Green light to Hungarian wind energy! – An update 8 months in

We reported in January that, after a decade-long wait, regulatory barriers to the establishment and expansion of wind farms in Hungary were lifted thanks to a package of legislation that entered into force on 1 January 2024. The legislation both reduced the protection zone for wind farms from 12 km to 700 meters and repealed the mandatory tendering procedure for wind farm capacity. Our question was back than whether these changes be sufficient to reignite wind farm development in Hungary? How is Hungary faring 8 months after giving the green light to wind?

Quick recap

Wind power developments virtually stopped since 2011 mainly because of

• the establishment of wind farms above household size were possible only by means of a tendering procedure, but there were no such tenders issued,
  
• the protection zone being set at a level that prevented setting up wind farms practically in the whole of Hungary since 2016,
  
• the need to remove from cultivation and reclassify agricultural land if used for wind farms, and
  
• the need to obtain written consent from all landowners within a 1 km radius of the envisaged wind farm site.

As of the beginning of 2024, the long-awaited revised regulations 

• reduced the wind farm protection zone from the previous 12 km to a mere 700 meters from the borders of build-in areas and effectively to zero in areas located in zones designated as industrial economic areas and other industrial economic areas, where investments of high national economic importance are being or have been carried out;
  
• streamlined the permitting procedure for wind farms in “facilitated areas” designated by the local and county municipalities based upon the recommendation of the Minister of Energy;
  
• amended the zoning requirements and procedures applicable to wind turbines to facilitate wind power developments;
• simplified the building permitting procedure so that no landowner consents are needed as part of the technical documentation.

Remaining challenges

Environment protection issues

Despite the new regulatory framework that has finally given the green light to wind investments, several critical environment protection measures remain unaddressed. Although the new regulatory framework established a 700-meter protection zone around municipalities, it does not provide a similar protection zone in the vicinity of national ecological network zones, high-quality agricultural lands, natural conservation areas, and world heritage sites or sites of world heritage value. However, it permits developments near these restricted areas and in locations not covered by the national ecological network or conservation areas. Some views are also critical about the exemption of the 700-meter protection zone in the case of industrial areas and industrial areas of national importance. Further, protection zones may be justified to be preserved next to ecological networks, forests and natural waters.

Grid connection difficulties

While the revised regulatory environment has been eagerly awaited and removes several barriers under which establishing wind power plants and wind farms are now possible, there is still a long way to go before any wind farm development can commence due to the scarcity of grid connection capacity.

In both the first and – much delayed – second publication procedures, the network operators did not publish any weather-dependent power plant connection capacities. This meant that such connection rights could only be applied for in individual procedures. However, due to the large number of solar investments, even the applications submitted in individual procedures are queuing up. Thus these applications would only be approved with a connection date of 2029 or later.

In response to the foregoing, Government Decree No. 54/2024 (III. 6.) (“Government Decree No. 54/2024 (III. 6.)”) was published in the Hungarian National Gazette on 6 March 2024, introducing fundamental changes to the grid connection applications submitted by developers in the second publication procedure started on 30 November 2023, including the establishment of an order of preference to prioritize eligible applications and the imposition of tight restrictions on grid access until 2030.

Regarding wind investments, this meant that wind power plants and wind farms that could be connected to the transmission grid at 400 kV were allowed to connect, provided that they are associated with various grid connection applications, collectively have a nominal capacity of at least 670 MW, and their connection to the public grid is realized through a single common node without requiring public transformation (meaning they need to independently convert the electricity generated to 400 kV.)

In practical terms, this means that in the second publication procedure, new wind power capacities and remaining applications from previous publication procedures that could be integrated into the grid by 2030 at the latest were granted the right to connect until 6 May 2024. Capacity requests for grid connection beyond 2030 have been and will continue to be rejected by the competent distribution system operators.

In conclusion, the limited grid connection capacity continues to pose a major obstacle to developing new weather-dependent power plants in Hungary, including wind energy projects. Although the recent Government Decree No. 54/2024 (III. 6.) provided a lifeline for certain wind farms that met specific criteria to connect to the grid before 2030, it simultaneously imposed strict restrictions on all weather-dependent power plant connections beyond 2030. Consequently, unless the Hungarian transmission system undergoes significant improvements and the post-2030 connection restrictions are lifted, the prospects for new wind farm developments are severely limited. For now, only those projects that secured grid connection rights under the Government Decree No. 54/2024 (III. 6.) can move forward, leaving other potential developments on hold.

Healthier energy mix

Wind capacities in Hungary froze at 330 MW in 2011 while new solar capacities soared and reached 5 600 MW in 2023 creating a great chasm between these two renewable technologies, which could balance one another to a certain extent causing less strain to the grid. In order to achieve a healthier mix, available grid connection capacities should be awarded to wind turbines, even at the expense of solar, with the aim of ideally increasing wind capacity to at least 4 GW by 2030.

Conclusion

Hungary remains the last member state in Europe to embrace wind energy, with a wind-power share ranging between just over 1.3% to 1.5%. The new legislative package that entered into force in the beginning of the year marks a significant step to remove longstanding regulatory barriers that hindered the establishment of wind power plants in Hungary for over a decade.
However, mainly due to the scarcity of the grid connection capacity and the restriction on grid connections beyond 2030, Hungary still has a long way to go before wind power developments can commence en masse. Therefore, the need for expansion of the grid connection capacity and development of the transmission and distribution networks has now come to the fore even more. It seems to be a positive sign that the revised National Energy and Climate Plan foresees a significant expansion in the weather-dependent renewable energy capacities, with solar power remaining the primary source with almost 12,000 MW of planned increase in the capacity by 2030. However, wind power may also finally catch up, so that the planned expansion from the current 330 MW to 1,000 MW may be realised, though still a much lower target than analysis propose.

Overall, after a prolonged wait, wind as a renewable energy source is getting the green light in Hungary with the recent changes in the regulatory environment. However, Hungary still has some remaining hurdles to overcome to arrive at a balanced renewables mix through the growth of wind power capacity.