Connection to the grid

Updated: 07.01.2019

Author: John Szabo

Plant operators are contractually entitled to connection to the grid. The grid operator is obligated to enter into grid connection agreements (§§ 35 (1), 58 (1) and (2) Act No. LXXXVI 2007). These agreements shall be in line with the grid operator's terms and condi-tions and the conditions and procedures stipulated by law (§ 58 (1) Act No. LXXXVI 2007). According to § 35 (3) of Act No. LXXVI 2007, the grid operator is obliged to give privileged access to the grid for electricity generated from low carbon technologies, inter alia re-newable energy sources.

Entitled party: All potential grid users are entitled to connection to the grid (§ 56 (1) Act No. LXXXVI 2007). A grid user is defined as an entity which, for the purpose of exporting or using electricity, is directly or indirectly connected to the public grid (§ 3 item 50 Act No. LXXXVI of 2007). This definition also covers the operators of renewable energy plants.

Obligated party: The persons obligated are the grid operators and the operators of private electricity networks (§§ 3 (22), 15, 16 (n), 35 (1), 58 (1) and (2) Act No. LXXXVI of 2007).

Procedure

Process flow

A claim for connection to the grid arises on the date on which a grid user meets the con-ditions set out in the grid connection agreement.

  • The grid connection process for plants for private use (up to 50 kW) involves the following steps:
    • Application for connection by the plant operator: A given plant opera-tor shall submit his application for connection to the grid operator. Hav-ing received the application, the grid operator is obliged to connect the plant to the grid (§ 4 Government Decree No. 273/2007 (X.19)).
    • Plant operator's obligation to provide information: The plant operator is obliged to inform the grid operator in writing or electronically of the technical data of his plant (§ 5 (3) Government Decree No. 273/2007). Moreover, when applying for an operating licence, the plant operator is obliged to inform the competent authority whether or not the electrici-ty produced is to be exported to the grid. If the electricity is to be ex-ported, the grid operator shall take this into account when determining the conditions for connection to the grid (§ 5 (4) Government Decree No. 273/2007 (X.19)).
  • The grid connection process for micro-plants not subject to licensing (50 kW – 500 kW) and small-scale plants (500 kW – 50 MW) includes the following steps:
    • Application for connection: A plant operator shall submit to the grid operator an application for connection in the required format (Annex 2, 2.1. and 2.3. Government Decree No. 273/2007(X.19)). The docu-ments and data to be included in an application for connection are de-fined by law (Annex 2, 2.4.  Government Decree No. 273/2007 (X.19)).
    • Provision of information and draft agreement on connection to and use of the grid: Having received an application for connection, the grid operator is obliged to inform the plant operator on all relevant re-quirements for grid connection and use. In addition, the grid operator is obliged to make well-founded suggestions on how the plant could be connected to and use the grid. These suggestions shall include a grid connection point and a cost estimate for the connection works. The draft agreement shall be free of charge. If the plant operator has not provided all the documents and information required for connection to or use of the grid, the grid operator shall inform the plant operator that the application is incomplete (Annex 2, 2.5. and 2.6. Government De-cree No. 273/2007 (X.19)). The content requirements for draft agree-ments are defined by law (Annex 2, 2.8. Government Decree No. 273/2007 (X.19)).
    • Connection agreement: If the plant operator accepts the draft agree-ment on connection, he shall sign it and send it back to the grid opera-tor within the period set by the grid operator. The agreement will take effect on the date on which the grid operator receives the signed agreement (Annex 2, 4.1. Government Decree No. 273/2007(X.19)). If the plant operator does not accept the draft agreement, he shall sug-gest amendments, sign the amended agreement and send it back to the grid operator. The agreement shall take effect only if the grid operator accepts the amendments, signs the amended agreement and sends it back to the plant operator. The agreement will take effect on the date agreed on by the involved parties (Annex 2, 4.2. Government Decree No. 273/2007 (X.19)). The standard terms of a connection agreement are set out by law. However, the format and further provisions of such an agreement are stipulated in the grid operator's terms and conditions (Annex 2, 6.1. Government Decree No. 273/2007 (X.19)).
    • Grid use agreement: The plant operators are entitled to request grid use agreements. Having received such a request, the grid operator is obliged to sign a grid use agreement and send it to the plant operator. The rules and requirements for grid use agreements are the same as for connection agreements (Annex 2, 7.1. Government Decree No. 273/2007 (X.19)). The standard terms of a grid use agreement are set out by law (Annex 2, 8.1. Government Decree No. 273/2007 (X.19)).
    • Connection to the grid: After all the above-mentioned steps have been taken, the grid operator is obliged to enable the plant’s actual connec-tion and access to the grid within the time period determined in the grid use agreement (Annex 2, 9.1 Government Decree No. 273/2007 (X.19)). 
    • Export of electricity to the grid: The amount of energy for which the feed-in-tariff can be claimed and the amount that may be exported to the grid are set out in the below-mentioned government decree. The procedure and the conditions for the purchase of electricity are set by the Hungarian Energy and Public Utility Regulatory Authority (§ 11 (3) Act No. LXXXVI of 2007).
  • Connection of wind power plants:
    • Prior to the connection process, a wind power plant must be author-ised in a tendering procedure which is developed by the Hungarian Government. The Government decision defines the number of wind turbines, their capacity, performance requirements and its limitation (§ 7/B (1) Act No. LXXXVI of 2007). 

Competent authority

Magyar Energetikai és Közműszabályozási Hivatal (MEKH) (Hungarian Energy and Public Utility Regulatory Au-thority)

Deadlines

Exact timelines and deadlines regarding access to the grid are laid down in the statutory provisions on electricity supply (§ 35 (2) Act No. LXXXVI of 2007). The following timelines apply to the connection of micro-plants not subject to authorisation (50 kW - 500 kW) and small-scale plants (500 kW – 50 MW):

  • In cases where an on-site assessment is not necessary, the grid operator is obliged to produce a cost estimate and a draft agreement on connection within 8 days after receipt of an application (Annex 2, 2.5. Government Decree No. 273/2007 (X.19)).
  • If the plant operator has not submitted all the required documents and data re-lated to his application, the grid operator shall inform the plant operator within 15 days after receipt of the application that the application is incomplete and shall indicate the missing or deficient sections (Annex 2, 2.6.  Government De-cree No. 273/2007 (X.19)).
  • If the application as well as the supplements do not specify whether or not grid developing measures will be necessary prior to plant connection, the grid opera-tor shall conduct an on-site assessment. If grid development measures are not required, the grid operator shall provide the plant operator with a cost estimate and a draft agreement within 15 days. If grid development measures are neces-sary, the grid operator shall submit a draft agreement including a cost estimate to the plant operator within 30 days (Annex 2, 2.7. Government Decree No. 273/2007 (X.19)).
  • If a plant operator requests a grid use agreement to be concluded, the grid op-erator shall send a draft agreement to the plant operator within 15 days (Annex 2, 7.1. Government Decree No. 273/2007 (X.19))
  • If a plant operator proposes amendments to the grid operator's draft connection or draft use agreement and the grid operator accepts these amendments, the grid operator is obliged to sign the agreement and send it back to the plant op-erator within 15 days after receipt (Annex 2, 4.2. & 7.1. Government Decree No. 273/2007(X.19)). 

Obligation to inform

The grid operator is obliged to make sure that the connection procedure is transparent (§§ 15, 30 Act No. LXXXVI of 2007). During the connection process, the grid operator is obliged to inform the plant operator in advance of the connection requirements and of the costs of the connection works within 8 days (Annex 2, 2.5. Government Decree No. 273/2007 (X.19)). The information to be provided and the content of the draft agree-ments on connection to and use of the grid are defined by law (Annex 2, 2.8. Govern-ment Decree No. 273/2007 (X.19)).

Priority to renewable energy

  • Priority to renewable energy
  • Non-discrimination

Renewable energy plants shall be given priority connection (§ 35 (3) Act No. LXXXVI of 2007). Furthermore, the Hungarian Energy and Public Utility Regulatory Authority shall give priority to renewable energy plants when authorising new plants (§ 78 Act No. LXXXVI 2007). However, in the event of threatened supply security and if there is a chance that the goals of Hungary’s energy policy will not be met, the Hungarian Government (the Minis-ter responsible for energy issues) can enact a Decree which ensures the realisation of those targets. Thereby, the Decree might restrict or enable the use of one certain ener-gy source and decide on the capacity and time frame for the use/restriction of one source (§ 79 Act No. LXXXVI 2007).

Capacity limits (quantitative criteria)

The grid operators may refuse to connect a plant to the distribution or transmission grid for technical reasons. However, when refus-ing to connect a plant, they are obliged to specify the conditions under which connection will be granted. If technically possible, they shall provide for another connection point (§ 27 (2), (3) Act No. LXXXVI 2007). The grid operators are not allowed to refuse to connect a plant to the grid because of expected capacity shortage. Furthermore, they are not allowed to refuse connection in cases where they will incur costs because the connection of a plant to a nearby connection point requires the grid to be expanded and reinforced (§ 27 3a) Act No. LXXXVI 2007).

Distribution of costs

Consumers

The additional costs incurred to the grid operator for expansion works required to con-nect a renewable energy plant are included in the grid use charges, which are set by the Hungarian Energy and Public Utility Regulatory Authority (§ 7 (5) Act No. LXXXVI of 2007). The grid operators can pass on these costs to the end consumers.

Grid operator

The grid operators shall bear the cost of connection of a new renewable energy plant to the grid (§ 7 (5) Act No. LXXXVI of 2007).

Plant operator

Decree No. 10/2016 (XI. 14.) establishes the conditions under which the connection costs are set and defines the proportion of the costs to be borne by the plant operator. The composition of the connection charges varies according to the project’s cost esti-mate, which in-turn is based on technical requirements, except for household-sized installations (§ 27 (1) Decree No. 10/2016 (XI. 14.)). Furthermore, investment costs might be taken into consideration as well if the respective measurements date no long-er back than five years. According to the grid operator, if the nominal amperage of 32A is not surpassed, no basic connection charge is levied from installations (§31 (1) c) De-cree No. 10/2016 (XI. 14.)). Furthermore, household-sized installations are exempt from connection charges if the injected electricity does not exceed the consumed electricity (balanced net-metering) (§29 (2) Decree No. 10/2016 (XI. 14.)). 

Connection charges for plants that generate electricity from a primary source of energy and for which there is evidence that they produce on average over a period of five years at least

  • 70% of their electricity from renewable sources, the grid connection charges will be reduced by 30% or 50% (§ 28 (6) lit. a-b) Decree No. 10/2016 (IX.14.)).
  • 90% of their electricity from renewable sources, the grid connection charges will be reduced by 50% (§ 28 (6) lit. c) Decree No. 10/2016 (IX.14.)).

If the Hungarian Energy and Public Utility Regulatory Authority finds that the plant operator failed to meet the above shares of electricity from renewable energy sources of 70 % or 90% in five years, the reduction of grid connection charges as determined by the Hungarian Energy and Public Utility Regulatory Authority (§ 28 (7) lit. b) Decree No. 10/2016 (IX.14.) Furthermore, the plant operator might pay back at least 20% of the reduction of grid connection tariffs per year (§ 28 (7) lit. c) Decree No. 10/2016 (IX.14.)

Hungary

Further information

  • Magyar Energetikai és Közműszabályozási Hivatal (MEKH) - Hungarian Energy and Public Utility Regulatory Authority (HEA)
  • +36 459 7777
  • MEKH website
  • mekh(at)mekh.hu