Clearing the air: Hungary adopts essential provisions to fulfil Recovery and Resilience Plan commitments

Hungary has cleared regulatory hurdles standing between investors and large-scale wind energy development with the 30 July promulgation of legislation that amends the Electricity Act and related statutes, which are designed to fulfil Hungary's energy commitments to the revised Recovery and Resilience Plan (RRP). 

These reforms streamline permitting procedures for power plant investments, promote wind farm development, enhance the flexibility and digitalisation of the electricity system and advance energy infrastructure upgrades.

Key reforms at a glance

A uniform 199-metre hub height cap for wind turbines

The maximum hub height for wind turbines has been set at 199 m., regardless of whether the installation takes place within a designated facilitated zone or outside of it. This uniform standard provides regulatory certainty and removes a significant physical constraint that previously limited the deployment of modern, higher-capacity turbines across Hungary.

Clarification of KÁT fund payment exemptions

The new act clarified the conditions for exempting electricity volumes from the mandatory feed-in tariff (KÁT) fund contribution. Specifically, it defines the exemption criteria for:

• electricity generated and shared by an active user or an energy community from a renewable energy source;
• electricity sold to energy storage facilities;
• electricity generated from renewable energy sources, and sold directly by the producer to the end consumer.

In addition, the recently adopted changes specified who is required to submit the declaration confirming the completion of exemption conditions and the data-reporting schedule applicable to such declarations.

Broader flexible criteria for designating facilitated renewable energy zones

The criteria for designating facilitated zones (i.e. areas where renewable energy projects benefit from simplified regulatory treatment) changed in two important ways. First, the range of considerations used in the designation process will be expanded to include environmental, social, economic and national defence dimensions. Second, the threshold for designation will be lowered. Rather than selecting only the "most favourable" zones, it will be sufficient to identify "favourable" ones, widening the geographic scope available for development.

Faster environmental permitting: a defined 85-day deadline

The new act introduced a procedural deadline of 85 days for the environmental impact assessment conducted within the integrated power plant construction and environmental permitting procedure. This fixed timeline is expected to reduce uncertainty for developers navigating the permitting process.

Reform of the aggregation framework

The right to conclude an aggregation agreement will be linked to metering points equipped with remotely readable consumption meters. The previous general framework had been replaced by a detailed regime that more precisely defines the rights and obligations of market participants. The most notable change is a shift in the financial responsibility model: whereas under the current rules the aggregator bears the cost of imbalance, the new system will transfer the compensation burden to the consumer, subject to strict conditions and caps.

New pricing methodology framework

The system for price regulation has changed. In the future, methodological guidelines on price setting may be issued by decree of the President of the Hungarian Energy and Public Utility Regulatory Authority (HEPURA). The first such decree must be published by 31 August 2026 at the latest, irrespective of the applicable price regulation cycle.

Expanded mandate

HEPURA will assume new monitoring responsibilities. It will be required to track the market penetration of aggregation activities in the electricity market and propose measures to eliminate regulatory barriers. HEPURA will also monitor significant developments in flexible electricity pricing contracts.

What this means for investors

The legislative changes represent a decisive step towards creating a more predictable and developer-friendly regulatory environment for wind energy in Hungary. The combination of a clear hub height standard, streamlined permitting timelines, broader facilitated zones and reformed market rules signals that Hungary is serious about translating its RRP energy commitments into opportunities for investors.

For more information on Hungary's evolving energy regulatory landscape, contact your CMS client partner or the local CMS experts who contributed to this article.

Hungary’s legal, tax and regulatory landscape is evolving rapidly following the change of government. Stay informed with timely updates and expert analysis from our dedicated hub, Hungary Forward - Hungary Forward | CMS Hungary.