The impact of the regulator on the electric power generation mix, and the possibility of developing a capacity mechanism in the hungarian electricity market

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Dr. Vokony István
Department of Electric Power Engineering

The main goal from the beginning of electricity markets is always the perfect competition markets. To facilitate this competition, the European target model of electricity markets are the energy only markets. The main target of the three energy package is to reap the benefits of free markets with competitor prices and energy efficiency and increased transparency in retail markets to benefit consumers. However, the focus has shifted from increasing market efficiency to increase security of supply and to reduce carbon emissions. To fulfil the European Union's climate policy objectives, it is necessary to implement low-carbon or carbon free technologies. The periodically available renewable energy sources are appeared on the electricity market meanwhile, in Europe the market-coupling is also underway, which is a great challenge both technically and economically.

According to the European Union’s 20-20-20 climate policy objectives, the Hungarian Government undertake to achive 14.65% renewable share in the gross energy consumption. Therefore, the Hungarian Regulator are going to implement a new premium type renewable energy support scheme.

Within 20 years, Hungary is facing a flexible capacity shortage. To prevent this scenario, I take an offer to implement a capacity mechanism.


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