Energy Client Alert - Changes in the regulation on FIT projects

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Full balancing responsibility as of 1 April with a temporary compensation -

Several amendments were made to laws impacting on renewable energy projects benefitting from support schemes at the end of last year. One of the most significant changes affects all feed-in tariff system (FIT) generators, irrespective of whether they are already in commercial operation or waiting to be commissioned. According to the new regulation, FIT producers will bear the cost of imbalances they cause in the FIT balancing circle. The new regulation is driven by and based on Article 5 of Regulation (EU) 2019/943 of the European Parliament and of the Council on the internal market for electricity that introduced the concept of balance responsibility as of 1 January 2020. In order to mitigate the financial burden of the above change in law, FIT producers will be entitled to temporary and gradually decreasing compensation in the next six years or so.

Amendments to the FIT regulations were published on 30 December 2019. In order to transpose the newly introduced concept of the balance responsibility into Hungarian law, the legislator had to revise the existing balancing surcharge and bonus system. The following is a brief summary of the most significant changes that will be uniformly applied to feed-in tariff projects either under the so called old KÁT or the new METÁR system.

Please see full Alert below for more information.

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DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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