Client Alert Client Alert

Changes to the rules on guarantees of origin in Hungary

From this year onwards, Hungarian market participants will have to take into account several practical changes related to guarantees of origin (GoO) and the so-called energy mix disclosure. In addition to implementing EU law, the legislative changes are aimed at bringing domestic regulation on GoOs and energy mix disclosure in line with European best practices, enabling the Hungarian Energy and Public Utility Regulatory Authority (HEPURA) to join the European Energy Certificate System (EECS) and thus allow domestic GoOs to be marketed in Europe.

Electricity generated by power plants is distributed to consumers through public networks. The networks transmit electricity generated by both conventional and renewable technologies. For consumers who wish to use electricity from specifically renewable energy sources or from high-efficiency cogeneration, generators provide a GoO to certify the renewable origin of the electricity supplied.

The EU Clean Energy Package contains provisions on GoOs and energy mix disclosure in Article 19 of EU Directive No. 2018/2001 and Annex 1 of EU Directive No. 2019/944. Within the framework of the domestic implementation of the relevant EU law provisions, based on the proposals submitted by the HEPURA to the legislator, the following national act and decrees were amended: a) from 1 July 2021, Article 6/A of Act No. LXXXVI of 2007 on electricity (Electricity Act); b) from 1 July 2022, Government Decree No. 309/2013 (VIII. 16.) on the certification of the origin of electricity from renewable energy sources and high-efficiency cogeneration; and c) KHEM Decree No. 6/2008 of the Ministry of Health on certain data services related to the management, operation and use of the electricity system.

After the July 2021 amendment to the Electricity Act stipulated that the GoOs of power plants receiving feed-in tariffs (KÁT) are not given to the generators, but must be sold by the Hungarian transmission system operator (MAVIR) at auction from June 2022, a number of detailed rules have been introduced in the lower-level legislation from this year:

  • The application for registration of the GoO can now be submitted to the HEPURA not only by the producer but also by the account holder authorised by him/her. In this context, registration of the power plant unit in the electronic management system by the authorised representative is also possible. If the account holder is not the owner of the power plant, an authorisation from the owner of the power plant is required for the registration of the power plant and for the submission of the registration application.
  • When the GoOs are registered, the HEPURA issues an official certificate.
  • Contrary to the previous practice, after 1 January 2022, it will no longer be possible to register a GoO only for qualified power plants. No certification will be required if the power plant has a licence issued by the HEPURA or benefits from a feed-in tariff (KÁT) or premium subsidy scheme (METÁR).
  • GoOs for a given calendar year can be cancelled from the management system from 1 April of that year to 31 March of the following year, i.e., between 1 January and 31 March, they can only be cancelled for consumption in the previous year. A maximum of 12 months may elapse between the end of the production period for the cancelled GoO and the end of the consumption period.
  • The recognition of foreign GoOs applied for after 1 January 2022 will be different from previous practice. From now on, the HEPURA will no longer enter foreign GoOs into the domestic management system and will not have to cancel them for the user, but on the basis of the document issued by the foreign authority directly to the Hungarian user on the cancellation of the guarantee, the HEPURA will approve the cancellation for the designated user and will issue a formal decision. The application for recognition of a foreign GoO for consumption in a given calendar year may be submitted from 1 April to 31 December of that year. Cancellation of domestic GoOs will continue to be done in the management system.