Narrative
The project – planned to be financed by the Recovery and Resilience Facility – aims at developing the electricity distribution grid to increase its flexibility and facilitate the integration of photovoltaic systems. To connect the photovoltaic capacity planned for 2030 to the grid, a significant expansion of both transmission and distribution grids will be needed. This project aims to support these necessary upgrades. These developments will allow the electricity generated from weather-dependent renewable sources to potentially be connected to the electricity grid. Companies with an electricity distribution license can participate ; 1 to 7 projects can be supported, with 50% EU financing.
Financial data
Total: 171,874,000,000 HUF (~470 mil EUR) EU Contribution: 85 937 000 000 HUF (~235 mil EUR) Share of EU funding: 50%
Recommendations
Hungary should continue implementing measures to upgrade the capability of the Hungarian grid to integrate weather-dependent generators. However, the amount of public funds should be minimized, and an appropriate regulation forcing the electricity companies to contribute to these investments on a market basis should be implemented. Moreover, household electricity prices in Hungary are mostly still below market prices which is counter-productive economically, socially and environmentally. Therefore the introduction of market prices for households, accompanied by appropriate monetary compensation for vulnerable households, should be required prior to upgrading the grid. Besides the above development, Hungary should take all the necessary technical and institutional measures to enhance the capability of the Hungarian grid to integrate weather-dependent generators, for example, by providing energy management services, developing innovative pricing formulas, and introducing intelligent metering systems and smart grids, where appropriate. Also, measures improving electricity energy efficiency, including demand-side management measures should be implemented.
