Hungary opens part of energy market

The Hungarian government adopted a law on the opening of a part of Hungary’s electricity market to consumers of more than 6.4 gigawatt-hours of electricity starting from 1 January 2003. This means that around 200 of Hungary’s biggest electricity consumers will be able to choose suppliers and import up to 50 per cent of their power needs. Hungary generates 30 percent more electricity than it consumes.

The Hungarian liberalisation will coincide with the 33 percent market opening in the EU.

The government will continue to control electricity prices on the retail market for households. EU directives allow this until 2010.

Part of the new law, on capacity building, will come into force on 1 February 2002. New entrants on the Hungarian energy market will be allowed to build new capacities when they obtain a permit from the Hungrian energy market authority. They will not be obliged to enter into a long-term supply agreement with the state-controlled wholesaler MVM.

Hungary has already privatised most of its energy sector. Generators are owned by foreign companies, such as RWE of Germany, Electricité de France and AES of the US. All six electricity distributors in Hungary are foreign owned.

 

The proposed law is to be approved by the Hungarian parliament by the end of this year. Hungary will then proceed with complete energy market liberalisation by 2010. Hungary will thus comply with the EU directives on energy markets liberalisation.

 

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