Power Purchase Agreement Hungary

It should be noted beforehand that electricity markets are traditionally divided into four markets: (i) production/import and wholesale trade, (ii) transmission/distribution, iii) retail trade and (iv) clearing services. The markets relevant to the evaluation of AAEs are the first and fourth category, as MVM purchases electricity from domestic generators, imports electricity and sells it to regional distributors and commercial distributors (retail suppliers). MVM also provides the transportation network manager with dedicated capabilities to compensate the system. Fourth, the Budapest power plant argues that its AAEs have all been the subject of an open and transparent tender, either as an essential part of the privatization package or separately. The Csepel plant argues that, although the facility was not selected on the basis of a public tender, it nevertheless receives compensation limited to cost coverage and a reasonable profit margin. Pricing mechanisms ensure that overcompensation is avoided. In 1997, joint guidelines were adopted by the relevant Ministry and the Hungarian Energy Board regarding the procedure for authorising the construction of power plants and the general rules of the tendering procedure. Each AAE comprises two main types of royalty components: the capacity charge (or capacity provision charge) for reserved capacity (MW) to cover fixed costs – profit (capital cost) and the electricity charge to cover variable costs. The different AAEs provide for different additional fees. According to the AAEs, these additional costs may be bonus/malus charges, which are considered an incentive for electricity producers to operate on the principle of the lowest costs, and additional charges for maintaining production reserves, reprogramming maintenance at the request of MvM, increasing the peak load and reducing the charge below the charge set during the minimum demand period, etc. Periodic changes (annual, quarterly, monthly) in capacity costs depend on a number of factors: activation of retrofit projects completed, different categories of interest rates, exchange rates, inflation indices, etc. The capacity charge and additional charges also cover system services (which are covered by the AAE). Electricity charges mainly concern the cost of fuel and the specific use of fuel heat (fajlagos tezelhéhé felhasznél`sa).

They are calculated on the basis of the principle of the impact of variable costs. In order to preserve the quality of such a complex program, HAEA has defined its basic principles and requirements for the implementation of technical assistance activities.