Energy storage regulation in Hungary

Currently no electricity storage projects are operational in Hungary. Although, the concept of building pumped hydro storage has been raised time to time for decades. In the 1980s various possible sites were investigated, primarily next to the mountainous regions of the River Danube, but no such project has ever materialised.

Later, around 2005 (simultaneously with the commencement of larger scale renewable generation developments) the then electricity wholesaler (the state owned MVM) again raised the idea of an about 500-600 MW capacity pumped hydro storage project. Again, it did not materialise partly because of environmental concerns (the possible location was a Natura 2000 area).No battery storage or other advanced technology electricity storage projects are installed.

Recently, Paks II project, the planned extension of the existing Paks Nuclear Power Plant, triggered discussions over the development of a pumped hydro project.

Some experts believe that pumped hydro storage might be necessary in connection with the Paks II project so the inflexible generation of the future nuclear power plant can be balanced by a pumped storage facility.

Despite it, the National Energy Strategy 2030 (the “Strategy”) does not recommend building pumped storage power stations in Hungary. According to the Strategy energy storage may be solved more efficiently with regional cooperation (i.e. through the export/import of the excess volumes of electricity).

There is no specific electricity storage regulatory regime in Hungary.

Virtually all potential sites of the contemplated pumped hydro projects are located next to the River Danube and other environmentally sensitive locations, which are Natura 2000 territories.

With respect to one such possible site, the competent environmental authority refused to issue the necessary environmental license, and this refusal was later confirmed by a court. So this site was excluded from any further pumped hydro development procedure.

In addition, the development of larger scale energy storage facilities (i.e. pumped hydro projects) is not an immediate necessity from technological and system balancing points of view. Therefore, the possible developers are reluctant to finance the excessive costs of such projects.

The Hungarian Energy and Public Utilities Authority (“HEPURA”) is the competent regulatory authority responsible for the licensing of all electricity generation facilities. In case of any future development e.g. pumped hydro storage, HEPURA would act as the licensing body.

So far it has been the state-owned utility company, MVM, that has occasionally raised the idea of pumped hydro projects. If such a project would ever materialise, then most probably MVM or an MVM group company would be the developer.