tag: green energy

On 30 September 2022 the Council of the European Union discussed and adopted a draft EU extra tax regulation aimed at the energy sector. Under the regulation, member states will receive, as budget revenue, part of the windfall profits generated by the energy sector. For Hungarian operators, the legislation is particularly important in view of the windfall taxes introduced for renewable energy producers in June 2022.

Recently an increasing number of market players operating under the mandatory off-take regime (KÁT) have taken the opportunity to sell their renewable energy in the free market and thus, due to the current favourable market situation, sell their electricity at a much higher price than the subsidised price paid by the state. This flexibility, however, has disappeared overnight.

While market players are finding it increasingly difficult to acquire energy in the quantities needed for their operations, and with skyrocketing energy prices only making matters worse, the government incentive schemes that are available no longer provide a financially viable alternative for power plant developers. The solution may lie in selling electricity on the open market – though key to this will be deciding on a legal framework that’s acceptable to all parties involved, including the lending banks.