The Hungarian Wind Energy Association (HWEA) expects installed capacity to rise another 130MW this year to reach the 330MW mark, the level at which licences were capped in a 2006 tender process. At the same time, a fresh round of tendering in 2010 is set to open up a possible 410MW in new wind capacity in coming years. That means 740MW could be operational in the not-too-distant future.
Local firm Euro Green Energy and Spain's Iberdrola Renovables were behind Hungary's 2009 capacity rise. Euro Green Energy used 2MW V90 turbines from Danish firm Vestas on its 24MW Bony installation. Iberdrola used 2MW Gamesa G90 turbines on its 50MW Kisigmand wind farm.
Iberdrola is almost certain to be the main force behind new capacity gains in Hungary this year, with plans to add 108MW. The firm announced in October that it has already begun construction of two additional wind farms in the same area as its Kisigmand plant: the 36MW Scott project and the 38MW Csoma I facility. Both will be composed of 2MW Gamesa turbines. Gamesa and Vestas have a complete stronghold on the Hungarian turbine market, commanding nearly 80% between them (see graphic).
Market attention is largely focused on what could be installed past 2010 as the government focuses on its goal of achieving 920MW of installed wind capacity by 2020. To move closer to that goal, last August the government announced that in 2010 it would invite developers to tender for concessions totalling up to 410MW. While interest is expected to be keen - the previous offer of 330MW attracted 1.6GW of bids - the spectre of possible production cuts and financial conditions demanded in bids may dampen some of the enthusiasm.
"The 410MW was calculated on the basis of a number of studies, including that of the Hungarian transmission system operator (TSO), which provided this figure but also indicated there could be significant operational issues with 410MW," says Miklos Brazai, power and utilities manager for consultancy KPMG in Hungary. Furthermore, notes HWEA secretary Andrea Kircsi, TSO Mavir wants to be able to regulate wind farms remotely. "The criteria for when Mavir will switch off wind parks are not clear," Kircsi says.
The government is also asking bidders to compete on the price they expect to be paid for wind power when they submit tenders. This is different from the current support system in which all wind energy producers receive the same guaranteed purchase price, adjusted annually for inflation. The 2010 rate was HUF 29.28/kWh (EUR0.11/kWh). The time period for which this purchase price is received depends on a producer's agreement with the Hungarian Energy Office.
The first stage of the new tendering process, considered to be mainly an administrative check, is set to end on March 1. "The second stage involves bidding on the number of years of the feed-in tariff and the price," says Brazai. "Whoever requires a lower feed-in tariff is at an advantage, while a shorter time period is also better." Observers expect those assigned licences to be named some time this summer.
The concessions come in two portions. Bidders may submit for some 280MW of potential wind energy capacity that will be licensed off in the operating territory of electricity distributors Edasz and Emasz, in northern Hungary. The remaining 130MW of licences will be issued for projects in the south, to be sited in the operating territory of Demasz, Elmu and Titasz. "Some 95% of the existing wind farms are in the north-west near Austria and Slovakia, so we would expect big development in this part of the country," says Brazai. Less clear is potential interest in the 130MW that is opening up in the south.