In 2017, a new operational support system, METÁR, was introduced for renewables-based electricity generation. The necessary legislative amendments were adopted by parliament in June and December 2016. The KÁT system continues to operate for existing plants following the introduction of METÁR; however, only new entrants will be eligible for the METÁR support mechanism.
The purpose of the new mechanism is to facilitate the integration of renewable electricity producers into the market, as well as to support the fulfilment of Hungary’s 2020 renewable energy targets. Under METÁR, renewable electricity generators, with the exception of non-wind power plants under 0.5 megawatts (MW) and those already receiving a FIT, shall sell electricity on the market. Different market premiums will apply depending on the capacity of the power plants:
- In case of smaller power plants of less than 0.5 MW capacity (excluding wind energy) and demonstration projects, the electricity produced shall be purchased by MAVIR, the TSO, and sold by the TSO on the electricity wholesale market (HUPX). The purpose of this measure is to shield small producers from some of the market sales, clearing and price risks. These producers, therefore, remain in the same position as before.
- In case of power plants of medium capacity (between 0.5 MW and 1 MW), an administrative premium, at a level similar to the KÁT, will be paid to producers without any competitive bidding procedure (no tenders).
- In case of larger power plants (over 1 MW) and wind farms, premium support shall be granted only via competitive tendering procedures (except for demonstration projects).
Although METÁR started on 1 January 2017, the details of the tendering scheme are unclear and are under negotiation with the European Commission (March 2016).
Following approval from the EU Commission, METÁR will also introduce a brown premium for depreciated biomass and biogas power producers. The purpose of this measure is to avoid the shutdown of these plants or the switch to fossil fuels in depreciated plants. In order to prevent illegal logging and to protect forests, METÁR contains strong guarantees regarding the usage of wood as fuel for electricity generation.