Hungary notified plans to support electricity from renewable energy sources in April 2017. The Commission found that the scheme will help Hungary increase the share of renewable energy sources in its energy mix. It promotes the integration of such electricity into the market, in line with the Commission's 2014 Guidelines on State Aid for Environmental Protection and Energy, while limiting distortions of competition due to the state support.
Margrethe Vestager, Commissioner responsible for competition policy, commented: "We want to make progress towards clean energy for the sake of our environment but also for European economic growth. The Hungarian support scheme will increase the share of green energy in Hungary's energy mix, whilst preserving competition in the electricity market. We approved the scheme today."
The scheme, with a yearly budget of up to HUF 45 billion (approximately €146 million), foresees state support either through a feed-in tariff or through a price premium, in line with the Guidelines.
- Support with a feed-in tariff will be limited to small installations (below 500 kilowatt) and demonstration projects.
- Installations with a capacity above 500 kilowatt will receive a premium on top of the market price of electricity, exposing them to market signals. For installations with a capacity above 1 megawatt and wind installations the premium will be determined and beneficiaries selected in a competitive bidding process.
Hungary has demonstrated that the aid is limited to what is necessary for the projects to move forward, in line with the Guidelines. This will minimise potential distortions of competition created by the public funding and help keep electricity costs at bay for consumers.
The Hungarian scheme will be financed through the renewables support levy currently in place in Hungary. In order to avoid any discrimination against foreign renewable energy producers resulting from the financing mechanism, as of 2017 Hungary will partially open up the renewables support scheme to foreign producers.
The Commission's 2014 Guidelines on State Aid for Environmental Protection and Energy allow Member States to support the production of electricity from renewable energy sources, subject to certain conditions. These rules are aimed at meeting the EU's ambitious energy and climate targets at the least possible cost for taxpayers and without undue distortions of competition in the Single Market.
For more information on the 2014 Guidelines on State Aid for Environmental Protection and Energy, see also the Commission's Policy brief on "Improving State Aid for Energy and the Environment.
More information on the decision will be available, once potential confidentiality issues have been resolved, in the state aid register on the Commission's competition website under the case number SA.44076. The State Aid Weekly e-News lists new publications of state aid decisions on the internet and in the EU Official Journal.