EC okays Hungary's EUR-1.1bn scheme for energy storage

The European Commission (EC) has granted its approval, under EU State aid rules, to an EUR-1.1-billion (USD 1.2bn) scheme by the government of Hungary to support large-scale energy storage projects.

The programme will facilitate the deployment of at least 800 MW/1,600 MW of energy storage systems, the EC said on Wednesday. The plan will improve the flexibility of Hungary’s electricity system and allow the smooth integration of renewable energy capacity, in line with the country’s efforts to transition to a net-zero economy.

Funding under the scheme will be available to companies operating in the energy sector and will be distributed through a competitive tender. It will come as an investment grant to be allocated during the construction phase of the projects and two-way contracts for difference (CfD). Funding in the second category will be paid annually during the first 10 years of the assets’ operation.

The installation of storage facilities in neighbouring member states will also be eligible for support. Contracts to the winning developers will be awarded by the end of 2024.

The incentive scheme was greenlit under the State aid Temporary Crisis and Transition Framework that the EC adopted in March to back the green transition and lower the bloc’s reliance on Russian fuel following the war in Ukraine. Part of the funds will be sourced from the country’s Recovery and Resilience Facility, some will come from the EU’s Modernisation Fund, while the 10-year annual support will be financed through a levy.

(EUR 1.0 = USD 1.093)

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