation rules the nominal capacity of the plants has to be summed up and exceed 20,000 MW, assess the plants planned on the same site, categorize the bids and list the tenders on the basis of bid prices.
  • Within 20 days of elapsing of the deadline for the supplementing, a summary report will be prepared by the bid evaluation committee on the results and thereafter, within 5 working days, it will be published on HEPURA website whether the tender was successful or not. 
  • Individual decisions on the bids will be issued by HEPURA and the results, including the report of the bid committee, will be published on HEPURA website within further 15 working days.

According to the process of the tender, the final result is expected to be issued during the spring of 2020. 

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