Hungary concludes fourth renewables auction with average price of $0.062/kWh

Hungary’s latest renewables auction involved just 12 successful projects, with contracts for around 864 GWh of power.

The Hungarian Energy and Public Utility Regulatory Authority (HEPURA) has published the results of the country’s fourth tech-neutral renewable energy auction, which was launched in March. The final average price came in at HUF 25.16 ($0.062)/kWh.

The total amount of contracted capacity was the highest level recorded in the history of the country’s METAR-KÁT tendering scheme for large-scale renewables. However, the total number of applicants was below usual levels.

“The decline of the competition might be attributable to the tight deadline for submission and the new requirement set out in the tender, namely the obligation to undertake to provide 10% storage capacity with each project,” Kinga Máté, a Hungarian legal expert, told pv magazine.

For the small PVPP category – which includes installations between 300 kW and 1 MW – the final average price was HUF 25.49/ kWh. In the large PVPP group, with projects ranging in size from 1 MW to 20 MW, the final average price was HUF 24.96/ kWh.

“All 12 projects apply solar technology, half of them calculated to use a tracking system. It is interesting to observe that all six large projects are located in Borsod-Abaúj-Zemplén county, the northeastern part of Hungary,” said Ferenc Kis, a Hungarian renewable energy analyst.

HEPURA expects to contract 864 GWh in total. It awarded feed-in premium payments, on top of wholesale electricity returns, for 15-year contracts.

Solar was particularly successful in Hungary’s first three procurement exercises. In the third auction, HEPURA contracted 299 GW and allocated 183 MW of PV capacity. For the small PVPP category – for installations between 300 kW and 1 MW – the final average price was HUF 21.26/ kWh. In the large PVPP group, with projects ranging in size from 1 MW to 20 MW, the final average price was HUF 16.15/ 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, the final prices ranged from HUF 21/kWh to HUF 23.03/kWh. For projects ranging in size from 1 MW to 49.9 MW, the 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, 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.

This post appeared first on PV Magazine.

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