New price regime for Hungary’s small CHP plants

Hungary has reportedly asked CHP plants smaller than 50 MW to sign a deal to sell all their generation to grid operator Mavir in order to remain part of the state subsidy scheme.

The Hungarian government cut support to CHP plants under the KÁT subsidy regime from 1 July of this year, effectively compelling producers to sell their generation on the open market.

Mavir is now obliged to buy all power produced by smaller CHP plants, accounting for around 4% of the country's total production, and then sell it on Hungary’s embryonic power exchange, HUPX, which Mavir owns.

Under the new scheme, the CHP generators would have a guaranteed buyer but would also receive the HUPX market price for their production, rather than the previously subsidised rate

It is still uncertain whether there will be a new subsidy scheme for CHP producers larger than 50 MW.

In related news, the Hungarian government recently released 200 Gm3 of gas below the market price to cogeneration plants.

For more Policy & Regulation news click here.

For more Cogeneration/CHP news click here.

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