Hungary launches fifth renewables auction

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

The regulator expects to contract around 864 GWh of renewable energy in the procurement exercise, of which 144 GWh should be contracted from renewable energy plants ranging in size from 5 to 20 MW and around 720 GWh from facilities with a capacity between 20 and 50 MW. For comparison, in the third auction held in December 2021, HEPURA contracted a total of 299 GWh.

Under the fourth procurement exercise, HEPURA will award feed-in premium payments – on top of wholesale electricity returns – during 15-year contracts.

Bids will have to be submitted between March 25 and March 28. The auction is part of the METAR-KÁT renewables incentive program introduced by the Hungarian government in 2017.

“The first three rounds of METAR auctions allowed connecting an additional 524 MW solar capacity to the Hungarian grid, where the fourth round supported 135 MW of existing hydropower and biomass capacities,” Hungarian renewable energy specialist Ferenc Kis told pv magazine. “The latter competition allowed only 20 days to prepare the bids, and the winners of the four projects got a weighted price of €100/MWh. The present call announced today limits the bidding price to €71/MWh and €65/MWh in the two categories. This time, there is a requirement to provide battery storage capacity at 10% of the planned power production unit.”

Solar was so far successful only in the first three procurement exercises held by the Hungarian authorities.

In the third exercise, HEPURA contracted 299 GW and allocated 183 MW of PV capacity. For the small PVPP category that included installations between 300 kW and 1 MW, the final average price was HUF 21.26 ($0.061)/ kWh, while in the large PVPP group, with projects ranging in size from 1 MW to 20 MW, the final average price was HUF 16.15 ($0.046)/ kWh.

In the second auction, which was finalized in February, the lowest bid came in at HUF 16.18/kWh. For installations between 300 kW and 1 MW, final prices varied from HUF 21/kWh 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 HUF 16.18/kWh to HUF 17.97/kWh. The average final prices in the first and second categories reached HUF 22.35 and HUF 17.22, respectively.

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 HUF 24.81/kWh in the first category and HUF 21.69/kWh in the second. The lowest bid of HUF 20.20/kWh was submitted for a 20 MW solar plant.