Hungary’s second renewables auction attracts lowest bid of $0.0523/kWh


The Hungarian Energy and Public Utility Regulatory Authority (HEPURA) has published the list of the 255 renewable energy projects that have applied to compete in the country’s second technology-neutral renewable energy auction, launched in September.

For the Small PVPP category, including installations between 300 kW and 1 MW, the HEPURA expects to contract 40 GWh, while in the Large PVPP group, including projects ranging in size from 1 MW to 49.9 MW, it wants to secure 350 GWh. For comparison, in the first pilot renewable energy auction held in March, the Hungarian authority had secured 33 GW and 166 GW, respectively.

In the largest project category, the lowest bid submitted for the procurement exercise was HUF16.18/kWh ($0.052) and the highest was HUF18/kWh. “If accepted, the lowest bid will be 20% lower than the lowest offer presented in the previous auction of the same kind, which was HUF20.2/kWh and nearly half of the latest fixed FIT of HUF32/kWh under the expired KÁT program,” Hungarian renewable energy specialist, Ferenc Kis, told pv magazine.

Almost all of the submitted projects are for photovoltaic installations. In addition to these, only a 10 MW geothermal project and a 0.5 MW landfill gas plant based on biomass are competing in the auction.

“Out of 255 PV projects, 85 projects are in the largest category for a total power production of 1,900 GWh/year,” Ferenc added. In the smallest category, the competing projects are 170 for an offered power of 177 GWh. In both categories, the auction is being significantly oversubscribed.

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“The number of 28 projects with and above 20 MW shows that the extension of the large category from 20 to 49.99 MW was in favor of project developers,” Ferenc further explained. According to him, 12 projects were able to bid a lower price than the lowest HUF20.20 in the previous tender just less than a year ago – despite the slide of the euro-forint exchange rate and the pandemic. “It is also noticeable that tracking systems [are] gaining their space in Hungary, as 11 of these large projects are planned to rely on solar trackers,” he also stated.

The auction’s final results will be announced in the upcoming weeks.

In the first renewables auction, the HEPURA had selected 72 clean energy projects. All of the winning projects were based on PV technology, with the sole exception of a 500 MW landfill gas plant based on biomass.

HEPURA is granting 15-year feed-in premium payments to the successful projects to top up wholesale electricity prices. The tender is part of the Hungarian government's METAR-KÁT renewables incentive program, which was launched in 2017. The European Commission approved the scheme in July 2019.

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